Equibles

10-K

BROADWAY FINANCIAL CORP DE (BYFC)

10-K 2021-03-31 For: 2020-12-31
View Original
Added on April 06, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10‑K

(Mark one)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                       to___________

Commission file number 001‑39043

BROADWAY FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware 95‑4547287
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
5055 Wilshire Boulevard, Suite 500<br><br> <br>Los Angeles, California 90036
--- ---
(Address of principal executive offices) (Zip Code)

(323) 634‑1700

(Registrant’s Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Act:

Title of each class: Trading Symbol(s) Name of each exchange on which registered:
Common Stock, par value $0.01 per share<br><br> <br>(including attached preferred stock purchase rights) BYFC The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well‑known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S‑T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S‑K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10‑K or any amendment to this Form 10‑K. ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐
Non‑accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐ No ☒

State the aggregate market value of the voting and non‑voting common equity held by non‑affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $54,555,000.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☐

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: As of March 26, 2021, 19,142,498 shares of the Registrant’s voting common stock and 8,756,396 shares of the Registrant’s non‑voting common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive proxy statement for its 2021 annual meeting of stockholders, which will be filed no later than April 30, 2021, are incorporated by reference in Part III, Items 10 through 14 of this report.

TABLE OF CONTENTS

PART I
Item 1. Business 1
Item 2. Properties 22
Item 3. Legal Proceedings 23
Item 4. Mine Safety Disclosure 23
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 24
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 25
Item 8. Financial Statements and Supplementary Data 35
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 35
Item 9A. Controls and Procedures 35
Item 9B. Other Information 36
PART III
Item 10. Directors, Executive Officers and Corporate Governance 37
Item 11. Executive Compensation 37
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 37
Item 13. Certain Relationships and Related Transactions, and Director Independence 37
Item 14. Principal Accountant Fees and Services 37
PART IV
Item 15. Exhibits and Financial Statement Schedules 38
Signatures 41

i

Table of Contents

Forward‑Looking Statements

Certain statements herein, including without limitation, certain matters discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this Form 10‑K, are forward‑looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended, that reflect our current views with respect to future events and financial performance. Forward‑looking statements typically include the words “anticipate,” “believe,” “estimate,” “expect,” “project,” “plan,” “forecast,” “intend,” and other similar expressions. These forward‑looking statements are subject to risks and uncertainties, including those identified below, which could cause actual future results to differ materially from historical results or from those anticipated or implied by such statements. Readers should not place undue reliance on these forward‑looking statements, which speak only as of their dates or, if no date is provided, then as of the date of this Form 10‑K. We undertake no obligation to update or revise any forward‑looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.

The following factors, among others, could cause future results to differ materially from historical results or from those anticipated by forward‑looking statements included in this Form 10‑K: (1) the level of demand for mortgage loans, which is affected by such external factors as general economic conditions, market interest rate levels, tax laws and the demographics of our lending markets; (2) the direction and magnitude of changes in interest rates and the relationship between market interest rates and the yield on our interest‑earning assets and the cost of our interest‑bearing liabilities; (3) the rate and amount of loan losses incurred and projected to be incurred by us, increases in the amounts of our nonperforming assets, the level of our loss reserves and management’s judgments regarding the collectability of loans; (4) changes in the regulation of lending and deposit operations or other regulatory actions, whether industry-wide or focused on our operations, including increases in capital requirements or directives to increase loan loss allowances or make other changes in our business operations; (5) legislative or regulatory changes, including those that may be implemented by the current Administration in Washington, D.C.; (6) actions undertaken by both current and potential new competitors; (7) the possibility of adverse trends in property values or economic trends in the residential and commercial real estate markets in which we compete; (8) the effect of changes in economic conditions; (9) the effect of geopolitical uncertainties; (10) an inability to obtain and retain sufficient operating cash at our holding company; (11) the pending discontinuation of LIBOR as an interest rate benchmark; (12) the impact of the COVID-19 Pandemic on our future financial condition and operations; (13) combining the Company and CFBanc Corporation after the merger described herein may be more difficult, costly or time consuming than expected and the combined company may fail to realize the anticipated benefits and cost savings from the merger;  and (14) other risks and uncertainties detailed in this Form 10‑K, including those described in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

ii

Table of Contents

PART I

ITEM 1. BUSINESS

General

Broadway Financial Corporation (the “Company”) was incorporated under Delaware law in 1995 for the purpose of acquiring and holding all of the outstanding capital stock of Broadway Federal Savings and Loan Association (“Broadway Federal” or the “Bank”) as part of the Bank’s conversion from a federally chartered mutual savings association to a federally chartered stock savings bank. In connection with the conversion, the Bank’s name was changed to Broadway Federal Bank, f.s.b. The conversion was completed, and the Bank became a wholly‑owned subsidiary of the Company, in January 1996.

The Company is currently regulated by the Board of Governors of the Federal Reserve System (“FRB”). The Bank is currently regulated by the Office of the Comptroller of the Currency (“OCC”) and the Federal Deposit Insurance Corporation (“FDIC”). The Bank’s deposits are insured up to applicable limits by the FDIC. The Bank is also a member of the Federal Home Loan Bank of San Francisco (“FHLB”). See “Regulation” for further descriptions of the regulatory systems to which the Company and the Bank are subject.

On August 25, 2020, the Company entered into a definitive agreement to merge with CFBanc Corporation, a District of Columbia benefit corporation (“City First”).  The Merger Agreement provides that, among other things and subject to the terms and conditions of the Merger Agreement, City First will merge with and into the Company (the “City First Merger”), with the Company continuing as the surviving entity. At the effective time of the City First Merger, (1) each share of City First’s Class A Common Stock, par value $0.50 per share, and Class B Common Stock, par value $0.50 per share, issued and outstanding immediately prior to the Effective Time (other than any shares owned by City First or the Company and any Dissenting Shares (as defined in the Merger Agreement)) will be converted into 13.626 validly issued, fully paid and nonassessable shares, respectively, of the voting common stock of the Company, par value $0.01 per share, which will be renamed Class A Common Stock, and a new class of non-voting common stock of the Company, par value $0.01 per share, which will be named Class B Common Stock, and (2) each share of Fixed Rate Cumulative Redeemable Perpetual Preferred Stock, Series B, par value $0.50 per share, of City First (“City First Preferred Stock”) issued and outstanding immediately prior to the effective time of the City First Merger will be converted into one validly issued, fully paid and non-assessable share of a new series of preferred stock of the Company, which new series will be designated as the Company’s Fixed Rate Cumulative Redeemable Perpetual Preferred Stock, Series A, with such rights, preferences, privileges and voting powers, and limitations and restrictions thereof, which taken as a whole, are not materially less favorable to the holders of City First Preferred Stock than the rights, preferences, privileges and voting powers, and limitations and restrictions thereof of City First Preferred Stock. Immediately following the City First Merger, the Bank will merge with and into City First Bank of D.C., National Association (“CFB”), a wholly owned subsidiary of City First, with CFB continuing as the surviving entity.

On March 17, 2021, the stockholders of the Company and the stockholders of City First voted to approve the merger as described above. The Company previously announced on January 4, 2021 that all regulatory approvals necessary for consummation of the merger had been obtained.  The merger is expected to close on April 1, 2021.

Also, on March 17, 2021, the Company’s stockholders approved the proposed sale of 18,474,000 shares of Broadway common stock in private placements to institutional and accredited investors at a purchase price of $1.78 per share for an aggregate purchase price of $32.9 million. These  private placements of common stock are expected to close a few days after the merger. At the same meeting, the Company’s stockholders also voted to approve an amendment to the Company’s certificate of incorporation to increase the Company’s authorized number of shares of voting common stock to 75,000,000 and to convert the Company to a “public benefit corporation” under Delaware law.  Delaware law provides that a public benefit corporation is a for-profit corporation that is intended to produce a public benefit or benefits specified in its certificate of incorporation and to operate in a responsible and sustainable manner.

Available Information

Our internet website address is www.broadwayfederalbank.com. Our annual reports on Form 10‑K, quarterly reports on Form 10‑Q, current reports on Form 8‑K and all amendments to those reports can be obtained free of charge by sending a written request to Broadway Financial Corporation, 5055 Wilshire Boulevard, Suite 500, Los Angeles, California 90036 Attention: Alice Wong. The above reports are available on our website as soon as reasonably practicable after we file such material with, or furnish such material to, the Securities and Exchange Commission (“SEC”).

1

Table of Contents

Business Overview

We are headquartered in Los Angeles, California and our principal business is the operation of our wholly‑owned subsidiary, Broadway Federal, which has two offices in Los Angeles and one in the nearby city of Inglewood, California. Broadway Federal’s principal business consists of attracting deposits from the general public in the areas surrounding our branch offices and investing those deposits, together with funds generated from operations and borrowings, primarily in mortgage loans secured by residential properties with five or more units (“multi‑family”) and commercial real estate.  Our assets also include mortgage loans secured by residential properties with one‑to‑four units (“single family”) that we originated or purchased in prior years. In addition, we invest in securities issued by federal government agencies, residential mortgage‑backed securities and other investments.

Our revenue is derived primarily from interest income on loans and investments. Our principal costs are interest expenses that we incur on deposits and borrowings, together with general and administrative expenses. Our earnings are significantly affected by general economic and competitive conditions, particularly monetary trends and conditions, including changes in market interest rates and the differences in market interest rates for the interest bearing deposits and borrowings that are our principal funding sources and the interest yielding assets in which we invest, as well as government policies and actions of regulatory authorities.

The ongoing COVID-19 Pandemic (“Pandemic”) has caused significant disruption in the local,  national  and global economies and financial markets. Continuation and further spread of the Pandemic could cause additional quarantines, shutdowns, reduction in business activity and financial transactions, labor shortages, supply chain interruptions and overall economic and financial market instability. The Pandemic could  disrupt our operations through its impact on our employees, depositors, borrowers, and the tenants of our multi-family loan borrowers. The disruptions in the  economy may impair the ability of our borrowers to make their monthly loan payments, which could result in significant increases in delinquencies, defaults, foreclosures, declining collateral values, and losses on our loans.

The Pandemic may also materially disrupt banking and other financial activity generally and in the Southern California area in which the Bank operates. This may result in a decline in customer demand for our products and services, including loans and deposits which could negatively impact our liquidity position and our growth strategy.  Any one or more of these developments could have a material adverse effect on our business, operations, consolidated financial condition, and consolidated results of operations.

In response to the anticipated economic effects of the Pandemic, the FRB has taken a number of actions that have significantly affected the financial markets in the United States, including actions intended to result in substantial decreases in market interest rates. On March 3, 2020, the 10-year Treasury yield fell below 1.00% for the first time, and the Federal Reserve reduced the target federal funds rate by 50 basis points. On March 15, 2020, the Federal Reserve further reduced the target federal funds rate by 100 basis points and announced a $700 billion quantitative easing program in response to the expected economic downturn caused by the Pandemic. On March 22, 2020, the Federal Reserve announced that it would continue its quantitative easing program in amounts necessary to support the smooth functioning of markets for Treasury securities and agency mortgage-backed securities. We expect that these reductions in interest rates, among other actions of the FRB and the Federal government generally, especially if prolonged, could adversely affect our net interest income,  margins and  profitability.

Lending Activities

General

Our loan portfolio is comprised primarily of mortgage loans which are secured by multi‑family residential properties, single family residential properties and commercial real estate, including churches. The remainder of the loan portfolio consists of commercial business loans, construction loans and consumer loans. At December 31, 2020, our net loan portfolio, excluding loans held for sale, totaled $360.1 million, or 75% of total assets.

We emphasize the origination of adjustable‑rate mortgage loans (“ARM Loans”), most of which are hybrid ARM Loans (ARM Loans having an initial fixed rate period, followed by an adjustable rate period), for our portfolio of loans held for investment and held for sale. We originate these loans in order to maintain a high percentage of loans that have provisions for periodic repricing, thereby reducing our exposure to interest rate risk. At December 31, 2020, more than 97.2% of our mortgage loans had adjustable rate features. However, most of our adjustable rate loans behave like fixed rate loans for periods of time because the loans may still be in their initial fixed‑rate period or may be subject to interest rate floors. ARM Loans in their initial fixed‑rate period totaled $293.3 million or 81.0% of our gross loan portfolio at December 31, 2020.

2

Table of Contents

The types of loans that we originate are subject to federal laws and regulations. The interest rates that we charge on loans are affected by the demand for such loans, the supply of money available for lending purposes and the rates offered by competitors. These factors are in turn affected by, among other things, economic conditions, monetary policies of the federal government, including the FRB, and legislative tax policies.

The following table details the composition of our portfolio of loans held for investment by type, dollar amount and percentage of loan portfolio at the dates indicated:

December 31,
2020 2019 2018 2017 2016
Amount Percent<br><br> <br>of total Amount Percent<br><br> <br>of total Amount Percent<br><br> <br>of total Amount Percent<br><br> <br>of total Amount Percent<br><br> <br>of total
(Dollars in thousands)
Single family $ 48,217 13.32 % $ 72,883 18.23 % $ 91,835 25.69 % $ 111,085 32.93 % $ 104,807 27.42 %
Multi‑family 272,387 75.24 % 287,378 71.90 % 231,870 64.86 % 187,455 55.57 % 229,566 60.05 %
Commercial real estate 24,289 6.71 % 14,728 3.68 % 5,802 1.62 % 6,089 1.80 % 8,914 2.33 %
Church 16,658 4.60 % 21,301 5.33 % 25,934 7.25 % 30,848 9.14 % 37,826 9.90 %
Construction 429 0.11 % 3,128 0.78 % 1,876 0.52 % 1,678 0.50 % 837 0.22 %
Commercial 57 0.02 % 262 0.07 % 226 0.06 % 192 0.06 % 308 0.08 %
Consumer 7 0.00 % 21 0.01 % 5 0.00 % 7 0.00 % 6 0.00 %
Gross loans 362,044 100.00 % 399,701 100.00 % 357,548 100.00 % 337,354 100.00 % 382,264 100.00 %
Plus:
Premiums on loans purchased 88 171 259 360 510
Deferred loan costs, net 1,218 1,211 721 1,220 1,297
Less:
Unamortized discounts 6 54 43 14 14
Allowance for loan losses 3,215 3,182 2,929 4,069 4,603
Total loans held for investment $ 360,129 $ 397,847 $ 355,556 $ 334,851 $ 379,454

Multi‑Family and Commercial Real Estate Lending

Our primary lending emphasis has been on the origination of loans for apartment buildings with five or more units. These multi‑family loans amounted to $272.4 million and $287.4 million at December 31, 2020 and 2019, respectively. Multi‑family loans represented 75% of our gross loan portfolio at December 31, 2020 compared to 72% of our gross loan portfolio at December 31, 2019. The vast majority of our multi‑family loans amortize over 30 years. As of December 31, 2020, our single largest multi‑family credit had an outstanding balance of $6.9 million, was current, and was secured by a 33‑unit apartment complex in Vista, California. At December 31, 2020, the average balance of a loan in our multi‑family portfolio was $1.0 million.

Our commercial real estate loans amounted to $24.3 million and $14.7 million at December 31, 2020 and 2019, respectively. Commercial real estate loans represented 7% and 4% of our gross loan portfolios at December 31, 2020 and 2019, respectively. All the commercial real estate loans outstanding at December 31, 2020 were ARM Loans. Most commercial real estate loans are originated with principal repayments on a 30 year amortization schedule but are due in 10 years. As of December 31, 2020, our single largest commercial real estate credit had an outstanding principal balance of $5.7 million, was current, and was secured by a charter school building located in Washington, D. C. At December 31, 2020, the average balance of a loan in our commercial real estate portfolio was $1.4 million.

The interest rates on multi‑family and commercial ARM Loans are based on a variety of indices, including the 6‑Month London InterBank Offered Rate Index (“6‑Month LIBOR”), the 1‑Year Constant Maturity Treasury Index (“1‑Yr CMT”), the 12‑Month Treasury Average Index (“12‑MTA”), the 11th District Cost of Funds Index (“COFI”), and the Wall Street Journal Prime Rate (“Prime Rate”). We currently offer adjustable rate loans with interest rates that adjust either semi‑annually or semi‑annually upon expiration of an initial three‑ or five‑year fixed rate period. Borrowers are required to make monthly payments under the terms of such loans.

3

Table of Contents

Loans secured by multi‑family and commercial properties are granted based on the income producing potential of the property and the financial strength of the borrower. The primary factors considered include, among other things, the net operating income of the mortgaged premises before debt service and depreciation, the debt service coverage ratio (the ratio of net operating income to required principal and interest payments, or debt service), and the ratio of the loan amount to the lower of the purchase price or the appraised value of the collateral.

We seek to mitigate the risks associated with multi‑family and commercial real estate loans by applying appropriate underwriting requirements, which include limitations on loan‑to‑value ratios and debt service coverage ratios. Under our underwriting policies, loan‑to‑value ratios on our multi‑family and commercial real estate loans usually do not exceed 75% of the lower of the purchase price or the appraised value of the underlying property. We also generally require minimum debt service coverage ratios of 120% for multi‑family loans and 125% for commercial real estate loans. Properties securing multi‑family and commercial real estate loans are appraised by management‑approved independent appraisers. Title insurance is required on all loans.

Multi‑family and commercial real estate loans are generally viewed as exposing the lender to a greater risk of loss than single family residential loans and typically involve higher loan principal amounts than loans secured by single family residential real estate. Because payments on loans secured by multi‑family and commercial real properties are often dependent on the successful operation or management of the properties, repayment of such loans may be subject to adverse conditions in the real estate market or general economy. Adverse economic conditions in our primary lending market area could result in reduced cash flows on multi‑family and commercial real estate loans, vacancies and reduced rental rates on such properties. We seek to reduce these risks by originating such loans on a selective basis and generally restrict such loans to our general market area. In 2008, we ceased out‑of‑state lending for all types of loans.  In 2020, we resumed out-of-state lending on a selective basis by originating two commercial real estate loans in Washington, D. C., totaling $9.8 million.  As of December 31, 2020, our out‑of‑state loans totaled $11.0 million and our single largest out‑of‑state credit had an outstanding balance of $5.7 million, was current, and was secured by a charter school building located in Washington, D. C.

Our church loans totaled $16.7 million and $21.3 million at December 31, 2020 and 2019, respectively, which represented 5% of our gross loan portfolio at December 31, 2020, and December 31, 2019. We ceased originating church loans in 2010. As of December 31, 2020, our single largest church loan had an outstanding balance of $1.5 million, was current, and was secured by a church building in Los Angles, California. At December 31, 2020, the average balance of a loan in our church loan portfolio was $527 thousand.

Single Family Mortgage Lending

While we have been primarily a multi‑family and commercial real estate lender, we also have purchased or originated ARM Loans secured by single family residential properties, including investor‑owned properties, with maturities of up to 30 years. Single family loans totaled $48.2 million and $72.9 million at December 31, 2020 and 2019, respectively. Of the single family residential mortgage loans outstanding at December 31, 2020, more than 99% had adjustable rate features. We did not purchase any single family loans during 2020 and 2019. Of the $48.2 million of single family loans at December 31, 2020, $5.8 million are secured by investor‑owned properties.

The interest rates for our single family ARM Loans are indexed to COFI, 1‑Month LIBOR, 6‑Month LIBOR, 12‑MTA and 1‑Yr. CMT. We currently offer loans with interest rates that adjust either semi‑annually or semi‑annually upon expiration of an initial three‑ or five‑year fixed rate period. Borrowers are required to make monthly payments under the terms of such loans.  Most of our single family adjustable rate loans behave like fixed rate loans because the loans are still in their initial fixed rate period or are subject to interest rate floors.

We qualify our ARM Loan borrowers based upon the fully indexed interest rate (LIBOR or other index plus an applicable margin) provided by the terms of the loan. However, we may discount the initial rate paid by the borrower to adjust for market and other competitive factors. The ARM Loans that we offer have a lifetime adjustment limit that is set at the time that the loan is approved. In addition, because of interest rate caps and floors, market rates may exceed or go below the respective maximum or minimum rates payable on our ARM Loans.

The mortgage loans that we originate generally include due‑on‑sale clauses, which provide us with the contractual right to declare the loan immediately due and payable if the borrower transfers ownership of the property.

4

Table of Contents

Construction Lending

Construction loans totaled $429 thousand and $3.1 million at December 31, 2020 and 2019, respectively, representing less than 1% of our gross loan portfolio. We provide loans for the construction of single family, multi‑family and commercial real estate projects and for land development. We generally make construction and land loans at variable interest rates based upon the Prime Rate. Generally, we require a loan‑to‑value ratio not exceeding 75% to 80% and a loan‑to‑cost ratio not exceeding 70% to 80% on construction loans.

Construction loans involve risks that are different from those for completed project lending because we advance loan funds based upon the security and estimated value at completion of the project under construction. If the borrower defaults on the loan, we may have to advance additional funds to finance the project’s completion before the project can be sold. Moreover, construction projects are affected by uncertainties inherent in estimating construction costs, potential delays in construction schedules, market demand and the accuracy of estimates of the value of the completed project considered in the loan approval process. In addition, construction projects can be risky as they transition to completion and lease‑up. Tenants who may have been interested in leasing a unit or apartment may not be able to afford the space when the building is completed, or may fail to lease the space for other reasons such as more attractive terms offered by competing lessors, making it difficult for the building to generate enough cash flow for the owner to obtain permanent financing. During 2020, $1.5 million of construction loans were originated, compared to $1.7 million during 2019.

Loan Originations, Purchases and Sales

The following table summarizes loan originations, purchases, sales and principal repayments for the periods indicated:

2020 2019 2018
(In thousands)
Gross loans (1):
Beginning balance $ 399,701 $ 363,761 $ 359,686
Loans originated:
Multi‑family 120,809 103,123 96,034
Commercial Real Estate 11,870 9,521 1,017
Construction 1,529 1,681 1,861
Commercial 66 49 48
Total loans originated 134,274 114,374 98,960
Less:
Principal repayments 67,858 55,742 75,542
Sales of loans 104,073 22,703 19,332
Loan charge‑offs - ‑ ‑
Lower of cost or fair value adjustment on loans held for sale - (11 ) 11
Transfer of loans to real estate owned - ‑ ‑
Ending balance (2) $ 362,044 $ 399,701 $ 363,761
(1) Amount is before deferred origination costs, purchase premiums and discounts.
(2) No loans were held for sale at December 31, 2020 and 2019.  At December 31, 2018, loans receivable held for sale totaled $6.2 million.
--- ---

Loan originations are derived from various sources including our loan personnel, local mortgage brokers, and referrals from customers. More than 90% of multi-family and commercial loan originations during 2020, 2019 and 2018 were  sourced from wholesale loan brokers. All construction loan originations were derived from our loan personnel. No single family or consumer loans were originated during the last three years. For all loans that we originate, upon receipt of a loan application from a prospective borrower, a credit report is ordered, and certain other information is verified by an independent credit agency and, if necessary, additional financial information is requested. An appraisal of the real estate intended to secure the proposed loan is required to be performed by an independent licensed or certified appraiser designated and approved by us. The Bank’s Board of Directors (the “Board”) annually reviews our appraisal policy. Management reviews annually the qualifications and performance of independent appraisers that we use.

It is our policy to obtain title insurance on collateral for all real estate loans. Borrowers must also obtain hazard insurance naming Broadway Federal as a loss payee prior to loan closing. If the original loan amount exceeds 80% on a sale or refinance of a first trust deed loan, we may require private mortgage insurance and the borrower is required to make payments to a mortgage impound account from which we make disbursements to pay private mortgage insurance premiums, property taxes and hazard and flood insurance as required.

5

Table of Contents

The Board has authorized the following loan approval limits: if the total of the borrower’s existing loans and the loan under consideration is $1,000,000 or less, the new loan may be approved by a Senior Underwriter plus a Loan Committee member, including the Chief Executive Officer or Chief Credit Officer of the Bank; if the total of the borrower’s existing loans and the loan under consideration is from $1,000,001 to $2,000,000, the new loan must be approved by a Senior Underwriter plus two Loan Committee members, including the Chief Executive Officer or Chief Credit Officer of the Bank; if the total of the borrower’s existing loans and the loan under consideration is from $2,000,001 to $7,000,000, the new loan must be approved by a Senior Underwriter plus two Loan Committee members, including the Chief Executive Officer and Chief Credit Officer of the Bank, and a majority of the Board‑appointed non‑management Loan Committee Directors. In addition, it is our practice that all loans approved be reported to the Loan Committee no later than the month following their approval and be ratified by the Board.

From time to time, we purchase loans originated by other institutions based upon our investment needs and market opportunities. The determination to purchase specific loans or pools of loans is subject to our underwriting policies, which consider, among other factors, the financial condition of the borrowers, the location of the underlying collateral properties and the appraised value of the collateral properties. We did not purchase any loans during the years ended December 31, 2020, 2019 or 2018.

We originate loans for investment and for sale. Loan sales are generally made from the loans held‑for‑sale portfolio. During 2020, we originated $118.6 million of multi‑family loans for sale, sold $104.3 million of multi‑family loans and transferred $13.7 million of multi family loans to held for investment from loans held for sale. We transferred the $13.7 milion of multi-family loans to loans held for investment near the end of 2020 because there was room to do so within the regulatory loan concentration guidelines. During 2019, we originated $15.2 million of multi‑family loans for sale, transferred $1.5 million of multi‑family loans to held‑for‑sale from held‑for‑investment and sold $22.7 million of multi‑family loans in order to comply with regulatory loan concentration guidelines.

We receive monthly loan servicing fees on loans sold and serviced for others, primarily insured financial institutions. Generally, we collect these fees by retaining a portion of the loan collections in an amount equal to an agreed percentage of the monthly loan installments, plus late charges and certain other fees paid by the borrowers. Loan servicing activities include monthly loan payment collection, monitoring of insurance and tax payment status, responses to borrower information requests and dealing with loan delinquencies and defaults, including conducting loan foreclosures. At December 31, 2020 and 2019, we serviced $238 thousand and $1.2 million, respectively, of loans for others. The servicing rights associated with sold loans are recorded as assets based upon their fair values. At December 31, 2020 and 2019, we had $3 thousand and $9 thousand, respectively, in mortgage servicing rights.

Loan Maturity and Repricing

The following table shows the contractual maturities of loans in our portfolio of loans held for investment at December 31, 2020 and does not reflect the effect of prepayments or scheduled principal amortization.

Single<br><br> <br>family Multi‑<br><br> <br>family Commercial<br><br> <br>real estate Church Construction Commercial Consumer Gross<br><br> <br>loans<br><br> <br>receivable
(In thousands)
Amounts Due:
After one year:
One year to five years $ 1,210 $ - $ 11,175 $ 14,642 $ - $ - $ - $ 27,027
After five years 47,006 272,387 12,688 116 - 9 332,206
Total due after one year 48,216 272,387 23,863 14,758 - 9 - 359,233
One year or less 1 - 426 1,900 429 48 7 2,811
Total $ 48,217 $ 272,387 $ 24,289 $ 16,658 $ 429 $ 57 $ 7 $ 362,044

Loans in their initial fixed rate period totaled $293.3 million or 81% of our loan portfolio at December 31, 2020. The average remaining initial fixed rate period as of December 31, 2020 was 2.3 years.

6

Table of Contents

Asset Quality

General

The underlying credit quality of our loan portfolio is dependent primarily on each borrower’s ability to continue to make required loan payments and, in the event a borrower is unable to continue to do so, the value of the collateral securing the loan, if any. A borrower’s ability to pay typically is dependent, in the case of single family residential loans and consumer loans, primarily on employment and other sources of income, and in the case of multi‑family and commercial real estate loans, on the cash flow generated by the property, which in turn is impacted by general economic conditions. Other factors, such as unanticipated expenditures or changes in the financial markets, may also impact a borrower’s ability to make loan payments. Collateral values, particularly real estate values, are also impacted by a variety of factors, including general economic conditions, demographics, property maintenance and collection or foreclosure delays.

Delinquencies

We perform a weekly review of all delinquent loans and a monthly loan delinquency report is made to the Internal Asset Review Committee of the Board of Directors. When a borrower fails to make a required payment on a loan, we take several steps to induce the borrower to cure the delinquency and restore the loan to current status. The procedures we follow with respect to delinquencies vary depending on the type of loan, the type of property securing the loan, and the period of delinquency. In the case of residential mortgage loans, we generally send the borrower a written notice of non‑payment promptly after the loan becomes past due. In the event payment is not received promptly thereafter, additional letters are sent, and telephone calls are made. If the loan is still not brought current and it becomes necessary for us to take legal action, we generally commence foreclosure proceedings on all real property securing the loan. In the case of commercial real estate loans, we generally contact the borrower by telephone and send a written notice of intent to foreclose upon expiration of the applicable grace period. Decisions not to commence foreclosure upon expiration of the notice of intent to foreclose for commercial real estate loans are made on a case‑by‑case basis. We may consider loan workout arrangements with commercial real estate borrowers in certain circumstances.

The following table shows our loan delinquencies by type and amount at the dates indicated:

December 31, 2020 December 31, 2019 December 31, 2018
Loans delinquent Loans delinquent Loans delinquent
60‑89 Days 90 days or more 60‑89 Days 90 days or more 60‑89 Days 90 days or more
Number Amount Number Amount Number Amount Number Amount Number Amount Number Amount
(Dollars in thousands)
Single family - $ - ‑ $ ‑ 1 $ 18 ‑ $ ‑ 1 $ 35 ‑ $ -
Total $ - ‑ $ ‑ 1 $ 18 ‑ $ ‑ 1 $ 35 ‑ $ ‑
% of Gross Loans (1) 0.00 % 0.00% 0.00 % 0.00% 0.01 % 0.00 %
(1) Includes loans receivable held for sale at December 31, 2018.

Non‑Performing Assets

Non‑performing assets (“NPAs”) include non‑accrual loans and real estate owned through foreclosure or deed in lieu of foreclosure (“REO”). NPAs at December 31, 2020 increased to $787 thousand, or 0.16% of total assets, from $424 thousand, or 0.10% of total assets, at December 31, 2019.

Non-accrual loans consist of delinquent loans that are 90 days or more past due and other loans, including troubled debt restructurings (“TDRs”) that do not qualify for accrual status. As of December 31, 2020, all our non‑accrual loans were current in their payments, but were treated as non‑accrual primarily because of deficiencies in non‑payment matters related to the borrowers, such as lack of current financial information. The $363 thousand increase in non‑accrual loans during the year ended December 31, 2020 was due to a downgrade of $554 thousand of a church loan to non‑accrual status offset by a sale of $130 thousand of a church loan and repayments of $61 thousand.

The following table provides information regarding our non‑performing assets at the dates indicated:

December 31,
2020 2019 2018 2017 2016
(Dollars in thousands)
Non‑accrual loans:
Single family $ 1 $ 18 ‑ ‑ ‑
Multi‑family ‑ ‑ ‑ ‑ ‑
Commercial real estate ‑ ‑ ‑ ‑ ‑
Church 786 406
Commercial ‑ ‑ ‑ ‑ ‑
Total non‑accrual loans 787 424
Loans delinquent 90 days or more and still accruing ‑ ‑ ‑ ‑ ‑
Real estate owned acquired through foreclosure - - ‑
Total non‑performing assets $ 787 $ 424
Non‑accrual loans as a percentage of gross loans, including loans receivable held for sale 0.22 % 0.11 % % % %
Non‑performing assets as a percentage of total assets 0.16 % 0.10 % % % %

All values are in US Dollars.

7

Table of Contents

There were no accrual loans that were contractually past due by 90 days or more at December 31, 2020 or 2019. We had no commitments to lend additional funds to borrowers whose loans were on non‑accrual status at December 31, 2020.

We discontinue accruing interest on loans when the loans become 90 days delinquent as to their payment due date (missed three payments). In addition, we reverse all previously accrued and uncollected interest for those loans through a charge to interest income. While loans are in non‑accrual status, interest received on such loans is credited to principal, until the loans qualify for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

We may agree to modify the contractual terms of a borrower’s loan. In cases where such modifications represent a concession to a borrower experiencing financial difficulty, the modification is considered a TDR. Non‑accrual loans modified in a TDR remain on non‑accrual status until we determine that future collection of principal and interest is reasonably assured, which requires that the borrower demonstrate performance according to the restructured terms, generally for a period of at least six months. Loans modified in a TDR that are included in non‑accrual loans totaled $232 thousand at December 31, 2020 and $406 thousand at December 31, 2019. Excluded from non‑accrual loans are restructured loans that were not delinquent at the time of modification or loans that have complied with the terms of their restructured agreement for six months or such longer period as management deems appropriate for particular loans, and therefore have been returned to accruing status. Restructured accruing loans totaled $4.2 million at December 31, 2020 and $4.7 million at December 31, 2019.

During 2020, gross interest income that would have been recorded on non‑accrual loans had they performed in accordance with their original terms, totaled $39 thousand. Actual interest recognized on non‑accrual loans and included in net income for the year 2020 was $162 thousand, reflecting interest recoveries on non‑accrual loans that were paid off.

We update our estimates of collateral value on loans when they become 90 days past due and to the extent the loans remain delinquent, every nine months thereafter. We obtain updated estimates of collateral value earlier than at 90 days past due for loans to borrowers who have filed for bankruptcy or for certain other loans when our Internal Asset Review Committee believes repayment of such loans may be dependent on the value of the underlying collateral. For single family loans, updated estimates of collateral value are obtained through appraisals and automated valuation models. For multi‑family and commercial real estate properties, we estimate collateral value through appraisals or internal cash flow analyses when current financial information is available, coupled with, in most cases, an inspection of the property. Our policy is to make a charge against our allowance for loan losses, and correspondingly reduce the book value of a loan, to the extent that the collateral value of the property securing a loan is less than our recorded investment in the loan. See “Allowance for Loan Losses” for full discussion of the allowance for loan losses.

REO is real estate acquired as a result of foreclosure or by deed in lieu of foreclosure and is carried at fair value less estimated selling costs. Any excess of carrying value over fair value at the time of acquisition is charged to the allowance for loan losses. Thereafter, we charge non‑interest expense for the property maintenance and protection expenses incurred as a result of owning the property. Any decreases in the property’s estimated fair value after foreclosure are recorded in a separate allowance for losses on REO. During 2020 and 2019, the Bank did not foreclose on any loans. At December 31, 2018, the Bank had one REO which was sold during 2019.

8

Table of Contents

Classification of Assets

Federal regulations and our internal policies require that we utilize an asset classification system as a means of monitoring and reporting problem and potential problem assets. We have incorporated asset classifications as a part of our credit monitoring system and thus classify potential problem assets as “Watch” and “Special Mention,” and problem assets as “Substandard,” “Doubtful” or “Loss”. An asset is considered “Watch” if the loan is current but temporarily presents higher than average risk and warrants greater than routine attention and monitoring. An asset is considered “Special Mention” if the loan is current but there are some potential weaknesses that deserve management’s close attention. An asset is considered “Substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “Doubtful” have all the weaknesses inherent in those classified “Substandard” with the added characteristic that the weaknesses make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “Loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss allowance is not warranted. Assets which do not currently expose us to sufficient risk to warrant classification in one of the aforementioned categories, but that are considered to possess some weaknesses, are designated “Special Mention.” Our Internal Asset Review Department reviews and classifies our assets and independently reports the results of its reviews to the Internal Asset Review Committee of our Board of Directors monthly.

The following table provides information regarding our criticized loans (Watch and Special Mention) and classified assets (Substandard and REO) at the dates indicated:

December 31, 2020 December 31, 2019
Number Amount Number Amount
(Dollars in thousands)
Watch loans 2 $ 2,145 2 $ 822
Special mention loans - - - -
Total criticized loans 2 2,145 2 822
Substandard loans 9 3,162 11 4,153
REO - - - -
Total classified assets 9 3,162 11 4,153
Total 11 $ 5,307 13 $ 4,975

Criticized assets increased to $2.1 million at December 31, 2020, from $822 thousand at December 31, 2019, primarily due to a downgrade of $1.5 million on a commercial real estate loan from the pass loan category to Watch status and an upgrade of $657 thousand on a church loan from substandard status, offset by $822 thousand payoffs of all criticized loans carried from December 31, 2019. Classified assets decreased to $3.1 million at December 31, 2020, from $4.2 million at December 31, 2019, primarily due to an upgrade of a church loan to Watch status and loan payoffs.

Allowance for Loan Losses

In originating loans, we recognize that losses may be experienced on loans and that the risk of loss may vary as a result of many factors, including the type of loan being made, the creditworthiness of the borrower, general economic conditions and, in the case of a secured loan, the quality of the collateral for the loan. We are required to maintain an adequate allowance for loan and lease losses (“ALLL”) in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The ALLL represents our management’s best estimate of probable incurred credit losses in our loan portfolio as of the date of the consolidated financial statements. Our ALLL is intended to cover specifically identifiable loan losses, as well as estimated losses inherent in our portfolio for which certain losses are probable, but not specifically identifiable. There can be no assurance, however, that actual losses incurred will not exceed the amount of management’s estimates.

Our Internal Asset Review Department issues reports to the Board of Directors and continually reviews loan quality. This analysis includes a detailed review of the classification and categorization of problem loans, potential problem loans and loans to be charged off, an assessment of the overall quality and collectability of the portfolio, and concentration of credit risk. Management then evaluates the allowance, determines its appropriate level and the need for additional provisions, and presents its analysis to the Board of Directors which ultimately reviews management’s recommendation and, if deemed appropriate, then approves such recommendation.

The ALLL is increased by provisions for loan losses which are charged to earnings and is decreased by recaptures of loan loss provision and charge‑offs, net of recoveries. Provisions are recorded to increase the ALLL to the level deemed appropriate by management. The Bank utilizes an allowance methodology that considers a number of quantitative and qualitative factors, including the amount of non‑performing loans, our loan loss experience, conditions in the general real estate and housing markets, current economic conditions and trends, particularly levels of unemployment, and changes in the size of the loan portfolio.

9

Table of Contents

The ALLL consists of specific and general components. The specific component relates to loans that are individually classified as impaired.

A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Loans for which the terms have been modified, and for which the borrower is experiencing financial difficulties, are considered TDRs and classified as impaired. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case‑by‑case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

If a loan is impaired, a portion of the allowance is allocated to the loan so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. TDRs are separately identified for impairment and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a TDR is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral less estimated selling costs. For TDRs that subsequently default, we determine the amount of any necessary additional charge‑off based on internal analyses and appraisals of the underlying collateral securing these loans. At December 31, 2020, impaired loans totaled $4.7 million and had an aggregate specific allowance allocation of $141 thousand.

The general component of the ALLL covers non‑impaired loans and is based on historical loss experience adjusted for qualitative factors. Each month, we prepare an analysis which categorizes the entire loan portfolio by certain risk characteristics such as loan type (single family, multi‑family, commercial real estate, construction, commercial and consumer) and loan classification (pass, watch, special mention, substandard and doubtful). With the use of a migration to loss analysis, we calculate our historical loss rate and assign estimated loss factors to the loan classification categories based on our assessment of the potential risk inherent in each loan type. These factors are periodically reviewed for appropriateness giving consideration to our historical loss experience, levels of and trends in delinquencies and impaired loans; levels of and trends in charge‑offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.

In addition to loss experience and environmental factors, we use qualitative analyses to determine the adequacy of our ALLL. This analysis includes ratio analysis to evaluate the overall measurement of the ALLL and comparison of peer group reserve percentages. The qualitative review is used to reassess the overall determination of the ALLL and to ensure that directional changes in the ALLL and the provision for loan losses are supported by relevant internal and external data.

Based on our evaluation of the housing and real estate markets and overall economy, including the unemployment rate, the levels and composition of our loan delinquencies and non‑performing loans (no forebearances and no modifictions formally requested by the borrowers), our loss history and the size and composition of our loan portfolio, we determined that an ALLL of $3.2 million, or 0.88% of loans held for investment was appropriate at December 31, 2020, compared to $3.2 million, or 0.79% of loans held for investment at December 31, 2019. The increase in ALLL compared to the prior year was primarily due to uncertainty related to the COVID-19 Pandemic.

A federally chartered savings association’s determination as to the classification of its assets and the amount of its valuation allowances is subject to review by the OCC. The OCC, in conjunction with the other federal banking agencies, provides guidance for financial institutions on the responsibilities of management for the assessment and establishment of adequate valuation allowances, as well as guidance for banking agency examiners to use in determining the adequacy of valuation allowances. It is required that all institutions have effective systems and controls to identify, monitor and address asset quality problems, analyze all significant factors that affect the collectability of the portfolio in a reasonable manner and establish acceptable allowance evaluation processes that meet the objectives of the guidelines issued by federal regulatory agencies. While we believe that the ALLL has been established and maintained at adequate levels, future adjustments may be necessary if economic or other conditions differ materially from the conditions on which we based our estimates at December 31, 2020. In addition, there can be no assurance that the OCC or other regulators, as a result of reviewing our loan portfolio and/or allowance, will not require us to materially increase our ALLL, thereby affecting our financial condition and earnings.

10

Table of Contents

The following table details our allocation of the ALLL to the various categories of loans held for investment and the percentage of loans in each category to total loans at the dates indicated:

December 31,
2020 2019 2018 2017 2016
Amount Percent<br><br> <br>of loans<br><br> <br>in each<br><br> <br>category<br><br> <br>to total<br><br> <br>loans Amount Percent<br><br> <br>of loans<br><br> <br>in each<br><br> <br>category<br><br> <br>to total<br><br> <br>loans Amount Percent<br><br> <br>of loans<br><br> <br>in each<br><br> <br>category<br><br> <br>to total<br><br> <br>loans Amount Percent<br><br> <br>of loans<br><br> <br>in each<br><br> <br>category<br><br> <br>to total<br><br> <br>loans Amount Percent<br><br> <br>of loans<br><br> <br>in each<br><br> <br>category<br><br> <br>to total<br><br> <br>loans
(Dollars in thousands)
Single family $ 296 0.08 % $ 312 0.08 % $ 368 0.10 % $ 594 0.17 % $ 367 0.10 %
Multi‑family 2,433 0.67 % 2,319 0.58 % 1,880 0.52 % 2,300 0.68 % 2,659 0.69 %
Commercial real estate 222 0.06 % 133 0.03 % 52 0.02 % 71 0.02 % 215 0.06 %
Church 237 0.06 % 362 0.09 % 604 0.17 % 1,081 0.32 % 1,337 0.35 %
Construction 22 0.01 % 48 0.01 % 19 0.01 % 17 0.01 % 8 0.00 %
Commercial 4 0.00 % 7 0.00 % 6 0.00 % 6 0.00 % 17 0.00 %
Consumer 1 0.00 % 1 0.00 % ‑ 0.00 % ‑ 0.00 % ‑ 0.00 %
Total allowance for loan losses $ 3,215 0.88 % $ 3,182 0.79 % $ 2,929 0.82 % $ 4,069 1.20 % $ 4,603 1.20 %

The following table shows the activity in our ALLL related to our loans held for investment for the years indicated:

2020 2019 2018 2017 2016
(Dollars in thousands)
Allowance balance at beginning of year $ 3,182 $ 2,929 $ 4,069 $ 4,603 $ 4,828
Charge‑offs:
Single family ‑ ‑ ‑ ‑ ‑
Multi‑family ‑ ‑ ‑ ‑ ‑
Commercial real estate ‑ ‑ ‑ ‑ ‑
Church ‑ ‑ ‑ ‑ ‑
Commercial ‑ ‑ ‑ ‑ ‑
Total charge‑offs ‑ ‑ ‑ ‑ ‑
Recoveries:
Single family 4 ‑ ‑ 30 47
Commercial real estate ‑ ‑ ‑ ‑ 248
Church - 260 114 536 22
Commercial ‑ ‑ ‑ ‑ 8
Total recoveries 4 260 114 566 325
Loan loss provision (recapture) 29 (7 ) (1,254 ) (1,100 ) (550 )
Allowance balance at end of year $ 3,215 $ 3,182 $ 2,929 $ 4,069 $ 4,603
Net charge‑offs (recoveries) to average loans, excluding loans receivable held for sale (0.00 %) (0.07 %) (0.04 %) (0.16 %) (0.10 %)
ALLL as a percentage of gross loans ^(1)^, excluding loans receivable held for sale 0.88 % 0.79 % 0.82 % 1.20 % 1.20 %
ALLL as a percentage of total non‑accrual loans 408.51 % 750.47 % 321.51 % 230.41 % 156.35 %
ALLL as a percentage of total non‑performing assets 408.51 % 750.47 % 167.94 % 153.90 % 156.35 %
^(1)^ Including net deferred loan costs and premiums.
--- ---

11

Table of Contents

Investment Activities

The main objectives of our investment strategy are to provide a source of liquidity for deposit outflows, repayment of our borrowings and funding loan commitments, and to generate a favorable return on investments without incurring undue interest rate or credit risk. Subject to various restrictions, our investment policy generally permits investments in money market instruments such as Federal Funds Sold, certificates of deposit of insured banks and savings institutions, direct obligations of the U. S. Treasury, securities issued by federal and other government agencies and mortgage‑backed securities, mutual funds, municipal obligations, corporate bonds and marketable equity securities. Mortgage‑backed securities consist principally of securities issued by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and the Government National Mortgage Association which are backed by 30‑year amortizing hybrid ARM Loans, structured with fixed interest rates for periods of three to seven years, after which time the loans convert to one‑year or six‑month adjustable rate mortgage loans. At December 31, 2020, our securities portfolio, consisting primarily of federal agency debt, mortgage‑backed securities and municipal bonds, totaled $10.7 million, or 2.2% of total assets.

We classify investments as held‑to‑maturity or available‑for‑sale at the date of purchase based on our assessment of our internal liquidity requirements. Securities purchased to meet investment‑related objectives such as liquidity management or mitigating interest rate risk and which may be sold as necessary to implement management strategies, are designated as available‑for‑sale at the time of purchase. Securities in the held‑to‑maturity category consist of securities purchased for long‑term investment in order to enhance our ongoing stream of net interest income. Securities deemed held‑to‑maturity are classified as such because we have both the intent and ability to hold these securities to maturity. Held‑to‑maturity securities are reported at cost, adjusted for amortization of premium and accretion of discount. Available‑for‑sale securities are reported at fair value. We currently have no securities classified as held‑to‑maturity securities.

The table below presents the carrying amount, weighted average yields and contractual maturities of our securities as of December 31, 2020. The table reflects stated final maturities and does not reflect scheduled principal payments or expected payoffs.

At December 31, 2020
One Year or less More than one<br><br> <br>year<br><br> <br>to five years More than five<br><br> <br>years<br><br> <br>to ten years More than<br><br> <br>ten years Total
Carrying<br><br> <br>amount Weighted<br><br> <br>average<br><br> <br>yield Carrying<br><br> <br>amount Weighted<br><br> <br>average<br><br> <br>yield Carrying<br><br> <br>amount Weighted<br><br> <br>average<br><br> <br>yield Carrying<br><br> <br>amount Weighted<br><br> <br>average<br><br> <br>yield Carrying<br><br> <br>amount Weighted<br><br> <br>average<br><br> <br>yield
(Dollars in thousands)
Available‑for‑sale:
Federal agency mortgage‑backed securities $ - - % $ - - % $ 1,554 2.45 % $ 4,253 2.37 % $ 5,807 2.39 %
Federal agency debt - - % - - % - - % 2,872 2.67 % 2,872 2.67 %
Municipal bonds - - % - - % 2,019 1.38 % - - % 2,019 1.38 %
Total $ - - % $ - - % $ 3,573 1.85 % $ 7,125 2.49 % $ 10,698 2.28 %

At December 31, 2020, the securities in our portfolio had an estimated remaining life of 4.1 years.  During 2020, the Bank purchased five municipal bonds totaling $2.0 million at 1.38% weighted average rate, and a weighted average remaining life of 6.4 years at December 31, 2020.  There were no sales of securities during the year ended December 31, 2020.

12

Table of Contents

The following table sets forth the amortized cost and fair value of available-for-sale securities by type as of the dates indicated. At December 31, 2020, our securities portfolio did not contain securities of any issuer with an aggregate book value in excess of 10% of our equity capital, excluding those issued by the United States Government or its agencies.

​ At December 31,
​ 2020 2019 ​ 2018
​ Amortized<br><br> <br>Cost Fair<br><br> <br>Value Amortized<br><br> <br>Cost​ Fair<br><br> <br>Value​ Amortized<br><br> <br>Cost​ Fair<br><br> <br>Value
​ (Dollars in thousands)
U.S. Government Agencies $ 2,683 $ 2,872 $ 3,014 $ 3,050 $ 5,317 $ 5,214
Mortgage-backed securities 5,550 5,807 7,793 7,957 9,575 9,508
Municipal securities 2,000 2,019 - - - -
Total $ 10,233 $ 10,698 $ 10,807 $ 11,007 $ 14,892 $ 14,722

Sources of Funds

General

Deposits are our primary source of funds for supporting our lending and other investment activities and general business purposes. In addition to deposits, we obtain funds from the amortization and prepayment of loans and investment securities, sales of loans and investment securities, advances from the FHLB, and cash flows generated by operations.

Deposits

We offer a variety of deposit accounts featuring a range of interest rates and terms. Our deposits principally consist of savings accounts, checking accounts, NOW accounts, money market accounts, and fixed‑term certificates of deposit. The maturities of term certificates generally range from one month to five years. We accept deposits from customers within our market area based primarily on posted rates, but from time to time we will negotiate the rate based on the amount of the deposit. We primarily rely on customer service and long‑standing customer relationships to attract and retain deposits. We seek to maintain and increase our retail “core” deposit relationships, consisting of savings accounts, checking accounts and money market accounts because we believe these deposit accounts tend to be a stable funding source and are available at a lower cost than term deposits. However, market interest rates, including rates offered by competing financial institutions, the availability of other investment alternatives, and general economic conditions significantly affect our ability to attract and retain deposits.

We participate in a deposit program called the Certificate of Deposit Account Registry Service (“CDARS”). CDARS is a deposit placement service that allows us to place our customers’ funds in FDIC‑insured certificates of deposit at other banks and, at the same time, receive an equal sum of funds from the customers of other banks in the CDARS Network (“CDARS Reciprocal”). We may also accept deposits from other institutions when we have no reciprocal deposit (“CDARS One‑Way Deposits”). We had approximately $35.8 million in CDARS Reciprocal and $9.6 million in CDARS One‑Way Deposits at December 31, 2020, compared to $39.3 million in CDARS Reciprocal and $40.7 million in CDARS One‑Way Deposits at December 31, 2019.  The decrease in CDARS One-Way Deposits during 2020 was impacted by an increase in the Bank’s overall liquidity and the intentional non-renewal of these deposits at maturity due to their high costs.

13

Table of Contents

The following table details the maturity periods of our certificates of deposit in amounts of $100 thousand or more at December 31, 2020.

December 31, 2020
Amount Weighted<br><br> <br>average rate
(Dollars in thousands)
Certificates maturing:
Less than three months $ 27,828 1.24 %
Three to six months 33,857 1.09 %
Six to twelve months 35,050 0.54 %
Over twelve months 10,498 0.97 %
Total $ 107,233 0.93 %

The following table presents the distribution of our average deposits for the years indicated and the weighted average interest rates during the year for each category of deposits presented.

For the Year Ended December 31,
2020 2019 2018
Average<br><br> <br>balance Percent<br><br> <br>of total Weighted<br><br> <br>average<br><br> <br>rate Average<br><br> <br>balance Percent<br><br> <br>of total Weighted<br><br> <br>average<br><br> <br>rate Average<br><br> <br>balance Percent<br><br> <br>of total Weighted<br><br> <br>average<br><br> <br>rate
(Dollars in thousands)
Money market deposits $ 47,611 14.88 % 0.56 % $ 25,297 8.86 % 0.94 % $ 37,489 13.45 % 1.07 %
Passbook deposits 55,985 17.51 % 0.44 % 45,548 15.95 % 0.60 % 41,975 15.00 % 0.38 %
NOW and other demand deposits 55,003 17.17 % 0.03 % 34,091 11.94 % 0.04 % 34,779 12.51 % 0.09 %
Certificates of deposit 161,409 50.44 % 1.97 % 180,611 63.25 % 1.99 % 164,703 59.04 % 1.49 %
Total $ 320,008 100.00 % 1.01 % $ 285,547 100.00 % 1.44 % $ 278,946 100.00 % 1.10 %

Borrowings

We utilize short‑term and long‑term advances from the FHLB as an alternative to retail deposits as a funding source for asset growth. FHLB advances are generally secured by mortgage loans and mortgage‑backed securities. Such advances are made pursuant to several different credit programs, each of which has its own interest rate and range of maturities. The maximum amount that the FHLB will advance to member institutions fluctuates from time to time in accordance with the policies of the FHLB. At December 31, 2020, we had $110.5 million in FHLB advances and had the ability to borrow up to an additional $40.3 million based on available and pledged collateral.

The following table summarizes information concerning our FHLB advances at or for the periods indicated:

At or For the Year Ended
2020 2019 2018
(Dollars in thousands)
FHLB Advances:
Average balance outstanding during the year $ 114,020 $ 77,049 $ 77,729
Maximum amount outstanding at any month‑end during the year $ 121,500 $ 84,000 $ 98,000
Balance outstanding at end of year $ 110,500 $ 84,000 $ 70,000
Weighted average interest rate at end of year 1.94 % 2.32 % 2.51 %
Average cost of advances during the year 1.94 % 2.42 % 2.13 %
Weighted average maturity (in months) 27 18 24

On March 17, 2004, we issued $6.0 million of Floating Rate Junior Subordinated Debentures (the “Debentures”) in a private placement to a trust that was capitalized to purchase subordinated debt and preferred stock of multiple community banks. Interest on the Debentures is payable quarterly at a rate per annum equal to the 3‑Month LIBOR plus 2.54%. The interest rate is determined as of each March 17, June 17, September 17, and December 17, and was 2.77% at December 31, 2020. On October 16, 2014, we made payments of $900 thousand of principal on the Debentures, executed a Supplemental Indenture for the Debentures that extended the maturity of the Debentures to March 17, 2024, and modified the payment terms of the remaining $5.1 million principal amount thereof. The modified terms of the Debentures required quarterly payments of interest only through March 2019 at the original rate of 3‑Month LIBOR plus 2.54%. Starting in June 2019, the Company is required to make quarterly payments of equal amounts of principal, plus interest, until the Debentures are fully amortized on March 17, 2024. During 2020, the Company paid $1.8 million of scheduled principal.  The Debentures may be called for redemption at any time.

14

Table of Contents

Market Area and Competition

Broadway Federal is a community‑oriented savings institution offering a variety of financial services to meet the needs of the communities it serves. Our retail banking network includes full service banking offices, automated teller machines and internet banking capabilities that are available using our website at www.broadwayfederalbank.com. We have two banking offices in Los Angeles and one banking office located in the nearby City of Inglewood as of December 31, 2020.  As previously announced, the Bank plans to close one of the two banking offices in Los Angles in April 2021.

The Los Angeles metropolitan area is a highly competitive banking market for making loans and attracting deposits. Although our offices are primarily located in low‑to‑moderate income communities that have historically been under‑served by other financial institutions, we face significant competition for deposits and loans in our immediate market areas, including direct competition from mortgage banking companies, commercial banks and savings and loan associations. Most of these financial institutions are significantly larger than we are and have greater financial resources, and many have a regional, statewide or national presence.

Personnel

At December 31, 2020, we had 64 employees, which included 62 full‑time and 2 part‑time employees. We believe that we have good relations with our employees, and none are represented by a collective bargaining group.

Regulation

General

Broadway Federal Bank, f.s.b, is regulated by the OCC, as its primary federal regulator, and by the FDIC, as its deposit insurer. The Bank is also a member of the Federal Home Loan Bank System and is subject to the regulations of the FRB concerning reserves required to be maintained against deposits, transactions with affiliates, Truth in Lending and other consumer protection requirements and certain other matters. Broadway Financial Corporation is regulated, examined and supervised by the FRB and is also required to file certain reports and otherwise comply with the rules and regulations of the Securities and Exchange Commission (“SEC”) under the federal securities laws.

The OCC regulates and examines most of our Bank’s business activities, including, among other things, capital standards, general investment authority, deposit taking and borrowing authority, mergers and other business combination transactions, establishment of branch offices, and permitted subsidiary investments and activities. The OCC has primary enforcement responsibility over federal savings banks and has substantial discretion to impose enforcement actions on an institution that fails to comply with applicable regulatory requirements, including with respect to capital requirements. In addition, the FDIC has the authority to recommend to the OCC that enforcement actions be taken with respect to a particular federal savings bank and, if recommended action is not taken by the OCC, the FDIC has authority to take such action under certain circumstances. In certain cases, the OCC has the authority to refer matters relating to federal fair lending laws to the U.S. Department of Justice (“DOJ”) or the U.S. Department of Housing and Urban Development (“HUD”) if the OCC determines violations of the fair lending laws may have occurred.

Changes in applicable laws or the regulations of the OCC, the FDIC, the FRB or other regulatory authorities, or changes in interpretations of such regulations or in agency policies or priorities, could have a material adverse impact on the Bank and the Company, their operations, and the value of the Company’s debt and equity securities. The Company and its stock are also subject to rules issued by The Nasdaq Stock Market LLC (“Nasdaq”), the stock exchange on which the Company’s common stock is traded. Failure of the Company to conform to Nasdaq’s rules could have an adverse impact on the Company and the value of the Company’s equity securities.

The following paragraphs summarize certain laws and regulations that apply to the Company and the Bank. These descriptions of statutes and regulations and their possible effects do not purport to be complete descriptions of all the provisions of those statutes and regulations and their possible effects on us, nor do they purport to identify every statute and regulation that applies to us.

15

Table of Contents

Dodd‑Frank Wall Street Reform and Consumer Protection Act

In July 2010, the Dodd‑Frank Wall Street Reform and Consumer Protection Act (the “Dodd‑Frank Act”) was signed into law. The Dodd‑Frank Act is intended to address perceived weaknesses in the U.S. financial regulatory system and prevent future economic and financial crises.

The Dodd‑Frank Act established increased compliance obligations across a number of areas in the banking business and, among other changes, required the federal banking agencies to establish consolidated risk‑based and leverage capital requirements for insured depository institutions, depository institution holding companies and certain non‑bank financial companies. Under an existing FRB policy statement, bank holding companies with less than $500 million in total consolidated assets were not subject to consolidated capital requirements. In guidance effective as of May 15, 2015, the FRB formally applied the policy statement to savings and loan holding companies, such as the Company, and raised the applicable asset threshold to $1 billion. The Dodd‑Frank Act requires savings and loan holding companies to serve as a source of financial strength for any subsidiary of the holding company that is a depository institution by providing financial assistance in the event of the financial distress of the depository institution.

The Dodd‑Frank Act also included provisions changing the assessment base for federal deposit insurance from the amount of insured deposits to the amount of consolidated assets less tangible capital, and making permanent the $250,000 limit for federal deposit insurance that had initially been established on a temporary basis in reaction to the economic downturn in 2008.

The Dodd‑Frank Act also established the Consumer Financial Protection Bureau (“CFPB”). The CFPB has authority to supervise compliance with and enforce consumer protection laws. The CFPB has broad rule‑making authority for a wide range of consumer protection laws that apply to banks and savings institutions of all sizes, including the authority to prohibit “unfair, deceptive or abusive” acts and practices. Over the past several years, the CFPB has been active in bringing enforcement actions against banks and nonbank financial institutions to enforce federal consumer financial laws and has developed a number of new enforcement theories and applications of these laws. The CFPB’s supervisory authority does not generally extend to insured depository institutions having less than $10 billion in assets. The other federal financial regulatory agencies, however, as well as state attorneys general and state banking agencies and other state financial regulators, have been active in this area with respect to institutions over which they have jurisdiction.

Capital Requirements

In July 2013, the federal banking regulators approved final rules (the “Basel III Capital Rules”) implementing the Basel III framework as well as certain provisions of the Dodd‑Frank Act. The Basel III Capital Rules substantially revised the risk‑based capital requirements applicable to depository institutions including Broadway Federal. As stated above, the Company is a small savings and loan holding company that will be exempt from consolidated capital requirements until its assets exceed $1.0 billion.

The Basel III Capital Rules, among other things, (i) introduce a new capital measure called “Common Equity Tier 1” (“CET1”), (ii) specify that Tier 1 capital consists of CET1 and “Additional Tier 1 capital” instruments meeting certain revised requirements, (iii) define CET1 narrowly by requiring that most deductions and adjustments to regulatory capital measures be made to CET1 and not to the other components of capital, and (iv) expanded the scope of the deductions and adjustments to capital as compared to previously existing regulations.

Under the Basel III Capital Rules, the current minimum capital ratios effective as of January 1, 2015 are:

• 4.5% CET1 to risk‑weighted assets;
• 6.0% Tier 1 capital (calculated as CET1 plus Additional Tier 1 capital) to risk‑weighted assets;
--- ---
• 8.0% Total capital (calculated as Tier 1 capital plus Tier 2 capital) to risk‑weighted assets; and
--- ---
• 4.0% Tier 1 capital to average consolidated assets (known as the “leverage ratio”).
--- ---

16

Table of Contents

The Basel III Capital Rules also introduced a new “capital conservation buffer”, composed entirely of CET1, in addition to the minimum risk‑weighted capital to assets ratios. The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and increased by 0.625% on January 1 of each subsequent year, until it reached 2.5% on January 1, 2019. As fully phased in, the Basel III Capital Rules now require the Bank to maintain an additional capital conservation buffer of 2.5% of CET1, effectively resulting in minimum ratios of (i) CET1 to risk‑weighted assets of at least 7%, (ii) Tier 1 capital to risk‑weighted assets of at least 8.5%, (iii) a minimum ratio of Total capital to risk‑weighted assets of at least 10.5%, and (iv) a minimum leverage ratio of 4.0%. The capital conservation buffer is designed to absorb losses during periods of economic stress and effectively increases the minimum required risk‑weighted capital ratios. Banking institutions with a ratio of CET1 to risk‑weighted assets below the effective minimum (4.5% plus the capital conservation buffer) will face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall.

The Basel III Capital Rules also provide for several deductions from and adjustments to CET1. These include, for example, the requirement that certain deferred tax assets and significant investments in non‑consolidated financial entities be deducted from CET1 to the extent that any one such category exceeds 10% of CET1 or all such items, in the aggregate, exceed 15% of CET1.

In addition, under the Basel III Capital Rules, the effects of certain accumulated other comprehensive income items are not excluded automatically; however, Broadway Federal qualified to make a one‑time permanent election to continue to exclude these items. It made this election to avoid significant variations in the level of its capital that might otherwise occur as a result of the impact of interest rate fluctuations on the fair value of its available‑for‑sale securities portfolio.

The Basel III Capital Rules prescribe a standardized approach for risk weightings that expanded both the number of risk‑weighting categories and the risk sensitivity of many categories. The risk weights assigned to a particular category of assets depend on the nature of the assets and range from 0% for U.S. government and agency securities to 600% for certain equity exposures. On balance, the new standards result in higher risk weights for a number of asset categories.

Prompt Corrective Action

The Federal Deposit Insurance Act, as amended (“FDIA”), requires the federal banking agencies to take “prompt corrective action” with respect to depository institutions that do not meet minimum capital requirements. The OCC performs this function with respect to the Bank. The FDIA includes the following five capital tiers: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” and “critically undercapitalized.”

Generally, a capital restoration plan must be filed with the OCC within 45 days after the date a depository institution receives notice that it is “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized,” and the plan must be guaranteed by any parent holding company. In addition, various mandatory supervisory actions become immediately applicable to the institution, including restrictions on growth of assets and other forms of expansion.

The Basel III Capital Rules included revisions to the prompt corrective action framework. Under the prompt corrective action requirements, insured depository institutions are now required to meet the following increased capital level requirements in order to qualify as “well capitalized:” (i) a new CET1 capital to risk weighted assets of 6.5%; (ii) a Tier 1 capital to risk weighted assets of 8% (increased from 6%); (iii) a total capital to risk weighted assets of 10% (unchanged from previous rules); and (iv) a Tier 1 leverage ratio of 5% (unchanged from previous rules).

17

Table of Contents

At December 31, 2020, the Bank’s level of capital exceeded all regulatory capital requirements and its regulatory capital ratios were above the minimum levels required to be considered well capitalized for regulatory purposes. Actual and required capital amounts and ratios at December 31, 2020 and 2019 are presented below.

Actual Minimum Capital<br><br> <br>Requirements Minimum Required<br><br> <br>To Be Well<br><br> <br>Capitalized Under<br><br> <br>Prompt Corrective<br><br> <br>Action Provisions
Amount Ratio Amount Ratio Amount Ratio
(Dollars in thousands)
December 31, 2020:
Tier 1 (Leverage) $ 46,565 9.54 % $ 19,530 4.00 % $ 24,413 5.00 %
Common Equity Tier 1 $ 46,565 18.95 % $ 11,059 4.50 % $ 15,975 6.50 %
Tier 1 $ 46,565 18.95 % $ 14,746 6.00 % $ 19,661 8.00 %
Total Capital $ 49,802 20.20 % $ 19,661 8.00 % $ 24,577 10.00 %
December 31, 2019:
Tier 1 (Leverage) $ 48,541 11.56 % $ 16,798 4.00 % $ 20,997 5.00 %
Common Equity Tier 1 $ 48,541 17.14 % $ 12,743 4.50 % $ 18,406 6.50 %
Tier 1 $ 48,541 17.14 % $ 16,990 6.00 % $ 22,654 8.00 %
Total Capital $ 51,790 18.29 % $ 22,654 8.00 % $ 28,318 10.00 %

Deposit Insurance

The FDIC is an independent federal agency that insures deposits of federally insured banks, including federal savings banks, up to prescribed statutory limits for each depositor. Pursuant to the Dodd‑Frank Act, the maximum deposit insurance amount has been permanently increased to $250,000 per depositor, per ownership category.

The FDIC charges an annual assessment for the insurance of deposits based on the risk a particular institution poses to the FDIC’s Deposit Insurance Fund (“DIF”). The Bank’s DIF assessment is calculated by multiplying its assessment rate by the assessment base, which is defined as the average consolidated total assets less the average tangible equity of the Bank. The initial base assessment rate is based on an institution’s capital level, and capital adequacy, asset quality, management, earnings, liquidity and sensitivity (“CAMELS”) ratings, certain financial measures to assess an institution’s ability to withstand asset related stress and funding related stress, and in some cases, additional discretionary adjustments by the FDIC to reflect additional risk factors.

The FDIC’s overall premium rate structure is subject to change from time to time to reflect its actual and anticipated loss experience. The financial crisis that began in 2008 resulted in substantially higher levels of bank failures than had occurred in the immediately preceding years. These failures dramatically increased the resolution costs incurred by the FDIC and substantially reduced the available amount of the DIF.

As required by the Dodd‑Frank Act, the FDIC adopted a new DIF restoration plan which became effective on January 1, 2011. Among other things, the plan increased the minimum designated DIF reserve ratio from 1.15% to 1.35% of insured deposits, which must be reached by September 30, 2020, and provides that in setting the assessments necessary to meet the new requirement, the FDIC is required to offset the effect of this provision on insured depository institutions with total consolidated assets of less than $10 billion, so that more of the cost of raising the reserve ratio will be borne by institutions with more than $10 billion in assets. With the increase of the DIF reserve ratio to 1.17% on June 30, 2016, the range of initial assessment rates has declined for all banks from five to 35 basis points on an annualized basis to three to 30 basis points on an annualized basis. In order to reach a DIF reserve ratio of 1.35%, insured depository institutions with $10 billion or more in total assets are required to pay a quarterly surcharge equal to an annual rate of 4.5 basis points, in addition to regular assessments. The FDIC will impose a shortfall in the first quarter of 2020 on large banks that did not have a reserve of at least 1.35% by December 31, 2019. The FDIC will provide assessment credits to insured depository institutions, like Broadway Federal, with total consolidated assets of less than $10 billion for the portion of their regular assessments that contribute to growth in the reserve ratio between 1.15% and 1.35%. The FDIC will apply the credits each quarter that the reserve ratio is at least 1.38% to offset the regular deposit insurance assessments of institutions with credits.  During 2020, the Bank received two assessment credits totaling $49 thousand compared to two assessment credits totaling $56 thousand during 2019.

18

Table of Contents

The FDIC may terminate a depository institution’s deposit insurance upon a finding that the institution’s financial condition is unsafe or unsound or that the institution has engaged in unsafe or unsound practices that pose a risk to the DIF or that may prejudice the interest of the bank’s depositors.

Guidance on Commercial Real Estate Lending

In December 2015, the federal banking agencies released a statement titled “Statement on Prudent Risk Management for Commercial Real Estate Lending” (the “CRE Statement”). The CRE Statement expresses the banking agencies’ concerns with banking institutions that ease their commercial real estate underwriting standards, directs financial institutions to maintain underwriting discipline and exercise risk management practices to identify, measure and monitor lending risks, and indicates that the agencies will continue to pay special attention to commercial real estate lending activities and concentrations going forward. The banking agencies previously issued guidance titled “Prudent Commercial Real Estate Loan Workouts” which provides guidance for financial institutions that are working with commercial real estate (“CRE”) borrowers who are experiencing diminished operating cash flows, depreciated collateral values, or prolonged delays in selling or renting commercial properties and details risk‑management practices for loan workouts that support prudent and pragmatic credit and business decision‑making within the framework of financial accuracy, transparency, and timely loss recognition. The banking agencies had also issued previous guidance titled “Interagency Guidance on Concentrations in Commercial Real Estate” stating that a banking institution will be considered to be potentially exposed to significant CRE concentration risk, and should employ enhanced risk management practices, if total CRE loans represent 300% or more of its total capital and the outstanding balance of the institution’s CRE loan portfolio has increased by 50% or more during the preceding 36 months.

In October 2009, the federal banking agencies adopted a policy statement supporting workouts of CRE loans, which is referred to as the “CRE Policy Statement”. The CRE Policy Statement provides guidance for examiners, and for financial institutions that are working with CRE borrowers who are experiencing diminished operating cash flows, depreciated collateral values, or prolonged delays in selling or renting commercial properties. The CRE Policy Statement details risk‑management practices for loan workouts that support prudent and pragmatic credit and business decision‑making within the framework of financial accuracy, transparency, and timely loss recognition. The CRE Policy Statement states that financial institutions that implement prudent loan workout arrangements after performing comprehensive reviews of the financial condition of borrowers will not be subject to criticism for engaging in these efforts, even if the restructured loans have weaknesses that result in adverse credit classifications. In addition, performing loans, including those renewed or restructured on reasonable modified terms, made to creditworthy borrowers, will not be subject to adverse classification solely because the value of the underlying collateral declined. The CRE Policy Statement reiterates existing guidance that examiners are expected to take a balanced approach in assessing an institution’s risk‑management practices for loan workout activities.

In October 2018, the OCC provided the Bank with a letter of “no supervisory objection” permitting the Bank to increase the non‑multifamily commercial real estate loan concentration limit to 100% of Tier 1 Capital plus ALLL, including a sublimit of 50% for land/construction loans, which brought the total CRE loan concentration limit to 600% of Tier 1 Capital plus ALLL.

Loans to One Borrower

Federal savings banks generally are subject to the lending limits that are applicable to national banks. With certain limited exceptions, the maximum amount that a federal savings banks may lend to any borrower (including certain related persons or entities of such borrower) is an amount equal to 15% of the savings institution’s unimpaired capital and unimpaired surplus, or $7.4 million for Broadway Federal at December 31, 2020, plus an additional 10% for loans fully secured by readily marketable collateral. Real estate is not included within the definition of “readily marketable collateral” for this purpose. We are in compliance with the limits applicable to loans to any one borrower. At December 31, 2020, our largest amount of loan to one borrower was $6.9 million, and the loan was performing in accordance with their terms and the borrower had no affiliation with Broadway Federal.

Community Reinvestment Act and Fair Lending

The Community Reinvestment Act, as implemented by OCC regulations (“CRA”), requires each federal savings bank, as well as other lenders, to make efforts to meet the credit needs of the communities they serve, including low‑ and moderate‑income neighborhoods. The CRA requires the OCC to assess an institution’s performance in meeting the credit needs of its communities as part of its examination of the institution, and to take such assessments into consideration in reviewing applications for mergers, acquisitions and other transactions. An unsatisfactory CRA rating may be the basis for denying an application. Community groups have successfully protested applications on CRA grounds. In connection with the assessment of a savings institution’s CRA performance, the OCC assigns ratings of “outstanding,” “satisfactory,” “needs to improve” or “substantial noncompliance.” The Bank’s CRA performance has been rated by OCC as “outstanding” since 1995, and the Bank’s “outstanding” rating was recently reaffirmed by OCC in its most recent CRA examination completed in April 2019.

19

Table of Contents

The Bank is also subject to federal fair lending laws, including the Equal Credit Opportunity Act (“ECOA”) and the Federal Housing Act (“FHA”), which prohibit discrimination in credit and residential real estate transactions on prohibited bases, including race, color, national origin, gender, and religion, among others. A lender may be liable under one or both acts in the event of overt discrimination, disparate treatment, or a disparate impact on a prohibited basis. The compliance of federal savings banks of the Bank’s size with these acts is primarily supervised and enforced by the OCC. If the OCC determines that a lender has engaged in a pattern or practice of discrimination in violation of ECOA, the OCC refers the matter to the DOJ. Similarly, HUD is notified of violations of the FHA.

Qualified Thrift Lender Test

The Home Owners Loan Act (“HOLA”) requires all federal savings banks to meet a Qualified Thrift Lender (“QTL”) test. Under the QTL test, a federal savings bank is required to maintain at least 65% of its portfolio assets (total assets less (i) specified liquid assets up to 20% of total assets, (ii) intangibles, including goodwill, and (iii) the value of property used to conduct business) in certain “qualified thrift investments” on a monthly basis during at least 9 out of every 12 months. Qualified thrift investments include, in general, loans, securities and other investments that are related to housing, shares of stock issued by any Federal Home Loan Bank, loans for educational purposes, loans to small businesses, loans made through credit cards or credit card accounts and certain other permitted thrift investments. The failure of a federal savings bank to remain a QTL may result in required conversion of the institution to a bank charter, which would change the federal savings bank’s permitted business activities in various respects, including operation under certain restrictions, such as limitations on new investments and activities, the imposition of restrictions on branching and the payment of dividends that apply to national banks. At December 31, 2020, the Bank was in compliance with the QTL test requirements.

The USA Patriot Act, Bank Secrecy Act (“BSA”), and Anti‑Money Laundering (“AML”) Requirements

The USA PATRIOT Act was enacted after September 11, 2001 to provide the federal government with powers to prevent, detect, and prosecute terrorism and international money laundering, and has resulted in the promulgation of several regulations that have a direct impact on savings associations. Financial institutions must have a number of programs in place to comply with this law, including: (i) a program to manage BSA/AML risk; (ii) a customer identification program designed to determine the true identity of customers, document and verify the information, and determine whether the customer appears on any federal government list of known or suspected terrorists or terrorist organizations; and (iii) a program for monitoring for the timely detection and reporting of suspicious activity and reportable transactions. Failure to comply with these requirements may result in regulatory action, including the issuance of cease and desist orders, impositions of civil money penalties and adverse changes in an institution’s regulatory ratings, which could adversely affect its ability to obtain regulatory approvals for business combinations or other desired business objectives.

Privacy Protection

Broadway Federal is subject to OCC regulations implementing the privacy protection provisions of federal law. These regulations require Broadway Federal to disclose its privacy policy, including identifying with whom it shares “nonpublic personal information,” to customers at the time of establishing the customer relationship and annually thereafter. The regulations also require Broadway Federal to provide its customers with initial and annual notices that accurately reflect its privacy policies and practices. In addition, to the extent its sharing of such information is not covered by an exception, Broadway Federal is required to provide its customers with the ability to “opt‑out” of having Broadway Federal share their nonpublic personal information with unaffiliated third parties.

Broadway Federal is also subject to regulatory guidelines establishing standards for safeguarding customer information. The guidelines describe the agencies’ expectations for the creation, implementation and maintenance of an information security program, which would include administrative, technical and physical safeguards appropriate to the size and complexity of the institution and the nature and scope of its activities. The standards set forth in the guidelines are intended to ensure the security and confidentiality of customer records and information, protect against any anticipated threats or hazards to the security or integrity of such records and protect against unauthorized access to or use of such records or information that could result in substantial harm or inconvenience to any customer.

20

Table of Contents

Cybersecurity

In the ordinary course of business, we rely on electronic communications and information systems to conduct our operations and to store sensitive data. We employ an in‑depth, layered, defensive approach that leverages people, processes and technology to manage and maintain cybersecurity controls. We employ a variety of preventative and detective tools to monitor, block, and provide alerts regarding suspicious activity, as well as to report on any suspected persistent threats. Notwithstanding the strength of our defensive measures, the threat from cybersecurity attacks is severe, attacks are sophisticated and increasing in volume, and attackers respond rapidly to changes in defensive measures. While to date we have not experienced a significant compromise, significant data loss or any material financial losses related to cybersecurity attacks, our systems and those of our customers and third‑party service providers are under constant threat and it is possible that we could experience a significant event in the future.

The federal banking agencies have adopted guidelines for establishing information security standards and cybersecurity programs for implementing safeguards under the supervision of a banking organization’s the board of directors. These guidelines, along with related regulatory materials, increasingly focus on risk management, processes related to information technology and operational resiliency, and the use of third parties in the provision of financial services.

Risks and exposures related to cybersecurity attacks are expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, as well as due to the expanding use of internet banking, mobile banking and other technology‑based products and services by us and our customers.

Savings and Loan Holding Company Regulation

As a savings and loan holding company, we are subject to the supervision, regulation, and examination of the FRB. In addition, the FRB has enforcement authority over the Company and our subsidiary Broadway Federal. Applicable statutes and regulations administered by FRB place certain restrictions on our activities and investments. Among other things, we are generally prohibited, either directly or indirectly, from acquiring more than 5% of the voting shares of any savings association or savings and loan holding company that is not a subsidiary of the Company.

The Change in Bank Control Act prohibits a person, acting directly or indirectly or in concert with one or more persons, from acquiring control of a savings and loan holding company unless the FRB has been given 60 days prior written notice of such proposed acquisition and within that time period the FRB has not issued a notice disapproving the proposed acquisition or extending for up to another 30 days the period during which a disapproval may be issued. The term “control” is defined for this purpose to include ownership or control of, or holding with power to vote, 25% or more of any class of a savings and loan holding company’s voting securities. Under a rebuttable presumption contained in the regulations of the FRB, ownership or control of, or holding with power to vote, 10% or more of any class of voting securities of a savings and loan holding company will be deemed control for purposes of the Change in Bank Control Act if the institution (i) has registered securities under Section 12 of the Exchange Act, or (ii) no person will own, control, or have the power to vote a greater percentage of that class of voting securities immediately after the transaction. In addition, any company acting directly or indirectly or in concert with one or more persons or through one or more subsidiaries would be required to obtain the approval of the FRB under the Home Owners’ Loan Act before acquiring control of a savings and loan holding company. For this purpose, a company is deemed to have control of a savings and loan holding company if the company (i) owns, controls, holds with power to vote, or holds proxies representing, 25% or more of any class of voting shares of the holding company, (ii) contributes more than 25% of the holding company’s capital, (iii) controls in any manner the election of a majority of the holding company’s directors, or (iv) directly or indirectly exercises a controlling influence over the management or policies of the savings bank or other company. The FRB may also determine, based on the relevant facts and circumstances, that a company has otherwise acquired control of a savings and loan holding company.

Restrictions on Dividends and Other Capital Distributions

In general, the prompt corrective action regulations prohibit a federal savings bank from declaring any dividends, making any other capital distribution, or paying a management fee to a controlling person, such as its parent holding company, if, following the distribution or payment, the institution would be within any of the three undercapitalized categories. In addition to the prompt corrective action restriction on paying dividends, OCC regulations limit certain “capital distributions” by savings associations. Capital distributions are defined to include, among other things, dividends and payments for stock repurchases and payments of cash to stockholders in mergers.

Under the OCC capital distribution regulations, a federal savings bank that is a subsidiary of a savings and loan holding company must notify the OCC at least 30 days prior to the declaration of any capital distribution by its federal savings bank subsidiary. The 30‑day period provides the OCC an opportunity to object to the proposed dividend if it believes that the dividend would not be advisable.

21

Table of Contents

An application to the OCC for approval to pay a dividend is required if: (i) the total of all capital distributions made during that calendar year (including the proposed distribution) exceeds the sum of the institution’s year‑to‑date net income and its retained income for the preceding two years; (ii) the institution is not entitled under OCC regulations to “expedited treatment” (which is generally available to institutions the OCC regards as well run and adequately capitalized); (iii) the institution would not be at least “adequately capitalized” following the proposed capital distribution; or (iv) the distribution would violate an applicable statute, regulation, agreement, or condition imposed on the institution by the OCC.

The Bank’s ability to pay dividends to the Company is also subject to a restriction on the payment of dividends by the Bank to the Company if the Bank’s regulatory capital would be reduced below the amount required for the liquidation account established in connection with the conversion of the Bank from the mutual to the stock form of organization.

See Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” and Note 14 of the Notes to Consolidated Financial Statements for a further description of dividend and other capital distribution limitations to which the Company and the Bank are subject.

Tax Matters

Federal Income Taxes

We report our income on a calendar year basis using the accrual method of accounting and are subject to federal income taxation in the same manner as other corporations. See Note 13 of the Notes to Consolidated Financial Statements for a further description of tax matters applicable to our business.

California Taxes

As a savings and loan holding company filing California franchise tax returns on a combined basis with its subsidiaries, the Company is subject to California franchise tax at the rate applicable to “financial corporations.” The applicable statutory tax rate is 10.84%.

ITEM 2. PROPERTIES

We conduct our business through three branch offices and a corporate office. Our loan service operation is also conducted from one of our branch offices. Our administrative and corporate operations are conducted from our corporate facility located at 5055 Wilshire Boulevard, Suite 500, Los Angeles. There are no mortgages, material liens or encumbrances against any of our owned properties. We believe that all the properties are adequately covered by insurance, and that our facilities are adequate to meet our present needs.

As of December 31, 2020, the net book value of our investment in premises, equipment and fixtures, excluding computer equipment, was $2.5 million. Total occupancy expense, inclusive of rental payments and furniture and equipment expense, for the year ended December 31, 2020 was $1.3 million. Total annual rental expense (exclusive of operating charges and real property taxes) was approximately $598 thousand during 2020.

Location Leased or<br><br> <br>Owned Original<br><br> <br>Date<br><br> <br>Leased or<br><br> <br>Acquired Date<br><br> <br>of Lease<br><br> <br>Expiration
Administrative/Loan Origination Center:<br><br> <br>5055 Wilshire Blvd, Suite 500<br><br> <br>Los Angeles, CA Leased 2013 Sep. 2021
Branch Offices:<br><br> <br>5055 Wilshire Blvd, Suite 100<br><br> <br>Los Angeles, CA Leased 2013 May 2021
170 N. Market Street<br><br> <br>Inglewood, CA<br><br> <br>(Branch Office/Loan Service Center) Owned 1996 ‑
4001 South Figueroa Street<br><br> <br>Los Angeles, CA Owned 1996 ‑

22

Table of Contents
ITEM 3. LEGAL PROCEEDINGS
--- ---

Between February 3, 2021 and March 1, 2021, eight purported holders of the Company’s common stock filed the following complaints against the Company and the members of its board of directors (collectively, the “Stockholder Complaints”): (i) Chris Pinkney v. Broadway Financial Corporation, et al., filed on February 3, 2021 in the in the United States District Court for the Southern District of New York, No. 1:21-cv-00945; (ii) Jose Lopez v. Broadway Financial Corporation, et al., filed on February 5, 2021 in the United States District Court for the District of Delaware, No. 1:21-cv-00157; (iii) Jamal Howard v. Broadway Financial Corporation, et al., filed on February 10, 2021 in the United States District Court for the Eastern District of New York, No. 1:21-cv-00706; (iv) Rose Stovall v. Broadway Financial Corporation, et al., filed on February 11, 2021 in the United States District Court for the Southern District of New York, No. 1:21-cv-01238; (v) Sally Nahra v. Broadway Financial Corporation, et al., filed on February 18, 2021 in the United States District Court for the Southern District of New York, No. 1:21-cv-01459; (vi) Jordan Rosenblatt v. Broadway Financial Corporation, et al., filed on February 25, 2021 in the United States District Court for the Central District of California, No. 2:21-cv-079001790; (vii) Patrick Plumley v. Broadway Financial Corporation, et al., filed on February 25, 2021 in the United States District Court for the District of Delaware, No. 1:21-cv-00290; and (viii) Derek Mueller v. Broadway Financial Corporation, et al., filed on March 1, 2021 in the United States District Court for the Eastern District of Pennsylvania, No. 1:21-cv-00975.

The Stockholder Complaints assert, among others, claims under Section 14(a) of the Exchange Act against the Company and the members of its board of directors and claims under Section 20(a) of the Exchange Act against the members of the board of directors for allegedly causing a materially incomplete and misleading registration statement on Form S-4 or prospectus on Form 424B3 (collectively, the “Offering Materials”) to be filed with the SEC and challenging the adequacy of certain disclosures made therein. The Lopez and Mueller complaints also include CFBanc in their allegations under Section 20(a) of the Exchange Act, and the Nahra complaint also includes a count against the members of the Company’s board of directors for breach of fiduciary duty. Additionally, the Pinkney complaint asserts that the merger consideration is unfair and that the termination fee agreed by the Company and CFBanc to be payable in the event of termination of the merger agreement in certain circumstances is excessive. Among other remedies, the Stockholder Complaints sought primarily to enjoin the merger and require dissemination of revised Offering Materials. Since none of the plaintiffs moved for preliminary injunction and the merger has received stockholder approval, these requests are now moot. The Stockholder Complaints also state that the plaintiffs seek, in the event the merger is consummated, a rescission of the merger or an award of rescissory or other damages in an unspecified amount, and attorneys’ fees and costs.

The Company believes that the claims in the Stockholder Complaints are without merit and intends to defend against them vigorously.

In the ordinary course of business, we are defendants in various litigation matters from time to time. In our opinion, the disposition of any litigation and other legal and regulatory matters currently pending or threatened against us would not have a material adverse effect on our financial position, results of operations or cash flows.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

23

Table of Contents

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is traded on the Nasdaq Capital Market under the symbol “BYFC.” The table below shows the high and low sale prices for our common stock during the periods indicated.

2020 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
High $ 1.59 $ 3.31 $ 3.32 $ 1.94
Low $ 1.14 $ 1.14 $ 1.44 $ 1.61
2019 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
--- --- --- --- --- --- --- --- ---
High $ 1.50 $ 1.47 $ 2.00 $ 1.76
Low $ 1.13 $ 1.21 $ 1.42 $ 1.42

The closing sale price for our common stock on the Nasdaq Capital Market on March 17, 2021 was $3.30 per share. As of March 17, 2021, we had 284 stockholders of record and 19,142,498 shares of voting common stock outstanding. At that date, we also had 8,756,396 shares of non‑voting common stock outstanding. Our non‑voting common stock is not listed for trading on the Nasdaq Capital Market, but is convertible into our voting common stock in connection with certain sale or other transfer transactions.

In general, we may pay dividends out of funds legally available for that purpose at such times as our Board of Directors determines that dividend payments are appropriate, after considering our net income, capital requirements, financial condition, alternate investment options, prevailing economic conditions, industry practices and other factors deemed to be relevant at the time. We suspended our prior policy of paying regular cash dividends in May 2010 in order to retain capital for reinvestment in the Company’s business.

Our financial ability to pay permitted dividends is primarily dependent upon receipt of dividends from Broadway Federal. Broadway Federal is subject to certain requirements which may limit its ability to pay dividends or make other capital distributions. See Item 1 “Business – Regulation” and Note 15 of the Notes to Consolidated Financial Statements in Item 8 “Financial Statements and Supplementary Data” for an explanation of the impact of regulatory capital requirements on Broadway Federal’s ability to pay dividends.

Equity Compensation Plan Information

The following table provides information about the Company’s common stock that may be issued under equity compensation plans as of December 31, 2020.

Plan category Number of<br><br> <br>securities to be<br><br> <br>issued upon exercise<br><br> <br>of outstanding<br><br> <br>options<br><br> <br>(a) Weighted average<br><br> <br>exercise price of<br><br> <br>outstanding options<br><br> <br>(b) Number of securities<br><br> <br>remaining available for<br><br> <br>future issuance under<br><br> <br>equity compensation<br><br> <br>plans (excluding<br><br> <br>securities reflected<br><br> <br>in column (a))<br><br> <br>(c)
Equity compensation plans approved by security holders:
2008 Long Term Incentive Plan 450,000 $ 1.62 ‑
2018 Long Term Incentive Plan ‑ ‑ 663,842
Equity compensation plans not approved by security holders:
None ‑ ‑ ‑
Total 450,000 $ 1.62 663,842

In February 2020 and January 2019, the Company awarded 30,930 and 42,168 shares of common stock, respectively, to its directors under the 2018 LTIP, which are fully vested.  The Company recorded $45 thousand and $52 thousand of compensation expense for the quarters ended March 31, 2020 and March 31, 2019, respectively, based on the fair value of the stock, which was determined using the average of the high and the low price of the stock on the date of the award.

24

Table of Contents

In February 2020 and 2019, the Company awarded 140,218 shares and 428,797 shares, of which 12,033 shares were forfeited as of December 31, 2020, respectively, of restricted stock to its officers and employees under the 2018 LTIP.  Each restricted stock award is valued based on the fair value of the stock, which was determined using the average of the high and the low price of the stock on the date of the award.  These awarded shares of restricted stock are fully vested over a two-year period from their respective dates of grants. Stock based compensation expense is recognized on a straight-line basis over the vesting period.  During the years ended December 31, 2020 and 2019, the Company recorded $340 thousand and $216 thousand of stock based compensation expense related to these awards, respectively.  As of December 31, 2020, the unrecognized compensation cost related to non-vested restricted stock awards was $154 thousand which is expected to be recognized over a period of 14 months.  However, 140,218 shares scheduled to vest in February 2022 will become fully vested upon the closing of the City First Merger, which is expected to occur on April 1, 2021.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and other factors that have affected our reported results of operations and financial condition or may affect our future results or financial condition. Our MD&A should be read in conjunction with the Consolidated Financial Statements and related Notes included in Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10 K.

Overview

Total assets increased by $43.0 million to $483.4 million at December 31, 2020 from $440.4 million at December 31, 2019.  The growth in total assets was primarily comprised of an increase of $80.5 million in interest-bearing cash in other banks offset by a decrease of $37.7 million in net loans receivable held for investment.  The Bank had no REO as of December 31, 2019.

Total liabilities increased by $43.0 million to $434.5 million at December 31, 2020 from $391.5 million at December 31, 2019. The increase in total liabilities during 2020 resulted primarily from increases of $26.5 million in FHLB advances and $17.9 million in total deposits, offset by a decrease of $1.0 million in junior subordinated debentures.

We recorded a net loss of $642 thousand for the year ended December 31, 2020 compared to a net loss of $206 thousand for the year ended December 31, 2019. The loss during the year ended December 31, 2020 was primarily due to an increase in professional service fees of $1.2 million, of which $960 thousand pertained to expenses related to the City First Merger and $243 thousand related to costs incurred to respond to actions by a former stockholder. In addition, compensation expense increased by $1.0 million compared to the same period of 2019 primarily due to $580 thousand accrued for bonuses to key employees .  These items were partially offset by higher net interest income before loan loss provision of $1.7 million compared to the same period of 2019 due to growth in the average loan portfolio, and decreases in the cost of funds.  In addition, an income tax credit adjustment of $273 thousand was received during 2020 due to a tax settlement with the California Franchise Tax Board, which offset the additional tax expense associated with non-deductible merger costs.

The following table summarizes the return on average assets, the return on average equity and the average equity to average assets ratios for the periods indicated:

For the Year Ended
2020 2019 2018
Return on average assets (0.13 %) (0.05 %) 0.20 %
Return on average equity (1.30 %) (0.42 %) 1.71 %
Average equity to average assets 10.00 % 11.58 % 11.58 %

25

Table of Contents

Comparison of Operating Results for the Years Ended December 31, 2020 and 2019

General

Our most significant source of income is net interest income, which is the difference between our interest income and our interest expense. Generally, interest income is generated from our loans and investments (interest earning assets) and interest expense is incurred from deposits and borrowings (interest bearing liabilities). Typically, our results of operations are also affected by our provision for or loan loss provision recapture, non-interest income generated from service charges and fees on loan and deposit accounts, gains or losses on the sale of loans and REO, non-interest expenses, and income taxes.

Net Interest Income

For the year ended December 31, 2020, net interest income increased by $1.7 million to $12.2 million, from $10.5 million for the same period in 2019.

Interest and fees on loans receivable increased by $1.2 million for the year ended December 31, 2020 compared to the same period a year ago. The increase was primarily due to an increase of $43.7 million in the average balance of loans receivable, including loans held for sale, which increased interest income by $1.8 million, partially offset by a decrease of 16 basis points in loan yield, which decreased interest income by $623 thousand.  The decrease in loan yield included the impact of a decrease in interest recoveries in 2020 compared to 2019 because $209 thousand of payoffs were received in 2020 on non-accrual loans.  Those payoffs decreased the loan yield in 2020 by 6 basis points.  Interest income on loans receivable was also negatively impacted by loan sales during the year, which totaled $104.3 million.

Interest income on securities decreased by $106 thousand for the year ended December 31, 2020 compared to the prior year due to a decrease of $2.9 million in the average balance of securities, which decreased interest income by $72 thousand and a decrease of 26 basis points in the average yield on securities, which decreased interest income by $34 thousand.

Other interest income decreased by $268 thousand for the year ended December 31, 2020 compared to the prior year.  The decrease in other interest income primarily resulted from a decrease of 185 basis points in the average rate earned on interest-earnings deposits and other short-term investments, which decreased interest income by $551 thousand, offset by a net increase in the average balance of interest earning cash deposits in other banks of $29.9 million, which increased interest income by $315 thousand.  In addition, interest income earned on FHLB stock decreased by $32 thousand, primarily due to a decrease of 200 basis points in the average rate earned during the year ended December 31, 2020.

Interest expense on deposits decreased by $1.1 million for the year ended December 31, 2020 compared to the prior year, primarily due to a decrease of 51 basis points in the average cost of deposits, offset by an increase of $34.5 million in the average balance of total deposits.  The increase in deposits was primarily due to growth in NOW accounts, savings accounts and money market accounts due to large deposits from corporations and organizations that were seeking to support Broadway’s mission and position as a Minority Depository Institution.

Interest expense on borrowings increased by $202 thousand for the year ended December 31, 2020 compared to the prior year, primarily due to a net increase of $317 thousand in interest expense on FHLB advances.  The interest expense on FHLB advances increased due to an increase of $37.0 million in the average balance of FHLB advances, which increased interest expense by $740 thousand, partially offset by a decrease of 51 basis points in the average cost of FHLB advances, which decreased interest expense by $423 thousand.  The increase in interest expense on FHLB advances was offset by a decrease of $115 thousand in interest expense on the Company’s junior subordinated debentures.  The interest expense on the junior subordinated debentures decreased because the average balance of such junior subordinated debentures decreased by $983 thousand, which decreased interest expense by $44 thousand, and the average interest rate paid on the junior subordinated debentures decreased by 167 basis points, which decreased interest expense by $71 thousand.

Net interest rate margin decreased by 2 basis points to 2.52% for the year ended December 31, 2020 from 2.54% for the same period in 2019, primarily due to the lower average rates earned on interest earning cash deposits in other banks.

26

Table of Contents

Analysis of Net Interest Income

Net interest income is the difference between income on interest earning assets and the expense on interest bearing liabilities. Net interest income depends upon the relative amounts of interest earning assets and interest bearing liabilities and the interest rates earned or paid on them. The following table sets forth average balances, average yields and costs, and certain other information for the years indicated. All average balances are daily average balances. The yields set forth below include the effect of deferred loan fees, deferred origination costs, and discounts and premiums that are amortized or accreted to interest income or expense. We do not accrue interest on loans that are on non-accrual status; however, the balance of these loans is included in the total average balance, which has the effect of reducing average loan yields.

For the year ended December 31,
2020 2019 2018
(Dollars in Thousands) Average<br><br> <br>Balance Interest Average<br><br> <br>Yield/<br><br> <br>Cost Average<br><br> <br>Balance Interest Average<br><br> <br>Yield/<br><br> <br>Cost Average<br><br> <br>Balance Interest Average<br><br> <br>Yield/<br><br> <br>Cost
Assets
Interest‑earning assets:
Interest‑earning deposits and other short‑term investments $ 49,377 $ 203 0.41 % $ 19,447 $ 439 2.26 % $ 15,470 $ 294 1.90 %
Securities 10,605 253 2.39 % 13,531 359 2.65 % 16,019 413 2.58 %
Loans receivable ^(1)^ 418,952 17,016 ^(2)^4.06 % 375,206 15,845 ^(3)^4.22 % 366,453 14,279 ^(4)^3.90 %
FHLB stock 3,438 172 5.00 % 2,916 204 7.00 % 2,916 251 8.61 %
Total interest‑earning assets 482,372 $ 17,644 3.66 % 411,100 $ 16,847 4.10 % 400,858 $ 15,237 3.80 %
Non‑interest‑earning assets 10,530 10,809 10,225
Total assets $ 492,902 $ 421,909 $ 411,083
Liabilities and Stockholders’ Equity
Interest‑bearing liabilities:
Money market deposits $ 47,611 $ 340 0.71 % $ 25,297 $ 222 0.88 % $ 37,489 $ 320 0.85 %
Passbook deposits 55,985 281 0.50 % 45,548 285 0.63 % 41,975 175 0.42 %
NOW and other demand deposits 55,003 19 0.03 % 34,091 11 0.03 % 34,779 31 0.09 %
Certificate accounts 161,409 2,523 1.56 % 180,611 3,758 2.08 % 164,703 2,563 1.56 %
Total deposits 320,008 3,163 0.99 % 285,547 4,276 1.50 % 278,946 3,089 1.11 %
FHLB advances 114,020 2,179 1.91 % 77,049 1,862 2.42 % 74,729 1,590 2.13 %
Junior subordinated debentures 3,908 133 3.40 % 4,891 248 5.07 % 5,100 250 4.90 %
Total interest‑bearing liabilities 437,936 $ 5,475 1.25 % 367,487 $ 6,386 1.74 % 358,775 $ 4,929 1.37 %
Non‑interest‑bearing liabilities 5,655 5,566 4,699
Stockholders’ Equity 49,311 48,856 47,609
Total liabilities and stockholders’ equity $ 492,902 $ 421,909 $ 411,083
Net interest rate spread ^(5)^ $ 12,169 2.41 % $ 10,461 2.36 % $ 10,308 2.43 %
Net interest rate margin ^(6)^ 2.52 % 2.54 % 2.57 %
Ratio of interest‑earning assets to interest‑bearing liabilities 110.15 % 111.87 % 111.73 %
^(1)^ Amount is net of deferred loan fees, loan discounts and loans in process, and includes deferred origination costs, loan premiums and loans receivable held for sale.
^(2)^ Includes non‑accrual interest of $162 thousand, reflecting interest recoveries on non‑accrual loans that were paid off for the year ended December 31, 2020.
--- ---
^(3)^ Includes non-accrual interest of $567 thousand, reflecting interest recoveries on non-accrual loans that were paid off, and deferred cost amortization of $254 thousand for the year ended December 31, 2019.
--- ---
^(4)^ Includes non-accrual interest of $40 thousand, reflecting interest recoveries on non-accrual loans that were paid off, and deferred cost amortization of $503 thousand for the year ended December 31, 2018.
--- ---
^(5)^ Net interest rate spread represents the difference between the yield on average interest‑earning assets and the cost of average interest‑bearing liabilities.
--- ---
^(6)^ Net interest rate margin represents net interest income as a percentage of average interest‑earning assets.
--- ---

Changes in our net interest income are a function of changes in both rates and volumes of interest earning assets and interest bearing liabilities. The following table sets forth information regarding changes in our interest income and expense for the years indicated. Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) the total change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.

27

Table of Contents
Year ended December 31, 2020<br><br> <br>Compared to<br><br> <br>Year ended December 31, 2019 Year ended December 31, 2019<br><br> <br>Compared to<br><br> <br>Year ended December 31, 2018
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Increase (Decrease) in Net<br><br> <br>Interest Income Increase (Decrease) in Net<br><br> <br>Interest Income
Due to<br><br> <br>Volume Due to<br><br> <br>Rate Total Due to<br><br> <br>Volume Due to<br><br> <br>Rate Total
(In thousands)
Interest‑earning assets:
Interest‑earning deposits and other short‑term investments $ 315 $ (551 ) $ (236 ) $ 84 $ 61 $ 145
Securities (72 ) (34 ) (106 ) (66 ) 12 (54 )
Loans receivable, net 1,794 (623 ) 1,171 347 1,219 1,566
FHLB stock 33 (65 ) (32 ) - (47 ) (47 )
Total interest‑earning assets 2,070 (1,273 ) 797 365 1,245 1,610
Interest‑bearing liabilities:
Money market deposits 166 (48 ) 118 (107 ) 9 (98 )
Passbook deposits 58 (62 ) (4 ) 16 94 110
NOW and other demand deposits 7 1 8 (1 ) (19 ) (20 )
Certificate accounts (370 ) (865 ) (1,235 ) 266 929 1,195
Total deposits (139 ) (974 ) (1,113 ) 174 1,013 1,187
FHLB advances 740 (423 ) 317 51 221 272
Junior subordinated debentures (44 ) (71 ) (115 ) (10 ) 8 (2 )
Total interest‑bearing liabilities 557 (1,468 ) (911 ) 215 1,242 1,457
Change in net interest income $ 1,513 $ 195 $ 1,708 $ 150 $ 3 $ 153

28

Table of Contents

Loan Loss Provision/Recapture

During the year ended December 31, 2020, we recorded a loan loss provision of $29 thousand due to economic uncertainties related to the COVID-19 Pandemic.  In addition, we recorded loan loss recoveries of $4 thousand during the year ended December 31, 2020.  For the year ended December 31, 2019, we recorded a net loan loss provision recapture of $7 thousand, which was comprised of a loan loss provision recapture of $348 thousand in the first quarter due to payoffs of non-accrual loans, offset by loan loss provisions of $47 thousand in the third quarter and $294 thousand in the fourth quarter due to growth in the loan portfolio.  Loan loss recoveries of $260 thousand were recorded during 2019.  See “Allowance for Loan Losses” for additional information.

Non‑Interest Income

For the year ended December 31, 2020, non-interest income totaled $1.0 million compared to $1.1 million for the prior year.  The decrease of $27 thousand in non-interest income was primarily due to a decrease of $71 thousand in service charges on deposits and a decrease of $30 thousand in grant income from the U.S. Department of the Treasury’s Community Development Financial Institution (“CDFI”) Fund, offset by an increase of $72 thousand in gains generated from sales of loans during 2020 compared to 2019.

Non‑Interest Expense

For the year ended December 31, 2020, non-interest expense totaled $14.2 million, compared to $12.1 million for the same period a year ago.  The increase of $2.1 million in non-interest expense was primarily due to increases of $1.2 million in professional services expense and $1.0 million in compensation and benefits expense.

The increase of $1.2 million in professional services expense was primarily due to an increase of $863 thousand in legal fees and $317 thousand in financial advisory and consulting fees.  The increase in legal fees was comprised of $704 thousand related to the City First Merger and $243 thousand related to legal expenses incurred to respond to activities conducted by a former stockholder against the Company, offset by a decrease of $84 thousand in miscellaneous legal fees related to other matters.  Financial advisory and consulting services fees increased primarily due to $255 thousand of expenses related to the City First Merger.

The increase of $1.0 million in compensation and benefits expense was primarily due to increased bonus accruals of $580 thousand related to the City First Merger and planning for post-merger integration and the related private placements (See ITEM 1. “BUSINESS--General” for more detail), higher salary costs of $222 thousand, and increased vacation accruals of $53 thousand.  In addition, the Bank recorded lower deferred loan origination costs of $244 thousand during 2020 compared to the prior year because there were fewer loans originated for the loans receivable held for investment portfolio during 2020 compared to the prior year.

Income Taxes.

We recorded income tax benefits of $407 thousand and $345 thousand for the year ended December 31, 2020 and 2019, respectively. The increase of $62 thousand in income tax benefit was primarily due to a tax credit of $273 thousand related to the resolution of an outstanding audit issue with the California Franchise Tax Board for tax years 2009 to 2013 and a tax benefit from the increase in pretax loss during the year, partially offset by additional tax expense associated with non-deductible merger related expenses.

The deferred tax asset totaled $5.6 million at December 31, 2020 and $5.2 million at December 31, 2019. See Note 1 “Summary of Significant Accounting Policies” and Note 13 “Income Taxes” of the Notes to Consolidated Financial Statements for a further discussion of income taxes and a reconciliation of income tax at the federal statutory tax rate to actual tax expense (benefit).

Section 382 of the Internal Revenue Code imposes limitations on a corporation’s ability to utilize net operating loss carryforwards, tax credit carryovers and other income tax attributes when there is an ownership change. Generally, the rules provide that an ownership change is deemed to have occurred when the cumulative increase of each 5% or more stockholder and certain groups of stockholders treated as 5% or more stockholders, as determined under Section 382, exceeds 50% over a specified “testing” period, generally equal to three years. Section 382 applies rules regarding the treatment of new groups of stockholders treated as 5% stockholders due to issuances of stock and other equity transactions, which may cause a change of control to occur. The Company has performed an analysis of the potential impact of Section 382 and has determined that the Company did not undergo an ownership change during 2020 or 2019 and any potential limitations imposed under Section 382 do not currently apply as of December 31, 2020.  However, upon the completion of the private placements, there could be a triggering event which may result in a change of control. Based on management’s preliminary estimates, there could be limitations on our deferred tax assets that may require an impairment allowance of approximately $2.4 million.

29

Table of Contents

Comparison of Financial Condition at December 31, 2020 and 2019

Total Assets

Total assets increased by $43.0 million to $483.4 million at December 31, 2020 from $440.4 million at December 31, 2019.  The growth in total assets was primarily comprised of increases of $80.5 million in cash  and cash equivalents, offset by decreases of $37.7 million in net loans receivable held for investment.

Loans Receivable Held for Sale

The Bank had no loans held for sale as of December 31, 2020 and 2019.  During 2020, the Bank originated $118.6 million in loans held for sale, sold $104.3 million in loans held for sale, transferred $13.7 million from loans held for sale to loans held for investment, and received $637 thousand in loan repayments.  During 2019, the Bank originated $15.1 million in loans held for sale, sold $22.7 million in loans held for sale, transferred $1.5 million to loans held for sale from loans held for investment, and received $115 thousand in loan repayments.

Loans Receivable Held for Investment

Loans receivable held for investment, net of the allowance for loan losses, totaled $360.1 million at December 31, 2020, compared to $397.8 million at December 31, 2019.  During 2020, the Bank originated $134.3 million in new loans, $120.8 million of which were multi-family loans, $11.9 million of which were commercial real estate loans, $1.5 million of which construction loans, and $66 thousand of which were commercial loans. Of the multi-family loans originated in 2020, we allocated $118.6 million, or 98%, to loans held for sale and $2.2 million, or 2%, to loans held for investment.  In addition, we transferred $13.7 million to loans held for investment from loans held for sale.

During 2019, the Bank originated $114.4 million in new loans, $103.1 million of which were multi-family loans, $9.5 million of which were commercial real estate loans, $1.7 million of which were construction loans, and $49 thousand of which were commercial loans.  Of the multi-family loans originated in 2019, we allocated $87.9 million, or 85%, to loans held for investment and $15.2 million, or 15%, to loans held for sale. In addition, we transferred net loans of $1.5 million to loans held for sale from loans held for investment.

Broadway did not participate in the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) because the Bank has not historically offered SBA loans.

Allowance for Loan Losses

We record a provision for loan losses as a charge to earnings when necessary in order to maintain the ALLL at a level sufficient, in management’s judgment, to absorb probable incurred losses in the loan portfolio. At least quarterly we assess the overall quality of the loan portfolio and general economic trends in the local market. The determination of the appropriate level for the allowance is based on that review, considering such factors as historical loss experience for each type of loan, the size and composition of our loan portfolio, the levels and composition of our loan delinquencies, non‑performing loans and net loan charge‑offs, the value of underlying collateral on problem loans, regulatory policies, general economic conditions, and other factors related to the collectability of loans in the portfolio.  As of December 31, 2020, the Bank had no delinquencies, deferrals or modifications.

Our ALLL was $3.2 million or 0.88% of our gross loans receivable held for investment at December 31, 2020 compared to $3.2 million, or 0.79% of our gross loans receivable held for investment at December 31, 2019.  During the year ended December 31, 2020, we recorded a loan loss provision of $29 thousand and recorded loan loss recoveries of $4 thousand. For the year ended December 31, 2019, we recorded a net loan loss provision recapture of $7 thousand, which was comprised of a loan loss provision recapture of $348 thousand in the first quarter due to payoffs of non-accrual loans, offset by loan loss provisions of $47 thousand in the third quarter and $294 thousand in the fourth quarter due to growth in the loan portfolio.  In addition, we recorded loan loss recoveries of $260 thousand during 2019.

30

Table of Contents

As of December 31, 2020, we had no loan delinquencies compared to total loan delinquencies of $18 thousand at December 31, 2019.  Our non-performing loans (“NPLs”) consist of delinquent loans that are 90 days or more past due and other loans, including troubled debt restructurings that do not qualify for accrual status. At December 31, 2020, NPLs totaled $787 thousand compared to $424 thousand at December 31, 2019. The increase of $363 thousand in NPLs was primarily due to an addition of a church loan of $554 thousand to non-accrual status during the second quarter of 2020, offset by a sale of $123 thousand and repayments of $68 thousand.

In connection with our review of the adequacy of our ALLL, we track the amount and percentage of our NPLs that are paying currently, but nonetheless must be classified as NPL for reasons unrelated to payments, such as lack of current financial information and an insufficient period of satisfactory performance. As of December 31, 2020, all $787 thousand of NPLs were current in their payments.

When reviewing the adequacy of the ALLL, we also consider the impact of charge‑offs, including the changes and trends in loan charge‑offs. There were no loan charge‑offs during 2020 and 2019. In determining charge‑offs, we update our estimates of collateral values on NPLs by obtaining new appraisals at least every nine months. If the estimated fair value of the loan collateral less estimated selling costs is less than the recorded investment in the loan, a charge‑off for the difference is recorded to reduce the loan to its estimated fair value, less estimated selling costs. Therefore, any losses inherent in our total NPLs are recognized periodically through charge‑offs. The impact of updating these estimates of collateral value and recognizing any required charge‑offs is to increase charge‑offs and reduce the ALLL required on these loans. Due to prior charge‑offs and increases in collateral values, the average recorded investment in NPLs was only 35% of estimated fair value less estimated selling costs as of December 31, 2020.

Loan loss recoveries totaled $4 thousand during 2020 and $260 thousand during 2019. Recoveries during 2020 and 2019 primarily resulted from the payoffs of non‑accrual loans which had been previously partially charged off.

Impaired loans at December 31, 2020 were $4.7 million, compared to $5.3 million at December 31, 2019. The decrease of $611 thousand in impaired loans was primarily due to payoffs and repayments. Specific reserves for impaired loans were $141 thousand or 2.98% of the aggregate impaired loan amount at December 31, 2020 compared to $147 thousand, or 2.74% of the aggregate impaired loan amount at December 31, 2019. Excluding specific reserves for impaired loans, our coverage ratio (general allowance as a percentage of total non‑impaired loans) was 0.85% at December 31, 2020 compared to 0.76% at December 31, 2019. The increase in the coverage ratio during 2020 was primarily due to an increase in unallocated reserves due to the COVID-19 Pandemic and a decrease in the loan portfolio balance.

We believe that the ALLL is adequate to cover probable incurred losses in the loan portfolio as of December 31, 2020, but there can be no assurance that actual losses will not exceed the estimated amounts. In addition, the OCC and the FDIC periodically review the ALLL as an integral part of their examination process. These agencies may require an increase in the ALLL based on their judgments of the information available to them at the time of their examinations.

Total Liabilities

Total liabilities increased by $43.0 million to $434.5 million at December 31, 2020 from $391.5 million at December 31, 2019.  The increase in total liabilities was primarily comprised of increases of $26.5 million in FHLB advances and $17.9 million in deposits, offset by a decrease of $1.0 million in junior subordinated debentures.

Deposits

Deposits increased by $17.9 million to $315.6 million at December 31, 2020 from $297.7 million at December 31, 2019, which consisted of an increase of $79.4 million in liquid deposits and a decrease of $61.5 million in CDs.

Two customer relationships accounted for approximately 13% of our deposits at December 31, 2020. We expect to maintain this relationship with the customer for the foreseeable future.

Borrowings

Total borrowings at December 31, 2020 consisted of advances to the Bank from the FHLB of $110.5 million, and junior subordinated debentures issued by the Company of $3.3 million, compared to advances from the FHLB of $84.0 million and junior subordinated debentures of $4.3 million at December 31, 2019. During 2020, the Bank paid off $33.5 million in maturing FHLB advances, borrowed $60.0 million in new advances from the FHLB and repaid $1.0 million of its junior subordinated debentures.

31

Table of Contents

The weighted average cost of FHLB advances decreased by 48 basis points to 1.94% at December 31, 2020 from 2.42% at December 31, 2019 primarily due to lower interest rates.

Stockholders’ Equity

Stockholders’ equity was $48.9 million, or 10.11% of the Company’s total assets at December 31, 2020, compared to $48.8 million, or 11.09% of the Company’s total assets at December 31, 2019. The Company’s book value was $1.74 per share as of December 31, 2020, compared to $1.75 per share as of December 31, 2019.

Capital Resources

Our principal subsidiary, Broadway Federal, must comply with capital standards established by the OCC in the conduct of its business. Failure to comply with such capital requirements may result in significant limitations on its business or other sanctions. As a “small bank holding company”, we are not subject to consolidated capital requirements under the new Basel III capital rules. The current regulatory capital requirements and possible consequences of failure to maintain compliance are described in Part I, Item 1 “Business‑Regulation” and in Note 15 of the Notes to Consolidated Financial Statements.

Liquidity

The objective of liquidity management is to ensure that we have the continuing ability to fund operations and meet our obligations on a timely and cost‑effective basis. The Bank’s sources of funds include deposits, advances from the FHLB, other borrowings, proceeds from the sale of loans, REO, and investment securities, and payments of principal and interest on loans and investment securities. The Bank is currently approved by the FHLB to borrow up to 40% of total assets to the extent the Bank provides qualifying collateral and holds sufficient FHLB stock. The approved limit and collateral requirement would have permitted the Bank to borrow an additional $40.3 million at December 31, 2020.

The Bank’s primary uses of funds include withdrawals of and interest payments on deposits, originations of loans, purchases of investment securities, and the payment of operating expenses. Also, when the Bank has more funds than required for reserve requirements or short‑term liquidity needs, the Bank invests excess cash with the Federal Reserve Bank or other financial institutions. The Bank’s liquid assets at December 31, 2020 consisted of $96.1 million in cash and cash equivalents and $10.7 million in securities available‑for‑sale that were not pledged, compared to $15.6 million in cash and cash equivalents and $11.0 million in securities available‑for‑sale that were not pledged at December 31, 2019. We believe that the Bank has sufficient liquidity to support growth over the foreseeable future.

The Company’s liquidity, separate from the Bank, is based primarily on proceeds from financing transactions, including the private placements completed in August 2013, October 2014, December 2016 and the private placements expected to be completed shortly after the closing of the City First Merger, as well as dividends received from the Bank in 2017, 2018, 2019 and 2020. The Bank is currently under no prohibition to pay dividends but is subject to restrictions as to the amount of the dividends it can pay based on normal regulatory guidelines.

The Company recorded consolidated net cash outflows from operating activities of $13.6 million during the year ended December 31, 2020 and net cash inflows from operating activities of $8.5 million during the year ended December 31, 2019. Net cash outflows from operating activities during 2020 were primarily attributable to originations of loans receivable held for sale of $118.6 million offset by proceeds from sales and repayments of loans receivable held for sale of $105.2 million.  Net cash inflows from operating activities during 2019 were primarily attributable to proceeds from sales and repayments of loans receivable held for sale of $23.1 million, offset by originations of loans receivable held for sale of $15.2 million.

The Company recorded consolidated net cash inflows from investing activities of $50.7 million during the year ended December 31, 2020 and net cash outflows from investing activities of $39.1 million during the year ended December 31, 2019. Net cash inflows from investing activities during 2020 were primarily attributable to a net decrease in loans receivable held for investment of $51.1 million and principal repayments on available-for-sale securities of $2.5 million, offset by purchases of available-for-sale municipal bonds of $2.0 million and purchase of FHLB stock of $742 thousand.  Net cash outflows from investing activities during 2019 were primarily attributable to a net increase in loans receivable held for investment of $44.0 million, offset by principal repayments on available‑for‑sale securities of $4.1 million and proceeds from the sale of REO of $820 thousand.

32

Table of Contents

The Company recorded consolidated net cash inflows from financing activities of $43.4 million and $29.5 million during the year ended December 31, 2020 and 2019, respectively.  Net cash inflows from financing activities during 2020 were primarily attributable to an increase in proceeds from FHLB advances of $60.0 million and  a net inflow of deposits of $17.9 million, offset by repayments of FHLB advances of $33.5 million and repayments of junior subordinated debentures of $1.0 million.  Net cash inflows from financing activities during 2019 were primarily attributable to an increase in proceeds from FHLB advances of $22.0 million and an increase in deposits of $16.3 million, offset by repayments of FHLB advances of $8.0 million and repayments of junior subordinated debentures of $765 thousand.

Off‑Balance‑Sheet Arrangements and Contractual Obligations

We are party to financial instruments with off‑balance‑sheet risk in the normal course of our business, primarily in order to meet the financing needs of our customers. These instruments involve, to varying degrees, elements of credit, interest rate and liquidity risk. In accordance with GAAP, these instruments are either not recorded in the consolidated financial statements or are recorded in amounts that differ from the notional amounts. Such instruments primarily include lending commitments and lease commitments as described below.

Lending commitments include commitments to originate loans and to fund lines of credit. Commitments to extend credit are agreements to lend to a customer if there is no violation of any condition established in the commitment. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the borrower. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. We evaluate creditworthiness on a case‑by‑case basis. Our maximum exposure to credit risk is represented by the contractual amount of the instruments.

In addition to our lending commitments, we have contractual obligations related to operating lease commitments. Operating lease commitments are obligations under various non‑cancellable operating leases on buildings and land used for office space and banking purposes. The following table details our contractual obligations at December 31, 2020.

Less than<br><br> <br>one year More than<br><br> <br>one year to<br><br> <br>three years More than<br><br> <br>three years to<br><br> <br>five years More than<br><br> <br>five years Total
(Dollars in thousands)
Certificates of deposit $ 113,221 $ 14,904 $ 516 $ 75 $ 128,716
FHLB advances 27,500 48,000 35,000 ‑ 110,500
Junior subordinated debentures 2,040 1,275 - - 3,315
Commitments to originate loans - ‑ ‑ ‑ -
Commitments to fund unused lines of credit 1,981 ‑ ‑ 491 2,472
Operating lease obligations 194 - ‑ ‑ 194
Total contractual obligations $ 144,936 $ 64,179 $ 35,516 $ 566 $ 245,197

33

Table of Contents

Impact of Inflation and Changing Prices

Our consolidated financial statements, including accompanying notes, have been prepared in accordance with GAAP which require the measurement of financial position and operating results primarily in terms of historical dollars without considering the changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in increased costs of our operations. Unlike industrial companies, nearly all our assets and liabilities are monetary in nature. As a result, interest rates have a greater impact on our performance than do the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the price of goods and services.

Critical Accounting Policies

Critical accounting policies are those that involve significant judgments and assessments by management, and which could potentially result in materially different results under different assumptions and conditions. This discussion highlights those accounting policies that management considers critical. All accounting policies are important, however, and therefore you are encouraged to review each of the policies included in Note 1 “Summary of Significant Accounting Principles” of the Notes to Consolidated Financial Statements beginning at page F‑6 to gain a better understanding of how our financial performance is measured and reported. Management has identified the Company’s critical accounting policies as follows:

Allowance for Loan Losses

The determination of the allowance for loan losses is considered critical due to the high degree of judgment involved, the subjectivity of the underlying assumptions used, and the potential for changes in the economic environment that could result in material changes in the amount of the allowance for loan losses considered necessary. The allowance is evaluated on a regular basis by management and the Board of Directors and is based on a periodic review of the collectability of the loans in light of historical experience, the nature and size of the loan portfolio, adverse situations that may affect borrowers’ ability to repay, the estimated value of any underlying collateral, prevailing economic conditions and feedback from regulatory examinations. See Item 1, “Business – Asset Quality – Allowance for Loan Losses” for a full discussion of the allowance for loan losses.

Income Taxes

Deferred tax assets and liabilities are determined using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax bases of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws. A valuation allowance is established against deferred tax assets when, based upon the available evidence including historical and projected taxable income, it is more likely than not that some or all the deferred tax asset will not be realized. In assessing the realization of deferred tax assets, management evaluates both positive and negative evidence, including the existence of any cumulative losses in the current year and the prior two years, the amount of taxes paid in available carry‑back years, forecasts of future income and available tax planning strategies. This analysis is updated quarterly. Based on this analysis, we determined that no valuation allowance was required on our deferred tax assets, which totaled $5.6 million and $5.2 million at December 31, 2020 and 2019, respectively. See Note 13 “Income Taxes” of the Notes to Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data.”

Fair Value Measurements

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

34

Table of Contents

Fair values are estimated using relevant market information and other assumptions, as more fully disclosed in Note 8 of the Notes to Consolidated Financial Statements. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for items. Changes in assumptions or in market conditions could significantly affect the estimates.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Index to Consolidated Financial Statements of Broadway Financial Corporation and Subsidiaries.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

As of December 31, 2020, an evaluation was performed under the supervision of the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2020.

Management’s annual report on internal control over financial reporting

The management of Broadway Financial Corporation is responsible for establishing and maintaining adequate internal control over financial reporting for the Company as defined in Rule 13a‑15(f) under the Exchange Act. This system, which management has chosen to base on the framework set forth in Internal Control‑Integrated Framework, published by the 1992 Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and which is effected by the Company’s Board of Directors, management and other personnel, is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and the Directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. Further, because of changes in conditions, effectiveness of internal controls over financial reporting may vary over time.

With the participation of the Company’s CEO and CFO, management has conducted an evaluation of the effectiveness of the Company’s system of internal control over financial reporting. Based on this evaluation, management determined that the Company’s system of internal control over financial reporting was effective as of December 31, 2020.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

35

Table of Contents

Changes in internal control over financial reporting

There were no significant changes in the Company’s internal control over financial reporting identified in connection with the evaluation of internal control over financial reporting that occurred during the fourth quarter of 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

/s/ Wayne‑Kent A. Bradshaw /s/ Brenda J. Battey
Wayne‑Kent A. Bradshaw<br><br> <br>Chief Executive Officer<br><br> <br>(Principal Executive Officer) Brenda J. Battey<br><br> <br>Chief Financial Officer<br><br> <br>(Principal Financial Officer and<br><br> <br>Principal Accounting Officer)
Los Angeles, CA<br><br> <br>March 31, 2021 Los Angeles, CA<br><br> <br>March 31, 2021
ITEM 9B. OTHER INFORMATION
--- ---

None

36

Table of Contents

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item is incorporated herein by reference to the definitive Proxy Statement, under the captions “Election of Directors”, “Executive Officers”, “Code of Ethics” and “Section 16(a) Beneficial Ownership Reporting Compliance”, that will be filed with the Securities and Exchange Commission in connection with the Company’s 2020 Annual Meeting of Stockholders (the “Company’s Proxy Statement”).

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item is incorporated herein by reference to the Company’s Proxy Statement, under the caption “Executive Compensation” and “Director Compensation.”

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item is incorporated herein by reference to the Company’s Proxy Statement, under the caption “Security Ownership of Certain Beneficial Owners and Management.”

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item is incorporated herein by reference to the Company’s Proxy Statement, under the caption “Certain Relationships and Related Transactions” and “Election of Directors.”

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item is incorporated herein by reference to the Company’s Proxy Statement, under the caption “Ratification of the Appointment of the Independent Registered Public Accounting Firm.”

37

Table of Contents

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) 1. See Index to Consolidated Financial Statements.
--- ---
  1. Financial Statement Schedules have been omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or Notes thereto included under Item 8, “Financial Statements and Supplementary Data.”
(b) List of Exhibits
Exhibit<br><br> <br>Number*
--- ---
2.1 Agreement and Plan of Merger, dated as of August 25, 2020, by and between Broadway Financial Corporation and CFBanc Corporation (Exhibit 2.1 to Form 8-K filed by Registrant on August 26, 2020)
2.1.1 Amendment No. 1 to Agreement and Plan of Merger, dated as of January 14, 2021), by and between Broadway Financial Corporation and CFBanc Corporation (Exhibit 2.1 to Form 8-K filed by Registrant on January 14,<br> 2021)
3.1 Certificate of Incorporation of Registrant and all amendments thereto (Exhibit 3.1 to Form 10‑Q filed by Registrant on November 13, 2014)
3.2 Bylaws of Registrant (Exhibit 3.2 to Form 8‑K filed by Registrant on August 24, 2020)
3.3 Certificate of Designations for the Series B Junior Participating Preferred Stock (Exhibit 3.1 to Form 8-K filed by Registrant on September 10, 2019)
4.1 Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
4.2 Rights Agreement between Broadway Financial Corporation and Computershare Trust Company, N.A., as rights agent (Exhibit 4.1 to Form 8-K filed by Registrant on September 10, 2019)
4.2.1 Amendment to Rights Agreement, dated as of August 25, 2020, by and between Broadway Financial Corporation and Computershare Trust Company, N.A. (Exhibit 4.1 to Form 8-K file by Registrant on August 26, 2020)
10.1** Broadway Federal Bank Employee Stock Ownership Plan (Exhibit 10.1 to Form 10‑K filed by Registrant on March 28, 2016)
10.2** Amended and Restated Broadway Financial Corporation 2008 Long Term Incentive Plan (Exhibit 10.3 to Form 10‑Q filed by Registrant on August 12, 2016)
10.3** Amended Form of Stock Option Agreement for stock options granted pursuant to Amended and Restated Broadway Financial Corporation 2008 Long‑Term Incentive Plan (Exhibit 10.1 to Form 10‑Q filed by Registrant on<br> August 12, 2016)
10.5** Broadway Financial Corporation 2018 Long‑Term Incentive Plan (Exhibit 10.5 to Form 10-K filed by Registrant on March 29, 2019)
10.6** Form of Award Agreement for grants of restricted stock pursuant to Broadway Financial Corporation 2018 Long‑Term Incentive Plan  (Exhibit 10.6 to Form 10-K filed by Registrant on March 29, 2019)
10.7** Employment Agreement, dated as of March 22, 2017, for Wayne‑Kent A. Bradshaw (Exhibit 10.7 to Form 10-K filed by Registrant on March 29, 2019)
10.10** Award Agreement, dated as of February 27, 2019 for grant of restricted stock to Wayne‑Kent A. Bradshaw pursuant to Broadway Financial Corporation 2018 Long‑Term Incentive Plan  (Exhibit 10.10 to Form 10-K filed<br> by Registrant on March 29, 2019)
10.11** Employment Agreement, dated as of May 1, 2017, for Brenda J. Battey  (Exhibit 10.11 to Form 10-K filed by Registrant on March 29, 2019)
10.11.1** Amendment to Employment Agreement for Brenda J. Battey, dated as of January 14, 2021 (Exhibit 10.1 to form 8-K filed by Registrant on January 14, 2021)
10.12** Employment Agreement, dated as of May 1, 2017, for Norman Bellefeuille  (Exhibit 10.12 to Form 10-K filed by Registrant on March 29, 2019)
10.12.1** Amendment to Employment Agreement for Norman Bellefeuille, dated as of January 14, 2021 (Exhibit 10.2 to form 8-K filed by Registrant on January 14, 2021)

38

Table of Contents
Exhibit<br><br> <br>Number*
--- ---
10.13** Employment Agreement, dated as of May 1, 2017, for Ruth McCloud  (Exhibit 10.13 to Form 10-K filed by Registrant on March 29, 2019)
10.13.1** Amendment to Employment Agreement for Ruth McCloud, dated as of January 14, 2021 (Exhibit 10.3 to form 8-K filed by Registrant on January 14, 2021)
10.14** Broadway Federal Bank Incentive Compensation Plan  (Exhibit 10.14 to Form 10-K filed by Registrant on March 29, 2019)
10.16 Stock Purchase Agreement, dated as of December 21, 2016, entered between First Republic Bank and Registrant (Exhibit 10.8 to Form 10‑K filed by Registrant on March 27, 2017)
10.21 Stock Purchase Agreement, dated as of November 23, 2020, entered between Banc of America Strategic Investments Corporation and Registrant (Exhibit 10.15 to Registration Statement on S-4 filed by Registrant on<br> January 19, 2021)
10.22 Stock Purchase Agreement, dated as of November 23, 2020, entered between Cedars-Sinai Medical Center and Registrant (Exhibit 10.14 to Registration Statement on S-4 filed by Registrant on January 19, 2021)
10.23 Stock Purchase Agreement, dated as of November 24, 2020, entered between Wells Fargo Central Pacific Holdings, Inc. and Registrant (Exhibit 10.16 to Registration Statement on S-4 filed by Registrant on January<br> 19, 2021)
10.24 Stock Purchase Agreement, dated as of February 19, 2021, entered between Ally Ventures, a business unit of Ally Financial Inc., and Registrant
10.25 Stock Purchase Agreement, dated as of February 19, 2021, entered between Banner Bank and Registrant
10.26 Stock Purchase Agreement, dated as of February 19, 2021, entered between Citicorp Banking Corporation and Registrant

39

Table of Contents
Exhibit<br><br> <br>Number*
--- ---
10.27 Stock Purchase Agreement, dated as of February 19, 2021, entered between First Republic Bank and Registrant
10.28 Stock Purchase Agreement, dated as of February 19, 2021, entered between Geral I. White and Registrant
10.29 Stock Purchase Agreement, dated as of February 19, 2021, entered between Gerald I. White, in his capacity as the trustee for the Grace & White, Inc. Profit Sharing Plan, and Registrant
10.30 Stock Purchase Agreement, dated as of February 19, 2021, entered between Registrant and Butterfield Trust (Bermuda) Limited as trustee of each of the following: The Lorraine Grace Will Trust, The Anne Grace<br> Kelly Trust 99, The Gwendolyn Grace Trust 99, The Lorraine L. Grace Trust 99, and The Ruth Grace Jervis Millennium Trust
10.31 Stock Purchase Agreement, dated as of February 19, 2021, entered between Texas Capital Community Development Corporation and Registrant
10.32 Stock Purchase Agreement, dated as of February 20, 2021, entered between J.P. Morgan Chase Community Development Corporation and Registrant
21.1 List of Subsidiaries (Exhibit 21.1 to Registration Statement on Form S‑1 filed by Registrant on November 20, 2013)
23.1 Consent of Moss Adams LLP
31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002
31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002
99.4 Certification of Chief Executive Officer pursuant to Interim Final Rule – TARP Standards for Compensation and Corporate Governance at 31 CFR Part 30
99.5 Certification of Chief Financial Officer pursuant to Interim Final Rule – TARP Standards for Compensation and Corporate Governance at 31 CFR Part 30)
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definitions Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
* Exhibits followed by a parenthetical reference are incorporated by reference herein from the document filed by the Registrant with the SEC described therein. Except as otherwise indicated, the SEC File No. for each incorporated document is<br> 000‑27464.
** Management contract or compensatory plan or arrangement.
--- ---

40

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BROADWAY FINANCIAL CORPORATION
/s/ Wayne‑Kent A. Bradshaw
By: Wayne‑Kent A. Bradshaw<br><br> <br>Chief Executive Officer
Date: March 31, 2021

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Wayne‑Kent A. Bradshaw Date: March 31, 2021
Wayne‑Kent A. Bradshaw<br><br> <br>Chief Executive Officer and President<br><br> <br>(Principal Executive Officer)
/s/ Brenda J. Battey Date: March 31, 2021
Brenda J. Battey<br><br> <br>Chief Financial Officer<br><br> <br>(Principal Financial Officer and Principal Accounting Officer)
/s/ Virgil P. Roberts Date: March 31, 2021
Virgil P. Roberts<br><br> <br>Chairman of the Board
/s/ Robert C. Davidson, Jr. Date: March 31, 2021
Robert C. Davidson, Jr.<br><br> <br>Director
/s/ Jack T. Thompson Date: March 31, 2021
Jack T. Thompson<br><br> <br>Director
/s/ Daniel A. Medina Date: March 31, 2021
Daniel A. Medina<br><br> <br>Director
/s/ Dutch C. Ross III Date: March 31, 2021
Dutch C. Ross III<br><br> <br>Director
/s/ Erin Selleck Date: March 31, 2021
Erin Selleck<br><br> <br>Director

41

Table of Contents

BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY

Index to Consolidated Financial Statements

Years ended December 31, 2020 and 2019

Report of Independent Registered Public Accounting Firm F‑1
Consolidated Statements of Financial Condition F‑2
Consolidated Statements of Operations and Comprehensive Income F‑3
Consolidated Statements of Changes in Stockholders’ Equity F‑4
Consolidated Statements of Cash Flows F‑5
Notes to Consolidated Financial Statements F‑6

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

Broadway Financial Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial condition of Broadway Financial Corporation and Subsidiary (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations and comprehensive income, changes in stockholders’ equity and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated

      financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2020 and 2019, and the consolidated results of its operations and its cash flows for the years then ended, in
      conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Loan Losses

As described in Notes 1 and 5 to the consolidated financial statements, the Company’s allowance for loan losses balance was $3.2 million at December 31, 2020. The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. The allowance consists of general and specific components. The general component covers loans that are collectively evaluated for impairment and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment with the use of a loss migration analysis and is based on the actual loss history experienced by the Company over the most recent five years. The Company assigns a risk rating to all loans based on historical loss experience and periodically performs detailed reviews of all such loans over a certain threshold to identify credit risks and assess overall collectability. This actual loss experience is supplemented with information about other current economic factors based on the risks present for each portfolio segment. These current economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge‑offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.

We identified management’s risk ratings of loans and the estimation of current economic factors, both of which are used in the allowance for loan losses calculation, as critical audit matters because these estimates and underlying assumptions require significant management judgment in the evaluation of the credit quality and the estimation of incurred losses inherent within the loan portfolio as of the balance sheet date and in turn led to a high degree of auditor judgment and subjectivity in performing the procedures and evaluating the related audit evidence.

The primary procedures we performed to address this critical audit matter included:

• Evaluating design and implementation of internal controls relating to management’s calculation of the allowance for loan losses.
• Testing the design, implementation, and operating effectiveness of controls over the accuracy of risk ratings of loans.
--- ---
• Testing a risk-based targeted selection of loans to gain substantive evidence that the Company is appropriately rating these loans in accordance with its policies, and that the risk ratings for the loans are reasonable.
--- ---
• Obtaining management’s analysis and supporting documentation related to the economic factors, and testing whether the economic factors used in the calculation of the allowance for loan losses are supported by the analysis provided by<br> management and are used in a manner consistent with management’s established policies and procedures.
--- ---
• Testing the appropriateness of the methodology and assumptions used in the calculation of the allowance for loan losses, and testing the calculation itself, including completeness and accuracy of the data used in the calculation,<br> application of the loan risk ratings determined by management and used in the calculation, application of the current economic factors determined by management and used in the calculation, and recalculation of the allowance for loan losses<br> balance.
--- ---

/s/ Moss Adams LLP

Los Angeles, California

March 31, 2021

We have served as the Company’s auditor since 2014.

F-1

Table of Contents

BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY

Consolidated Statements of Financial Condition

December 31, 2019
Assets:
Cash and due from banks 71,110 $ 3,016
Interest‑bearing deposits in other banks 24,999 12,550
Cash and cash equivalents 96,109 15,566
Investment securities available‑for‑sale, at fair value 10,698 11,006
Loans receivable held for investment, net of allowance of 3,215 and 3,182 360,129 397,847
Accrued interest receivable 1,202 1,223
Federal Home Loan Bank (FHLB) stock 3,431 2,916
Office properties and equipment, net 2,540 2,783
Bank owned life insurance 3,147 3,100
Deferred tax assets, net 5,633 5,220
Investment in affordable housing limited partnership 58 163
Other assets 431 545
Total assets 483,378 $ 440,369
Liabilities and stockholders’ equity
Liabilities:
Deposits 315,630 $ 297,724
FHLB advances 110,500 84,000
Junior subordinated debentures 3,315 4,335
Advance payments by borrowers for taxes and insurance 787 1,033
Accrued expenses and other liabilities 4,261 4,429
Total liabilities 434,493 391,521
Commitments and Contingencies (Note 16)
Stockholders’ Equity:
Preferred stock, .01 par value, authorized 1,000,000 shares; none issued or outstanding — —
Common stock, .01 par value, voting, authorized 50,000,000 shares at December 31, 2020 and December 31, 2019; issued 21,899,584 shares at December 31, 2020 and<br> 21,729,249 shares at December 31, 2019; outstanding 19,281,758 shares at December 31, 2020 and 19,111,423 shares at December 31, 2019 219 218
Common stock, .01 par value, non‑voting, authorized 25,000,000 shares at December 31, 2020 and December 31, 2019; issued and outstanding 8,756,396 shares at<br> December 31, 2020 and December 31, 2019 87 87
Additional paid‑in capital 46,851 46,426
Retained earnings 7,783 8,425
Unearned Employee Stock Ownership Plan (ESOP) shares (893 ) (959 )
Accumulated other comprehensive income (loss), net of tax 164 (23 )
Treasury stock‑at cost, 2,617,826 shares at December 31, 2020 and at December 31, 2019 (5,326 ) (5,326 )
Total stockholders’ equity 48,885 48,848
Total liabilities and stockholders’ equity 483,378 $ 440,369

All values are in US Dollars.

See accompanying notes to consolidated financial statements.

F-2

Table of Contents

BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY

Consolidated Statements of Operations and Comprehensive (Loss) Income

Year Ended December 31,
2020 2019
(In thousands, except per share)
Interest Income:
Interest and fees on loans receivable $ 17,016 $ 15,845
Interest on investment securities 253 359
Other interest income 375 643
Total interest income 17,644 16,847
Interest Expense:
Interest on deposits 3,163 4,276
Interest on borrowings 2,312 2,110
Total interest expense 5,475 6,386
Net interest income before loan loss provision recapture 12,169 10,461
Loan loss (provision) recapture (29 ) 7
Net interest income after loan loss (provision) recapture 12,140 10,468
Non‑Interest Income:
Service charges 420 491
Net gain on sales of loans 276 204
CDFI grant 203 233
Other 126 124
Total non‑interest income 1,025 1,052
Non‑Interest Expense:
Compensation and benefits 8,362 7,357
Occupancy expense 1,288 1,265
Information services 937 888
Professional services 2,299 1,144
Office services and supplies 354 280
Loan related expenses 115 163
Corporate insurance 126 133
Amortization of investment in affordable housing limited partnership 105 179
Other 628 662
Total non‑interest expense 14,214 12,071
Loss before income tax benefits (1,049 ) (551 )
Income tax benefits (407 ) (345 )
Net loss $ (642 ) $ (206 )
Other comprehensive income, net of tax:
Unrealized gains on securities available‑for‑sale arising during the period $ 266 $ 369
Income tax expense 79 109
Other comprehensive income, net of tax 187 260
Comprehensive (loss) income $ (455 ) $ 54
Loss per common share‑basic $ (0.02 ) $ (0.01 )
Loss per common share‑diluted $ (0.02 ) $ (0.01 )

See accompanying notes to consolidated financial statements.

F-3

Table of Contents

BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY

Consolidated Statements of Changes in Stockholders’ Equity

(In thousands, except share and per share)

Common<br><br> <br>Shares<br><br> <br>Issued Common<br><br> <br>Stock Additional<br><br> <br>Paid‑in<br><br> <br>Capital Retained<br><br> <br>Earnings Unearned<br><br> <br>ESOP shares Accumulated<br><br> <br>Other<br><br> <br>Comprehensive<br><br> <br>Loss, Net Treasury<br><br> <br>Stock Total<br><br> <br>Stockholders’<br><br> <br>Equity
Balance at December 31, 2018 30,036,624 $ 300 $ 46,141 $ 8,631 $ (1,027 ) $ (283 ) $ (5,326 ) $ 48,436
Net loss ‑ ‑ ‑ (206 ) ‑ ‑ ‑ (206 )
Common stock issued for services 42,168 1 52 ‑ ‑ ‑ ‑ 53
Common stock repurchased for tax withholdings - ‑ (14 ) ‑ ‑ ‑ ‑ (14 )
Release of unearned ESOP shares ‑ ‑ (3 ) ‑ 68 ‑ ‑ 65
Change in unrealized gain on securities available‑for‑sale, net of tax ‑ ‑ ‑ ‑ ‑ 260 ‑ 260
Restricted stock compensation expense 406,853 4 212 ‑ ‑ ‑ ‑ 216
Stock‑based compensation expense ‑ ‑ 38 ‑ ‑ ‑ ‑ 38
Balance at December 31, 2019 30,485,645 $ 305 $ 46,426 $ 8,425 $ (959 ) $ (23 ) $ (5,326 ) $ 48,848
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Net loss ‑ ‑ ‑ (642 ) ‑ ‑ ‑ (642 )
Common stock issued for services 30,930 - 45 ‑ ‑ ‑ ‑ 45
Release of unearned ESOP shares ‑ ‑ 2 ‑ 66 ‑ ‑ 68
Change in unrealized gain on securities available‑for‑sale, net of tax ‑ ‑ ‑ ‑ ‑ 187 ‑ 187
Restricted stock compensation expense, net of forfeitures 139,405 1 339 ‑ ‑ ‑ ‑ 340
Stock‑based compensation expense ‑ ‑ 39 ‑ ‑ ‑ ‑ 39
Balance at December 31, 2020 30,655,980 $ 306 $ 46,851 $ 7,783 $ (893 ) $ 164 $ (5,326 ) $ 48,885

See accompanying notes to consolidated financial statements.

F-4

Table of Contents

BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY

Consolidated Statements of Cash Flows

Year Ended December 31
2020 2019
(In thousands)
Cash flows from operating activities:
Net loss $ (642 ) $ (206 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Loan loss provision (recaptures) 29 (7 )
Provision for losses on REO - 13
Depreciation 121 227
Reversal of valuation allowance on loan held for sale - (12 )
Net amortization of deferred loan origination costs 275 254
Net amortization of premiums on mortgage‑backed securities 37 30
Amortization of investment in affordable housing limited partnership 105 179
Stock‑based compensation expense 379 254
Stocks granted to directors 45 53
ESOP compensation expense 68 65
Earnings on bank owned life insurance (47 ) (53 )
Originations of loans receivable held for sale (118,626 ) (15,182 )
Proceeds from sales and repayments of loans receivable held for sale 105,211 23,074
Gain on sale of loans receivable held for sale (276 ) (204 )
Changes in operating assets and liabilities
Net change in deferred taxes (492 ) (284 )
Net change in accrued interest receivable 21 (80 )
Net change in other assets 114 124
Net change in advance payments by borrowers for taxes and insurance (246 ) (22 )
Net change in accrued expenses and other liabilities 369 310
Net cash (used in) provided by operating activities (13,555 ) 8,533
Cash flows from investing activities:
Net change in loans receivable held for investment 51,105 (43,983 )
Principal payments on available‑for‑sale securities 2,537 4,055
Purchases of available-for-sale municipal bonds (2,000 ) -
Proceeds from sales of REO - 820
Purchase of FHLB stock (742 ) -
Redemption of FHLB stock 227 -
Additions to office properties and equipment (415 ) (41 )
Net cash provided by (used in) investing activities 50,712 (39,149 )
Cash flows from financing activities:
Net change in deposits 17,906 16,310
Proceeds from FHLB advances 60,000 22,000
Repayments on FHLB advances (33,500 ) (8,000 )
Payment for tax withholding for vesting of restricted stock - (14 )
Repayments of junior subordinated debentures (1,020 ) (765 )
Net cash provided by financing activities 43,386 29,531
Net change in cash and cash equivalents 80,543 (1,085 )
Cash and cash equivalents at beginning of the year 15,566 16,651
Cash and cash equivalents at end of the year $ 96,109 $ 15,566
Supplemental disclosures of cash flow information:
Cash paid for interest $ 5,771 $ 6,336
Cash paid for income taxes 8 13
Supplemental disclosures of non‑cash investing and financing activities:
Transfers of loans receivable held for sale to loans receivable held for investment $ 13,691 $ 9,227
Transfers of loans receivable held for investment to loans receivable held for sale - 10,684
Common stock exchanged for payment of tax withholding - 14
Initial recognition of operating lease right-to-use assets - 1,120
Initial recognition of operating lease liabilities - 1,120

F-5

Table of Contents

BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2020 and 2019

Note 1 – Summary of Significant Accounting Policies

Nature of Operations and Principles of Consolidation

Broadway Financial Corporation (the “Company”) is a Delaware corporation primarily engaged in the savings and loan business through its wholly owned subsidiary, Broadway Federal Bank, f.s.b. (the “Bank”). The Bank’s business is that of a financial intermediary and consists primarily of attracting deposits from the general public and using such deposits, together with borrowings and other funds, to make mortgage loans secured by residential and commercial real estate located in Southern California. At December 31, 2020, the Bank operated two retail‑banking offices in Los Angeles, California and one in the nearby city of Inglewood, California. The Bank is subject to significant competition from other financial institutions and is also subject to regulation by certain federal agencies and undergoes periodic examinations by those regulatory authorities.

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Broadway Federal Bank, f.s.b. All significant inter‑company transactions and balances have been eliminated in consolidation.

Use of Estimates

To prepare consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”), management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the consolidated financial statements and the disclosures provided, and actual results could differ from these estimates. The allowance and provision for loan losses, specific reserves for impaired loans, fair value of real estate owned, deferred tax asset valuation allowance, and fair values of investment securities and other financial instruments are particularly subject to change.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, cash items in the process of collection, amounts due from correspondent banks and the Federal Reserve Bank of San Francisco (the “Federal Reserve Bank”), and interest‑bearing deposits in other banks with initial terms of ninety days or less. The Company may be required to maintain reserve and clearing balances with the Federal Reserve Bank under the Federal Reserve Act of 1913, as amended. Effective on March 26, 2020, as a part of Federal Reserve Bank’s tools to promote maximum employment, Federal Reserve Bank Board reduced reserve requirement ratios to zero.  The reserve and clearing requirement balance was no longer required at December 31, 2020. Net cash flows are reported for customer loan and deposit transactions, interest‑bearing deposits in other banks, deferred income taxes and other assets and liabilities.

Investment Securities

Debt securities are classified as held‑to‑maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available‑for‑sale when they might be sold before maturity. Securities available‑for‑sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income (loss), net of tax.

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level‑yield method without anticipating prepayments. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

Management evaluates securities for other‑than‑temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. Consideration is given to the financial condition and near‑term prospects of the issuer, the length of time and the extent to which the fair value has been less than the cost, and the intent and ability of management to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition.

F-6

Table of Contents

Loans Receivable Held for Sale

The Bank originates loans for sale, and may, from time‑to‑time, decide to retain certain loans for held for investment in order to manage loan concentrations. When a decision is made to retain loans held-for-sale for held-for-investment, such loans are transferred from held‑for‑sale portfolio to held‑for‑investment portfolio at the lower of cost or fair value. If a reduction in value is required at time of the transfer, a charge‑off is recorded against the allowance for loan and lease losses (“ALLL”). Any subsequent decline in value of the loans is recorded as a valuation allowance with a corresponding charge to non‑interest expense.

Transfers of loans are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been legally isolated from the Bank, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right), to pledge or exchange the transferred assets, and provides no more than a trivial benefit to the Bank, and (3) the Bank does not maintain effective control over the transferred assets.

Loans receivable held for sale are generally sold with servicing rights released. Gains and losses on sales of loans are based on the difference between the selling price and the carrying value of the related loan sold. When loans receivable held for sale are sold, existing deferred loan fees or costs are an adjustment of the gain or loss on sale.

Loans Receivable Held for Investment

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of allowance for loan losses, deferred loan fees and costs and unamortized premiums and discounts. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct loan origination costs, premiums and discounts are deferred, and recognized in income using the level‑yield method without anticipating prepayments.

Interest income on all loans is discontinued at the time the loan is 90 days delinquent unless the loan is well‑secured and in process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on non‑accrual or charged‑off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not received for loans placed on non‑accrual is reversed against interest income. Interest received on such loans is accounted for on the cash‑basis or cost recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Concentration of Credit Risk

Concentrations of credit risk arise when several customers are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. The Company’s lending activities are predominantly in real estate loans that are secured by properties located in Southern California and many of the borrowers reside in Southern California. Therefore, the Company’s exposure to credit risk is significantly affected by changes in the economy and real estate market in the Southern California area.

The Company has a significant concentration of deposits with two long‑time customers that accounted for approximately 13% of its deposits as of December 31, 2020. The Company expects to maintain the relationships with the customers for the near term.

Loans Purchased

The Bank purchases or participates in loans originated by other institutions from time to time. Subject to regulatory restrictions applicable to savings institutions, the Bank’s current loan policies allow all loan types to be purchased. The determination to purchase specific loans or pools of loans is based upon the Bank’s investment needs and market opportunities and is subject to the Bank’s underwriting policies, which require consideration of the financial condition of the borrower and the appraised value of the property, among other factors. Premiums or discounts incurred upon the purchase of loans are recognized in income using the interest method over the estimated life of the loans, adjusted for actual prepayments. No loans were purchased during 2020 and 2019.

F-7

Table of Contents

Allowance for Loan Losses

The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent cash recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, could be charged off.

The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDR”) and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on case‑by‑case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

If a loan is impaired, either a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or alternatively a charge‑off is taken to record the loan at the fair value of the collateral, less estimated selling costs, if repayment is expected solely from the collateral.

TDRs are individually evaluated for impairment and included in the separately identified impairment disclosures. TDRs are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a TDR is a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For TDRs that subsequently default, the Company determines the amount of any necessary additional charge‑off based on internal analyses and appraisals of the underlying collateral securing these loans.

The general component covers loans that are collectively evaluated for impairment and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment with the use of a loss migration analysis and is based on the actual loss history experienced by the Company over the most recent five years. This actual loss experience is supplemented with information about other current economic factors based on the risks present for each portfolio segment. These current economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge‑offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.

The following portfolio segments have been identified: one‑to‑four units (“single family”), five or more units (“multi‑family”), commercial real estate, church, construction, commercial loans, and consumer loans. The risks in our various portfolio segments are as follows:

Single Family – Subject to adverse employment conditions in the local economy leading to increased default rate, decreased market values from oversupply in a geographic area and  incremental rate increases on adjustable rate mortgages which may impact the ability of borrowers to maintain payments.

Multi‑Family – Subject to adverse various market conditions that cause a decrease in market value or lease rates, changes in personal funding sources for tenants, oversupply of units in a specific region, population shifts and reputational risks.

Commercial Real Estate – Subject to adverse conditions in the local economy which may lead to reduced cash flows due to vacancies and reduced rental rates, and decreases in the value of underlying collateral.

F-8

Table of Contents

Church – Subject to adverse economic and employment conditions, which may lead to reduced cash flows from members’ donations and offerings, and the stability, quality and popularity of church leadership.

Construction – Subject to adverse conditions in the local economy, which may lead to reduced demand for new commercial, multi‑family or single family buildings or reduced lease or sale opportunities once the building is complete.

Commercial – Subject to industry and economic conditions including decreases in product demand.

Consumer – Subject to adverse employment conditions in the local economy, which may lead to higher default rates.

Real Estate Owned

Assets acquired through, or by deed in lieu of, loan foreclosure are initially recorded at fair value less estimated costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through a provision that is charged to non‑interest expense. Operating costs after acquisition are expensed as incurred.

Office Properties and Equipment

Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Buildings and related components are depreciated using the straight‑line method with useful lives ranging from 10 to 40 years. Furniture, fixtures and equipment are depreciated using the straight‑line method with useful lives ranging from 3 to 10 years. Leasehold improvements are amortized over the lease term or the estimated useful life of the asset, whichever is shorter.

Federal Home Loan Bank (FHLB) stock

The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income when declared.

Bank‑Owned Life Insurance

The Bank has purchased life insurance policies on a former key executive. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

Investment in Affordable Housing Limited Partnership

The Bank owns a less than 5% interest in an affordable housing limited partnership. The investment is recorded using the cost method and is being amortized over the life of the related tax credits. The tax credits are being recognized in income tax expense in the consolidated financial statements to the extent they are utilized on the Company’s income tax returns. The investment is reviewed for impairment on an annual basis or on an interim basis if an event occurs that would trigger potential impairment.

Loan Commitments and Related Financial Instruments

Financial instruments include off‑balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

F-9

Table of Contents

Revenue Recognition

Accounting Standard Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires the Company to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. Most of our revenue‑generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as our loans and investment securities, as these activities are subject to other GAAP discussed elsewhere within our disclosures. The Company’s revenue stream that is within the scope of Topic 606 is primarily service charges on deposit accounts, which consist of monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transaction based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts.

Stock‑Based Compensation

Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black‑Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards.

Compensation cost is recognized over the required service period, generally defined as the vesting period. Compensation cost is recognized on a straight‑line basis over the requisite service period for the entire award. The Company’s accounting policy is to recognize forfeitures as they occur.

Income Taxes

Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

The Company recognizes interest related to income tax matters in interest expense and penalties related to tax matters in income tax expense.

Retirement Plans

Employee 401(k) expense is the amount of matching contributions made by the Company.

Employee Stock Ownership Plan (ESOP)

The cost of shares issued to the ESOP, but not yet allocated to participants, is shown as a reduction of stockholders’ equity. Compensation expense is based on the market price of shares as they are committed to be released to participant accounts. Dividends on allocated ESOP shares reduce retained earnings; dividends on unearned ESOP shares reduce debt and accrued interest.

Earnings (Loss) Per Common Share

Basic earnings (loss) per share of common stock is computed pursuant to the two‑class method by dividing net income available to common stockholders less dividends paid on participating securities (unvested shares of restricted common stock) and any undistributed earnings attributable to participating securities by the weighted average common shares outstanding during the period. The weighted average common shares outstanding includes the weighted average number of shares of common stock outstanding less the weighted average number of unvested shares of restricted common stock. ESOP shares are considered outstanding for this calculation unless unearned. Diluted earnings per share of common stock includes the dilutive effect of unvested stock awards using treasury stock method and additional potential common shares issuable under stock options.

F-10

Table of Contents

Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income (loss) and other comprehensive income or loss. Other comprehensive income or loss includes unrealized gains and losses on securities available‑for‑sale, net of tax, which are also recognized as separate components of equity.

Loss Contingencies

Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable, and an amount or range of loss can be reasonably estimated. Management does not believe that any such matters existed as of the balance sheet date that will have a material effect on the consolidated financial statements.

Fair Value Measurements

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Fair values are estimated using relevant market information and other assumptions, as more fully disclosed in Note 8. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.

Operating Segments

The Company operates as a single segment. The operating information used by management to assess performance and make operating decisions about the Company is the consolidated financial data presented in these financial statements. For the years ended 2020 and 2019, the Company had one active operating subsidiary, Broadway Federal Bank, f.s.b. The Company has determined that banking is its one reportable business segment.

Reclassifications

Some items in the prior year consolidated financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year consolidated net income or stockholders’ equity.

Recently Adopted Accounting Pronouncements

In August 2018, the Federal Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. The ASU was issued to improve the effectiveness of disclosures surrounding fair value measurements. The ASU removes numerous disclosures from Topic 820 including transfers between level 1 and 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation process for level 3 fair value measurements. The ASU also modified and added disclosure requirements regarding changes in unrealized gains and losses included in other comprehensive income, as well as the range and weighted average of unobservable inputs for level 3 fair value measurements. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The guidance did not have a significant impact on the Company's consolidated financial statements.

F-11

Table of Contents

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides optional expedients and exceptions regarding the accounting related to the modifications of certain contracts, relationships and other transactions that are affected by reference rate reform related to contracts that reference LIBOR or other reference rates that could be discontinued due to reference rate reform.  This guidance was effective immediately and the amendments may be applied prospectively through December 31, 2022.

Accounting Pronouncements Yet to Be Adopted –

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”  ASU 2016-13 replaces the incurred loss model with an expected loss model, which is referred to as the current expected credit loss (CECL) model.  The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including loan receivables, held-to-maturity debt securities, and reinsurance receivables. It also applies to off-balance sheet credit exposures not accounted for as insurance (such as loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor.  For debt securities with other-than-temporary impairment, the guidance will be applied prospectively.  Existing purchased credit impaired (PCI) assets will be grandfathered and classified as purchased credit deteriorated (PCD) assets at the date of adoption.  The asset will be grossed up for the allowance for expected credit losses for all PCD assets at the date of adoption and will continue to recognize the noncredit discount in interest income based on the yield of such assets as of the adoption date.  Subsequent changes in expected credit losses will be recorded through the allowance.  For all other assets within the scope of CECL, a cumulative-effect adjustment will be recognized in retained earnings as of the beginning of the first reporting period in which the guidance is effective.

On October 16, 2019, the FASB voted to affirm the proposed amended effective date for ASU 2016-13 for smaller reporting companies (“SRCs”) as defined by the SEC. The final ASU, which was issued in November 2019, delays the implementation date for ASU 2016-13 to fiscal years beginning after December 15, 2022. SRCs are defined as companies with less than $250 million of public float or less than $100 million in annual revenues for the previous year and no public float or public float of less than $700 million.  The Company qualifies as an SRC, and management will implement ASU 2016-13 in the first quarter of 2023.  The estimated financial impact has not yet been determined.

In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.  This ASU is effective January 1, 2020 and clarifies the scope of the credit losses standard and addresses issues related to accrued interest receivable balances, recoveries, variable interest rates and prepayments, among other things. The amendments to Topic 326 have the same effective dates as ASU 2016-13. This guidance did not have a significant impact on the Company's consolidated financial statements.

In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief. This ASU allows entities to irrevocably elect the fair value option on an instrument-by-instrument basis for eligible financial assets measured at amortized cost basis upon adoption of the credit loss standards. The effective date for this ASU is the same as for ASU 2016-13. We will evaluate this ASU in conjunction with ASU 2016-13 to determine its impact on our financial condition and results of operations.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The amendments in this ASU are intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments are also intended to improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. We are currently in the process of evaluating the impact of this ASU on the Company’s consolidated financial statements.

F-12

Table of Contents

NOTE 2 – Pending Acquisition

On August 25, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with CFBanc Corporation, a District of Columbia benefit corporation (“City First”). The Merger Agreement provides that, among other things and subject to the terms and conditions of the Merger Agreement, City First will merge with and into the Company (the “City First Merger”), with the Company surviving and continuing as the surviving entity. At the effective time of the City First Merger, (1) each share of City First’s Class A Common Stock, par value $0.50 per share, and Class B Common Stock, par value $0.50 per share, issued and outstanding immediately prior to the Effective Time (other than any shares owned by City First or the Company and any Dissenting Shares (as defined in the Merger Agreement)) will be converted into 13.626 validly issued, fully paid and nonassessable shares, respectively, of the voting common stock of the Company, par value $0.01 per share, which will be renamed Class A Common Stock, and a new class of non-voting common stock of the Company, par value $0.01 per share, which will be named Class B Common Stock, and (2) each share of Fixed Rate Cumulative Redeemable Perpetual Preferred Stock, Series B, par value $0.50 per share, of City First (“City First Preferred Stock”) issued and outstanding immediately prior to the effective time of the City First Merger will be converted into one validly issued, fully paid and non-assessable share of a new series of preferred stock of the Company, which new series will be designated as the Company’s Fixed Rate Cumulative Redeemable Perpetual Preferred Stock, Series A, with such rights, preferences, privileges and voting powers, and limitations and restrictions thereof, which taken as a whole, are not materially less favorable to the holders of City First Preferred Stock than the rights, preferences, privileges and voting powers, and limitations and restrictions thereof of City First Preferred Stock. Immediately following the City First Merger, the Bank will merge with and into City First Bank of D.C., National Association (“CFB”), a wholly owned subsidiary of City First, with CFB continuing as the surviving entity.

On March 17, 2021, the stockholders of the Company and the stockholders of City First voted to approve the merger as described above. The Company previously announced on January 4, 2021 that all regulatory approvals necessary for consummation of the merger had been obtained.  With stockholder approval now obtained, the merger is expected to close on April 1, 2021.

The unaudited pro forma information in the following table is intended for informational purposes only and is not necessarily indicative of future operating results or operating results that would have occurred had the mergers been completed at the beginning of each respective year.  No assumptions have been applied to the pro forma results of operation regarding possible revenue enhancements, expense efficiencies or asset dispositions.

Period ended,
December 31, 2020 December 31, 2019
(Dollars in thousands, except per share)<br><br> <br>(Unaudited)
Net interest income $ 23,781 $ 23,606
Net income $ 1,571 $ 3,241
Basic earnings per share $ 0.03 $ 0.06
Diluted earnings per share $ 0.03 $ 0.06

Note 3 – Securities

The following table summarizes the amortized cost and fair value of the available‑for‑sale investment securities portfolios at December 31, 2020 and December 31, 2019 and the corresponding amounts of unrealized gains (losses) which are recognized in accumulated other comprehensive income:

Amortized<br><br> <br>Cost Gross<br><br> <br>Unrealized<br><br> <br>Gains Gross<br><br> <br>Unrealized<br><br> <br>Losses Fair Value
(In thousands)
December 31, 2020:
Federal agency mortgage‑backed securities $ 5,550 $ 257 $ - $ 5,807
Federal agency debt 2,682 190 2,872
Municipal bonds 2,000 19 - 2,019
Total available‑for‑sale securities $ 10,232 $ 466 $ - $ 10,698
December 31, 2019:
Federal agency mortgage‑backed securities $ 7,792 $ 164 $ - $ 7,956
Federal agency debt 3,014 36 - 3,050
Total available‑for‑sale securities $ 10,806 $ 200 $ - $ 11,006

F-13

Table of Contents

At December 31, 2020, the Bank had two federal agency debt securities with a total amortized cost of $2.7 million and estimated total fair value of $2.9 million and an estimated average remaining life of 5.0 years. The Bank also had 22 federal agency mortgage‑backed securities with total amortized cost of $5.6 million, estimated total fair value of $5.8 million and an estimated average remaining life of 2.8 years. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.  In 2020, the Bank purchased five municipal bonds with a total amortized cost of $2.0 million, estimated fair value of $2.0 million at December 31, 2020 and an estimated average remaining life of 6.4 years.

At December 31, 2020 and 2019, there were no securities pledged to secure public deposits since those public deposits are under $250 thousand which are fully insured by FDIC. At December 31, 2020 and 2019, there were no holdings of securities by any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

There were no sales of securities during the years ended December 31, 2020 and 2019.

The Bank held 29 and 24 securities with unrealized gains and no securities with unrealized losses at December 31, 2020 and 2019, respectively. Securities in unrealized gain positions are analyzed as part of our ongoing assessment of other‑than‑temporary improvement in fair market values primarily caused by movements in market interest rates subsequent to the purchase of such securities.  All of the Bank's securities were issued by the federal government or federal government agencies, or municipalities.

Note 4 – Loans Receivable Held for Sale

The Bank had no loans held for sale as of December 31, 2020 and 2019.  Multi-family loans held for sale totaling $13.7 million were transferred to the loans held for investment portfolio during 2020 at the lower of cost or fair value.  Loan sales of $22.8 million in multi‑family loans were completed during 2020 for a total gain of $276 thousand. Loan sales of $22.8 million were completed during 2019 for a gain of $204 thousand.  Loan repayments totaled $637 thousand during 2020 and $115 thousand during 2019.

Note 5 – Loans Receivable Held for Investment

Loans receivable held for investment were as follows as of the periods indicated:

December 31, 2020 December 31, 2019
(In thousands)
Real estate:
Single family $ 48,217 $ 72,883
Multi‑family 272,387 287,378
Commercial real estate 24,289 14,728
Church 16,658 21,301
Construction 429 3,128
Commercial – other 57 262
Consumer 7 21
Gross loans receivable before deferred loan costs and premiums 362,044 399,701
Unamortized net deferred loan costs and premiums 1,300 1,328
Gross loans receivable 363,344 401,029
Allowance for loan losses (3,215 ) (3,182 )
Loans receivable, net $ 360,129 $ 397,847

F-14

Table of Contents

The following tables present the activity in the allowance for loan losses by loan type for the periods indicated:

For the year ended December 31, 2020
Real Estate
Single<br><br> <br>family Multi‑<br><br> <br>family Commercial<br><br> <br>real estate Church Construction Commercial<br><br> <br>– other Consumer Total
(In thousands)
Beginning balance $ 312 $ 2,319 $ 133 $ 362 $ 48 $ 7 $ 1 $ 3,182
Provision for (recapture of) loan losses (20 ) 114 89 (125 ) (26 ) (3 ) - 29
Recoveries 4 ‑ ‑ ‑ ‑ ‑ ‑ 4
Loans charged off ‑ ‑ ‑ ‑ ‑ ‑ ‑ ‑
Ending balance $ 296 $ 2,433 $ 222 $ 237 $ 22 $ 4 $ 1 $ 3,215
For the year ended December 31, 2019
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Real Estate
Single<br><br> <br>family Multi‑<br><br> <br>family Commercial<br><br> <br>real estate Church Construction Commercial<br><br> <br>– other Consumer Total
(In thousands)
Beginning balance $ 369 $ 1,880 $ 52 $ 603 $ 19 $ 6 ‑ $ 2,929
Recapture of loan losses (57 ) 439 81 (501 ) 29 1 (7 )
Recoveries ‑ ‑ ‑ 260 ‑ ‑ ‑ 260
Loans charged off ‑ ‑ ‑ ‑ ‑ ‑ ‑ ‑
Ending balance $ 312 $ 2,319 $ 133 $ 362 $ 48 $ 7 $ 3,182

All values are in US Dollars.

The following tables present the balance in the allowance for loan losses and the recorded investment (unpaid contractual principal balance less charge‑offs, less interest applied to principal, plus unamortized deferred costs and premiums) by loan type and based on impairment method as of and for the periods indicated:

December 31, 2020
Real Estate
Single<br><br> <br>family Multi‑<br><br> <br>family Commercial<br> real estate Church Construction Commercial<br><br> <br>– other Consumer Total
(In thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment $ 89 $ - ‑ $ 52 ‑ $ - ‑ $ 141
Collectively evaluated for impairment 207 2,433 185 4 3,074
Total ending allowance balance $ 296 $ 2,433 $ 237 $ 4 $ 3,215
Loans:
Loans individually evaluated for impairment $ 573 $ 298 ‑ $ 3,813 ‑ $ 47 $ 4,731
Loans collectively evaluated for impairment 47,784 273,566 12,495 9 358,613
Total ending loans balance $ 48,357 $ 273,864 $ 16,308 $ 56 $ 363,344

All values are in US Dollars.

F-15

Table of Contents

December 31, 2019
Real Estate
Single<br><br> <br>family Multi‑<br> family Commercial<br> real estate Church Construction Commercial<br><br> <br>– other Consumer Total
(In thousands)
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment $ 60 ‑ ‑ $ 85 ‑ $ 2 ‑ $ 147
Collectively evaluated for impairment 252 277 5 3,035
Total ending allowance balance $ 312 $ 362 $ 7 $ 3,182
Loans:
Loans individually evaluated for impairment $ 611 ‑ $ 4,356 ‑ $ 63 ‑ $ 5,343
Loans collectively evaluated for impairment 72,501 16,292 199 395,686
Total ending loans balance $ 73,112 $ 20,648 $ 262 $ 401,029

All values are in US Dollars.

The following table presents information related to loans individually evaluated for impairment by loan type as of the periods indicated:

December 31, 2020 December 31, 2019
Unpaid<br><br> <br>Principal<br><br> <br>Balance Recorded<br><br> <br>Investment Allowance<br><br> <br>for Loan<br><br> <br>Losses<br><br> <br>Allocated Unpaid<br><br> <br>Principal<br><br> <br>Balance Recorded<br><br> <br>Investment Allowance<br> for Loan<br> Losses<br> Allocated
(In thousands)
With no related allowance recorded:
Single‑family $ 2 $ 1 $ - $ - $ - ‑
Multi‑family 298 298 - 313 313 ‑
Church 2,527 1,970 - 3,491 2,446 ‑
With an allowance recorded:
Single family 573 573 88 593 593
Multi‑family ‑ ‑ ‑ ‑ ‑ ‑
Church 1,842 1,842 52 1,928 1,928
Commercial – other 47 47 1 63 63
Total $ 5,289 $ 4,731 $ 141 $ 6,388 $ 5,343

All values are in US Dollars.

The recorded investment in loans excludes accrued interest receivable due to immateriality. For purposes of this disclosure, the unpaid principal balance is not reduced for net charge‑offs.

The following tables present the monthly average of loans individually evaluated for impairment by loan type and the related interest income for the periods indicated:

For the year ended December 31, 2020 For the year ended December 31, 2019
Average<br><br> <br>Recorded<br><br> <br>Investment Cash Basis<br><br> <br>Interest<br><br> <br>Income<br><br> <br>Recognized Average<br><br> <br>Recorded<br><br> <br>Investment Cash Basis<br><br> <br>Interest<br><br> <br>Income<br><br> <br>Recognized
(In thousands)
Single family $ 591 $ 29 $ 626 $ 29
Multi‑family 306 21 318 22
Church 4,033 442 5,017 939
Commercial – other 55 4 63 5
Total $ 4,985 $ 496 $ 6,024 $ 995

Cash‑basis interest income recognized represents cash received for interest payments on accruing impaired loans and interest recoveries on non‑accrual loans that were paid off. Interest payments collected on non‑accrual loans are characterized as payments of principal rather than payments of the outstanding accrued interest on the loans until the remaining principal on the non‑accrual loans is considered to be fully collectible or paid off. When a loan is returned to accrual status, the interest payments that were previously applied to principal are deferred and amortized over the remaining life of the loan. Foregone interest income that would have been recognized had loans performed in accordance with their original terms amounted to $89 thousand and $120 thousand for the years ended December 31, 2020 and 2019, respectively, and were not included in the consolidated results of operations.

F-16

Table of Contents

The following tables present the aging of the recorded investment in past due loans by loan type as of the periods indicated:

December 31, 2020
30‑59<br><br> <br>Days<br><br> <br>Past Due 60‑89<br><br> <br>Days<br><br> <br>Past Due Greater than<br><br> <br>90 Days<br><br> <br>Past Due Total<br><br> <br>Past Due Current Total
(In thousands)
Loans receivable held for investment:
Single family $ - $ ‑ $ ‑ $ - $ 48,357 $ 48,357
Multi‑family ‑ ‑ ‑ ‑ 273,864 273,864
Commercial real estate ‑ ‑ ‑ ‑ 24,322 24,322
Church ‑ ‑ ‑ ‑ 16,308 16,308
Construction ‑ ‑ ‑ ‑ 430 430
Commercial – other ‑ ‑ ‑ ‑ 56 56
Consumer ‑ ‑ ‑ ‑ 7 7
Total $ - $ ‑ $ ‑ $ - $ 363,344 $ 363,344
December 31, 2019
--- --- --- --- --- --- --- --- --- --- --- --- ---
30‑59<br><br> <br>Days<br><br> <br>Past Due 60‑89<br><br> <br>Days<br><br> <br>Past Due Greater than<br><br> <br>90 Days<br><br> <br>Past Due Total<br><br> <br>Past Due Current Total
(In thousands)
Loans receivable held for investment:
Single family $ 18 $ ‑ $ ‑ $ 18 $ 73,094 $ 73,112
Multi‑family ‑ ‑ ‑ ‑ 289,043 289,043
Commercial real estate ‑ ‑ ‑ ‑ 14,818 14,818
Church ‑ ‑ ‑ ‑ 20,648 20,648
Construction ‑ ‑ ‑ ‑ 3,125 3,125
Commercial – other ‑ ‑ ‑ ‑ 262 262
Consumer ‑ ‑ ‑ ‑ 21 21
Total $ 18 $ ‑ $ ‑ $ 18 $ 401,011 $ 401,029

The following table presents the recorded investment in non‑accrual loans by loan type as of the periods indicated:

December 31, 2020 December 31, 2019
Loans receivable held for investment: (In thousands)
Single family $ 1 $ 18
Church 786 406
Total non-accrual loans $ 787 $ 424

There were no loans 90 days or more delinquent that were accruing interest as of December 31, 2020 or December 31, 2019.

Troubled Debt Restructurings

At December 31, 2020, loans classified as troubled debt restructurings (“TDRs”) totaled $4.2 million, of which $232 thousand were included in non‑accrual loans and $4.0 million were on accrual status. At December 31, 2019, loans classified as TDRs totaled $4.7 million, of which $406 thousand were included in non‑accrual loans and $4.3 million were on accrual status. The Company has allocated $141 thousand and $147 thousand of specific reserves for accruing TDRs as of December 31, 2020 and 2019, respectively. TDRs on accrual status are comprised of loans that were accruing at the time of restructuring or loans that have complied with the terms of their restructured agreements for a satisfactory period and for which the Bank anticipates full repayment of both principal and interest. TDRs that are on non‑accrual status can be returned to accrual status after a period of sustained performance, generally determined to be six months of timely payments, as modified. A well‑documented credit analysis that supports a return to accrual status based on the borrower’s financial condition and prospects for repayment under the revised terms is also required. As of December 31, 2020 and 2019, the Company had no commitment to lend additional amounts to customers with outstanding loans that are classified as TDRs. No loans were modified during the years ended December 31, 2020 and 2019.

F-17

Table of Contents

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. For single family residential, consumer and other smaller balance homogenous loans, a credit grade is established at inception, and generally only adjusted based on performance. Information about payment status is disclosed elsewhere herein. The Company analyzes all other loans individually by classifying the loans as to credit risk. This analysis is performed at least on a quarterly basis. The Company uses the following definitions for risk ratings:

● Watch. Loans classified as watch exhibit weaknesses that could threaten the current net worth and paying capacity of the obligors. Watch graded loans are generally performing<br> and are not more than 59 days past due. A watch rating is used when a material deficiency exists, but correction is anticipated within an acceptable time frame.
● Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may<br> result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.
--- ---
● Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans<br> so classified have a well‑defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
--- ---
● Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or<br> liquidation in full, based on currently existing facts, conditions, and values, highly questionable and improbable.
--- ---
● Loss. Loans classified as loss are considered uncollectible and of such little value that to continue to carry the loan as an active asset is no longer warranted.
--- ---

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Pass rated loans are generally well protected by the current net worth and paying capacity of the obligor and/or by the value of the underlying collateral. Pass rated loans are not more than 59 days past due and are generally performing in accordance with the loan terms. Based on the most recent analysis performed, the risk categories of loans by loan type as of the periods indicated were as follows:

December 31, 2020
Pass Watch Special Mention Substandard Loss
(In thousands)
Single family $ 48,357 $ - $ - $ 1 $ ‑
Multi‑family 273,501 - ‑ 362 ‑
Commercial real estate 22,834 1,488 ‑ ‑ ‑
Church 12,899 657 ‑ 2,752 ‑
Construction 430 - ‑ ‑ ‑
Commercial – other 9 - ‑ 47 ‑
Consumer 7 - ‑ ‑
Total $ 358,037 $ 2,145 $ - $ 3,162 $ ‑

All values are in US Dollars.

December 31, 2019
Pass Watch Special Mention Substandard Loss
(In thousands)
Single family $ 73,094 $ - $ - $ 18 $ ‑
Multi‑family 288,251 411 ‑ 381 ‑
Commercial real estate 14,818 ‑ ‑ ‑
Church 16,546 411 ‑ 3 691 ‑
Construction 3,125 - ‑ ‑ ‑
Commercial – other 199 - ‑ 63 ‑
Consumer 21 - ‑ ‑ ‑
Total $ 396,054 $ 822 $ - $ 4,153 $ ‑

All values are in US Dollars.

F-18

Table of Contents

Note 6 – Office Properties and Equipment, net

Year‑end office properties and equipment were as follows:

2020 2019
(In thousands)
Land $ 572 $ 572
Office buildings and improvements 3,275 3,268
Rights of use assets 190 727
Furniture, fixtures and equipment 2,239 1,831
6,276 6,398
Less accumulated depreciation (3,736 ) (3,615 )
Office properties and equipment, net $ 2,540 $ 2,783

Depreciation expense was $121 thousand and $227 thousand for the years 2020 and 2019, respectively.

Note 7 – Leases

The Bank has a combined operating lease for its corporate headquarters and main retail branch and a photocopier lease. The ROU asset and operating lease liability are recorded in fixed assets and other liabilities, respectively, in the consolidated statements of financial condition.

Our ROU asset represents our right to use an underlying asset during the lease term. Operating lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate at the date of implementation of the new accounting standard.

The operating lease for our corporate headquarters and main retail branch has one 5-year extension option at the then fair market rate. As this extension option is not reasonably certain of exercise, it is not included in the lease term. The Bank recorded a ROU asset of $190 thousand and an operating lease liability of $194 thousand as of December 31, 2020. The Bank has no finance leases.

Rent expense under the operating leases was $598 thousand for 2020 and $600 thousand for 2019.

Additional information regarding our operating leases is summarized below for the periods indicated dollars in thousands):

Year Ended<br><br> <br>December 31, 2020
Cash paid for amounts included in the measurement of  lease liabilities for operating leases: $ 351
ROU assets obtained in exchange for lease liabilities $ 190
Weighted average remaining lease term in months 4
Weighted average discount rate 2.75 %

The future minimum payments for operating leases with remaining terms of one year or more as of December 31, 2020 were as follows (in thousands):

Year ended December 31, 2021 $ 195
Total Future Minimum Lease Payments 195
Amounts Representing Interest (1 )
Present Value of Net Future Minimum Lease Payments $ 194

F-19

Table of Contents

Note 8 – Fair Value

The Company used the following methods and significant assumptions to estimate fair value:

The fair values of securities available‑for‑sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

The fair value of impaired loans that are collateral dependent is generally based upon the fair value of the collateral, which is obtained from recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

Assets acquired through or by transfer in lieu of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at the lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals which are updated every nine months. These appraisals may utilize a single valuation approach or a combination of approaches, including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Real estate owned properties are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

Appraisals for collateral‑dependent impaired loans are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, an independent third‑party licensed appraiser reviews the appraisals for accuracy and reasonableness, reviewing the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry‑wide statistics.

Assets Measured on a Recurring Basis

Assets measured at fair value on a recurring basis are summarized below:

Fair Value Measurement
Quoted Prices<br><br> <br>in Active<br><br> <br>Markets for<br><br> <br>Identical<br><br> <br>Assets<br><br> <br>(Level 1) Significant<br><br> <br>Other<br><br> <br>Observable<br><br> <br>Inputs<br><br> <br>(Level 2) Significant<br><br> <br>Unobservable<br><br> <br>Inputs<br><br> <br>(Level 3) Total
(In thousands)
At December 31, 2020:
Securities available‑for‑sale – federal agency mortgage‑backed $ - $ 5,807 $                    ‑ $ 5,807
Municipal bonds - 2,019 2,019
Securities available‑for‑sale – federal agency debt - 2,872 ‑ 2,872
At December 31, 2019: -
Securities available‑for‑sale – federal agency mortgage‑backed $ - $ 7,956 $                   ‑ $ 7,956
Securities available‑for‑sale – federal agency debt - 3,050 ‑ 3,050

There were no transfers between Level 1, Level 2, or Level 3 during the years ended December 31, 2020 and 2019.

Assets Measured on a Non‑Recurring Basis

Assets are considered to be reflected at fair value on a non‑recurring basis if the fair value measurement of the instrument does not necessarily result in a change in the amount recorded on the statement of condition. Generally, a non‑recurring valuation is the result of the application of other accounting pronouncements that require assets to be assessed for impairment or recorded at the lower of cost or fair value.

F-20

Table of Contents

The following table provides information regarding the carrying values of our assets measured at fair value on a non‑recurring basis as of the periods indicated. The fair value measurement for all these assets falls within Level 3 of the fair value hierarchy.

December 31, 2020 December 31, 2019
(In thousands)
Impaired loans carried at fair value of collateral $ - $ 130

Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments as of the periods indicated were as follows:

Carrying Fair Value Measurements at December 31, 2020
Value Level 1 Level 2 Level 3 Total
(In thousands)
Financial Assets:
Cash and cash equivalents $ 96,109 $ 96,109 $ - $ - $ 96,109
Securities available‑for‑sale 10,698 - 10,698 - 10,698
Loans receivable held for investment 360,129 - - 366,279 366,279
Accrued interest receivable 1,202 60 14 1,128 1,202
Bank owned life insurance 5,633 5,633 - - 5,633
Financial Liabilities:
Deposits $ 315,630 $ - $ 312,725 $ - $ 312,725
Federal Home Loan Bank advances 110,500 113,851 - 113,851
Junior subordinated debentures 3,315 - 2,798 2,798
Accrued interest payable 88 - 84 4 88

F-21

Table of Contents

Carrying Fair Value Measurements at December 31, 2019
Value Level 1 Level 2 Level 3 Total
(In thousands)
Financial Assets:
Cash and cash equivalents $ 15,566 $ 15,566 $ - $ - $ 15,566
Securities available‑for‑sale 11,006 - 11,006 - 11,006
Loans receivable held for sale - -
Loans receivable held for investment 397,847 - - 404,923 404,923
Accrued interest receivable 1,223 69 22 1,132 1,223
Bank owned life insurance 5,220 5,220 - - 5,220
Financial Liabilities:
Deposits $ 297,724 $ - $ 289,629 $ - $ 289,629
Federal Home Loan Bank advances 84,000 - 84,997 - 84,997
Junior subordinated debentures 4,335 - - 3,734 3,734
Accrued interest payable 384 - 377 7 384

Note 9 – Deposits

Deposits are summarized as follows:

` December 31,
2020 2019
(In thousands)
NOW account and other demand deposits $ 15,237 $ 9,768
Non‑interest bearing demand deposits 47,269 27,090
Money market deposits 60,281 23,589
Passbook 64,127 47,042
Certificates of deposit 128,716 190,235
Total $ 315,630 $ 297,724

The Bank accepts two types of deposits from a deposit placement service called the Certificate of Deposit Account Registry Service (“CDARS”). Reciprocal deposits are the Bank’s own retail deposits in amounts in excess of the insured limits. The CDARS program allows banks to place their customers’ funds in FDIC‑insured certificates of deposit at other banks and, at the same time, receive an equal sum of funds from the customers of other banks in the CDARS Network. These deposits totaled $35.8 million and $39.3 million at December 31, 2020 and 2019, respectively and are not considered to be brokered deposits.

One‑way deposits are also available using the CDARS program. With the one‑way program, the Bank accepts deposits from CDARS even though there is no customer account involved. These one-way deposits, which are considered to brokered deposits, totaled $9.6 million and $40.7 million at December 31, 2020 and 2019, respectively.

At December 31, 2020, the Bank had $15.1 million in (non-CDARS) brokered deposits and did not have any (non-CDARS) brokered deposits at December 31, 2019.

Scheduled maturities of certificates of deposit for the next five years are as follows:

Maturity Amount
(In thousands)
2021 $ 113,221
2022 13,095
2023 1,809
2024 271
2025 245
Thereafter 75
$ 128,716

Certificates of deposit of $250 thousand or more totaled $18.9 million and $25.1 million at December 31, 2020 and 2019, respectively.

Deposits from principal officers, directors, and their affiliates totaled $838 thousand and $1.8 million at December 31, 2020 and 2019, respectively.

F-22

Table of Contents

Note 10 – Federal Home Loan Bank Advances

The following table summarizes information relating to FHLB advances at or for the periods indicated:

At or For the Year Ended
2020 2019
(Dollars in thousands)
FHLB Advances:
Average balance outstanding during the year $ 114,020 $ 77,049
Maximum amount outstanding at any month‑end during the year $ 121,500 $ 84,000
Balance outstanding at end of year $ 110,500 $ 84,000
Weighted average interest rate at end of year 1.94 % 2.32 %
Average cost of advances during the year 1.91 % 2.42 %
Weighted average contractual maturity (in months) 27 18

Each advance is payable at its maturity date, with a prepayment penalty. The advances were collateralized by $220.0 million and $156.1 million of first mortgage loans at December 31, 2020 and 2019, respectively, under a blanket lien arrangement.  Based on this collateral, the Company’s holdings of FHLB stock, and a general borrowing limit of 40% of total assets at December 31, 2020, the Company was eligible to borrow up to an additional $40.3 million at year‑end 2020.

Required payments over the next five years are as follows:

Amount
(In thousands)
2021 $ 27,500
2022 18,000
2023 30,000
2024 5,000
2025 30,000
$ 110,500

Note 11 – Junior Subordinated Debentures

On March 17, 2004, the Company issued $6.0 million of Floating Rate Junior Subordinated Debentures (the “Debentures”) in a private placement to a trust that was capitalized to purchase subordinated debt and preferred stock of multiple community banks. Interest on the Debentures is payable quarterly at a rate per annum equal to the 3‑Month LIBOR plus 2.54%. The interest rate is determined as of each March 17, June 17, September 17, and December 17, and was 2.77% at December 31, 2020. On October 16, 2014, the Company made payments of $900 thousand of principal on Debentures, executed a Supplemental Indenture for the Debentures that extended the maturity of the Debentures to March 17, 2024, and modified the payment terms of the remaining $5.1 million principal amount thereof. The modified terms of the Debentures require quarterly payments of interest only through March 2019 at the original rate of 3‑Month LIBOR plus 2.54%. Starting in June 2019, the Company began making quarterly payments of equal amounts of principal, plus interest, and will continue until the Debentures are fully amortized on March 17, 2024.  At December 31, 2020, the Company had repaid a total of $1.8 million of the scheduled principal.  The Debentures may be called for redemption at any time by the Company.

Scheduled principal repayments of junior subordinated debentures over the next four years are as follows:

Amount
(In thousands)
2021 $ 1,020
2022 1,020
2023 1,020
2024 255
$ 3,315

F-23

Table of Contents

Note 12 – Employee Benefit Plans

Broadway Federal 401(k) Plan

A 401(k) benefit plan allows employee contributions for substantially all employees up to 15% of their compensation, which are matched at a rate equal to 50% of the first 6% of the compensation contributed. Expense totaled $146 thousand and $135 thousand for 2020 and 2019.

ESOP Plan

Employees participate in an Employee Stock Option Plan (“ESOP”) after attaining certain age and service requirements. In December 2016, the ESOP purchased 1,493,679 shares of the Company’s common stock at $1.59 per share, for a total cost of $2.4 million, of which $1.2 million was funded with a loan from the Company. The loan will be repaid from the Bank’s annual discretionary contributions to the ESOP, net of dividends paid, over a period of 20 years. Shares of the Company’s common stock purchased by the ESOP are held in a suspense account until released for allocation to participants. When loan payments are made, shares are allocated to each eligible participant based on the ratio of each such participant’s compensation, as defined in the ESOP, to the total compensation of all eligible plan participants. As the unearned shares are released from the suspense account, the Company recognizes compensation expense equal to the fair value of the ESOP shares during the periods in which they become committed to be released. To the extent that the fair value of the ESOP shares released differs from the cost of such shares, the difference is charged or credited to equity as additional paid‑in capital. Dividends on allocated shares increase participant accounts. Dividends on unallocated shares will be used to repay the loan. At the end of employment, participants will receive shares for their vested balance. Compensation expense related to the ESOP was $68 thousand for 2020 and $65 thousand for 2019.

Shares held by the ESOP were as follows:

December 31,<br><br> <br>2020 December 31,<br><br> <br>2019
(Dollars in thousands)
Allocated to participants 1,065,275 1,024,429
Committed to be released 10,236 10,416
Suspense shares 562,391 603,876
Total ESOP shares 1,637,902 1,638,721
Fair value of unearned shares $ 1,040 $ 930

During 2020 and 2019, 41,665 and 42,321 of ESOP shares were released for allocation to participants, respectively. The outstanding balance of unearned ESOP shares at December 31, 2020 and 2019 were $893 thousand and $959 thousand, respectively, which is shown as Unearned ESOP shares in the equity section of the consolidated statements of financial condition.

Note 13 – Income Taxes

The Company and its subsidiary are subject to U.S. federal and state income taxes. Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

F-24

Table of Contents

Income tax (benefit) expense was as follows:

2020 2019
(In thousands)
Current
Federal $ (59 ) $ (66 )
State 144 5
Deferred
Federal 7 (225 )
State (499 ) (59 )
Total $ (407 ) $ (345 )

Effective tax rates differ from the federal statutory rate of 21% applied to income before income taxes due to the following:

2020 2019
(In thousands)
Federal statutory rate times financial statement net (loss) income $ (220 ) $ (115 )
Effect of:
State taxes, net of federal benefit (7 ) (45 )
Earnings from bank owned life insurance (10 ) (11 )
Merger-related expense 200 -
Low income housing credits (117 ) (198 )
Tax benefit from tax positions taken in prior years (273 ) -
Other, net 20 24
Total $ (407 ) $ (345 )

Year‑end deferred tax assets and liabilities were due to the following:

2020 2019
(In thousands)
Deferred tax assets:
Allowance for loan losses $ 909 $ 897
Accrued liabilities 139 137
State income taxes 58 36
Stock compensation 310 202
Net operating loss carryforward 3,437 3,614
Non‑accrual loan interest 1 1
Partnership investment 188 173
General business credit 1,969 1,859
Alternative minimum tax credit 34 94
Other 40 34
Total deferred tax assets 7,085 7,047
Deferred tax liabilities:
Section 481 Adjustments to bad debts (334 ) (660 )
Deferred loan fees/costs (651 ) (797 )
Basis difference on fixed assets (18 ) (15 )
Net unrealized appreciation on available‑for‑sale securities (138 ) (59 )
FHLB stock dividends (266 ) (266 )
Mortgage servicing rights (1 ) (3 )
Prepaid expenses (44 ) (27 )
Total deferred tax liabilities (1,452 ) (1,827 )
Net deferred tax assets $ 5,633 $ 5,220

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. In assessing the realization of deferred tax assets, management evaluated both positive and negative evidence, the amount of taxes paid in available carry‑back years, and the forecasts of future income and tax planning strategies. Based on this analysis, the Company determined that, as of December 31, 2020 and 2019, no valuation allowance was required on its deferred tax assets, which totaled $5.6 million and $5.2 million, respectively.

F-25

Table of Contents

On June 29, 2020, the Assembly Bill No. 85 (AB 85) was signed into law by California Governor Gavin Newsom to raise additional income tax revenue to assist in balancing the California budget caused by the COVID-19 pandemic. The most significant provision of this bill is the suspension of the net operating loss (NOL) deduction for tax years beginning on or after January 1, 2020 and before January 1, 2023. The existing 20-year carry forward period for NOLs (10 years for losses incurred in the tax years 2000 through 2007) would be extended for up to three years if losses are not used due to the NOL suspension. This means the Bank cannot take California NOL deductions for 2020-2022 if its California taxable income is more than $1 million. The life of the 2011 NOL will be extended for up to three years. This also means the Bank could have more cash tax liability for 2020-2022.

As of December 31, 2020, the Company had federal net operating loss carryforwards of $5.4 million and California net operating loss carryforwards of $27.0 million, which begin expiring in 2032 through 2037 and 2032 through 2037, respectively. The Company also has federal general business credits of $2.0 million, expiring beginning in 2030 through 2040.

Prior to 2018, the Company computed its bad debt deduction for income tax purposes under the reserve method. In 2018, the Company requested, and the IRS consented to a change in accounting method used for computing its tax bad debt deduction from the reserve method to the charge-off method as defined under Internal Revenue Code Section 166. As a result, the Company computes its tax bad debt deduction under the new method and recaptures its excess tax bad debt reserve of $4.3 million into taxable income evenly over a 4 year period starting in 2018.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

2020 2019
(In thousands)
Balance at beginning of year $ 475 $ 475
Additions for tax positions of current year - -
Additions for tax positions of prior year - -
Reductions for tax positions of prior years (475 ) ‑
Balance at end of year $ - $ 475

At December 31, 2020 and 2019, the Company had zero and $475 thousand in unrecognized tax benefits, respectively. During the second quarter of 2020, the Company recognized an income tax benefit of $273 thousand as a result of a favorable settlement of uncertain tax positions with the California Franchise Tax Board (“FTB”). During 2020 and 2019, zero and $8 thousand were accrued during each period for potential interest related to these unrecognized tax benefits, respectively.

Federal tax years 2017 through 2020 remain open for the assessment of Federal income tax. California tax years 2016 through 2020 remain open for the assessment of California franchise tax. The Company was under examination by California FTB for the 2009, 2010, and 2011 tax years. On July 15, 2020, the examination closing agreement was executed by the Company and California FTB, which resulted in a favorable settlement. The Company recognized a tax benefit of $273 thousand in 2020.

Note 14 – Stock‑Based Compensation

Prior to July 25, 2018, the Company issued stock‑based compensation awards to its directors and employees under the 2008 Long‑Term Incentive Plan (“2008 LTIP”). The 2008 LTIP permitted the grant of non‑qualified and incentive stock options, stock appreciation rights, full value awards and cash incentive awards for up to 2,000,000 shares of common stock. As of July 25, 2018, the Company ceased granting awards under the 2008 LTIP.

On July 25, 2018, the stockholders approved the 2018 Long‑Term Incentive Plan (“2018 LTIP”). As with the 2008 LTIP, the 2018 LTIP permits the grant of non‑qualified and incentive stock options, stock appreciation rights, full value awards and cash incentive awards. The plan will be in effect for ten years. The maximum number of shares that can be awarded under the plan is 1,293,109 shares of common stock. As of December 31, 2020, 170,335 shares had been awarded and 663,842 shares are available under the 2018 LTIP.

No stock options were granted during the years ended December 31, 2020 and December 31, 2019.

F-26

Table of Contents

The following table summarizes stock option activity during the years ended December 31, 2020 and 2019:

2020 2019
Number<br><br> <br>Outstanding Weighted<br><br> <br>Average<br><br> <br>Exercise<br><br> <br>Price Number<br><br> <br>Outstanding Weighted<br><br> <br>Average<br><br> <br>Exercise<br><br> <br>Price
Outstanding at beginning of year 455,000 $ 1.67 537,500 $ 2.19
Granted during the year ‑ ‑ ‑ ‑
Exercised during the year ‑ ‑ ‑ ‑
Forfeited or expired during the year (5,000 ) 6.00 (82,500 ) 4.98
Outstanding at end of year 450,000 $ 1.62 455,000 $ 1.67
Exercisable at end of year 360,000 $ 1.62 275,000 $ 1.70

For each year of 2020 and 2019, the Company recorded $39 thousand and $38 thousand, respectively, of stock‑based compensation expense related to stock options. As of December 31, 2020, unrecognized compensation cost related to non-vested stock options granted under the plan was $7 thousand. The cost is expected to be recognized over a period of two months.

Options outstanding and exercisable at year‑end 2020 were as follows:

Outstanding Exercisable
Grant Date Number<br><br> <br>Outstanding Weighted<br><br> <br>Average<br><br> <br>Remaining<br><br> <br>Contractual<br><br> <br>Life Weighted<br><br> <br>Average<br><br> <br>Exercise<br><br> <br>Price Aggregate<br><br> <br>Intrinsic<br><br> <br>Value Number<br><br> <br>Outstanding Weighted<br><br> <br>Average<br><br> <br>Exercise<br><br> <br>Price Aggregate<br><br> <br>Intrinsic<br><br> <br>Value
February 24, 2016 450,000 5.15 years $ 1.62 360,000 $ 1.62
450,000 5.15 years $ 1.62 $ 103,500 360,000 $ 1.62 $ 82,800

In February 2020 and January 2019, the Company awarded 30,930 and 42,168 shares of common stock, respectively, to its directors under the 2018 LTIP, which are fully vested.  The Company recorded $45 thousand and $52 thousand of compensation expense for the years ended December 31, 2020 and December 31, 2019, respectively, based on the fair value of the stock, which was determined using the average of the high and the low price of the stock on the date of the award.

In February 2020 and 2019, the Company awarded 140,218 shares and 428,797 shares, of which $12,846 shares were forfeited, respectively, of restricted stock to its officers and employees under the 2018 LTIP.  Each restricted stock award is valued based on the fair value of the stock, which was determined using the average of the high and the low price of the stock on the date of the award.  These awarded shares of restricted stock are fully vested over a two-year period from their respective dates of grants. Stock based compensation expense is recognized on a straight-line basis over the vesting period.  During 2020 and 2019, the Company recorded $340 thousand and $216 thousand of stock based compensation expense related to these awards, respectively. As of December 31, 2020, unrecognized compensation costs related to non-vested restricted stock awarded in February 2020 and 2019 were $110 thousand and $43 thousand, respectively.  These unrecognized compensation costs related to non-vested restricted stock awarded in February 2020 and 2019 are expected to be recognized over a period of 14 months and 2 months, respectively.  However, 140,218 shares scheduled to vest in February 2022 will become fully vested upon the closing of the City First Merger, which is expected to occur on April 1, 2021.

Note 15 – Capital and Regulatory Matters

The Bank’s capital requirements are administered by the Office of the Comptroller of the Currency (“OCC”) and involve quantitative measures of assets, liabilities, and certain off‑balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by the OCC. Failure to meet capital requirements can result in regulatory action.

The federal banking regulators approved final capital rules (“Basel III Capital Rules”) in July 2013 implementing the Basel III framework as well as certain provisions of the Dodd‑Frank Act. The Basel III Capital Rules prescribe a standardized approach for calculating risk‑weighted assets and revised the definition and calculation of Tier 1 capital and Total Capital, and include a new Common Equity Tier 1 capital (“CET1”) measure. Under the Basel III Capital Rules, the currently effective minimum capital ratios are:

F-27

Table of Contents

• 4.5% CET1 to risk‑weighted assets;
• 6.0% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk‑weighted assets;
--- ---
• 8.0% Total capital (that is, Tier 1 capital plus Tier 2 capital) to risk‑weighted assets; and
--- ---
• 4.0% Tier 1 capital to average consolidated assets (known as the “leverage ratio”).
--- ---

A capital conservation buffer was also established above the regulatory minimum capital requirements. This capital conservation buffer was phased in beginning January 1, 2016 at 0.625% of risk‑weighted assets and increased each subsequent year by an additional 0.625% until it reached its final level of 2.5% on January 1, 2019.

The Basel III Capital rules also contained revisions to the prompt corrective action framework, which are designed to place restrictions on insured depository institutions if their capital levels begin to show signs of weakness. Under the prompt corrective action requirements, which are designed to complement the capital conservation buffer, insured depository institutions are now required to meet the following increased capital level requirements in order to qualify as “well capitalized”: (i) a CET1 capital ratio of 6.5%; (ii) a Tier 1 capital ratio of 8% (increased from 6%); (iii) a total capital ratio of 10% (unchanged from previous rules); and (iv) a Tier 1 leverage ratio of 5% (unchanged from previous rules).

The Basel III Capital Rules became effective for the Bank on January 1, 2015. At December 31, 2020 and 2019, the Bank’s level of capital exceeded all regulatory capital requirements and its regulatory capital ratios were above the minimum levels required to be considered well capitalized for regulatory purposes. Actual and required capital amounts and ratios as of the periods indicated are presented below.

Actual Minimum Capital<br><br> <br>Requirements Minimum Required<br><br> <br>To Be Well<br><br> <br>Capitalized Under<br><br> <br>Prompt Corrective<br><br> <br>Action Provisions
Amount Ratio Amount Ratio Amount Ratio
(Dollars in thousands)
December 31, 2020:
Tier 1 (Leverage) $ 46,565 9.54 % $ 19,530 4.00 % $ 24,413 5.00 %
Common Equity Tier 1 $ 46,565 18.95 % $ 11,059 4.50 % $ 15,975 6.50 %
Tier 1 $ 46,565 18.95 % $ 14,746 6.00 % $ 19,661 8.00 %
Total Capital $ 49,802 20.20 % $ 19,661 8.00 % $ 24,577 10.00 %
December 31, 2019:
Tier 1 (Leverage) $ 48,541 11.56 % $ 16,798 4.00 % $ 20,997 5.00 %
Common Equity Tier 1 $ 48,541 17.14 % $ 12,743 4.50 % $ 18,406 6.50 %
Tier 1 $ 48,541 17.14 % $ 16,990 6.00 % $ 22,654 8.00 %
Total Capital $ 51,790 18.29 % $ 22,654 8.00 % $ 28,318 10.00 %

Note 16 – Loan Commitments and Other Related Activities

Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off‑balance‑sheet risk for credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.

The contractual amounts of financial instruments with off‑balance‑sheet risk at year‑end were as follows:

2020 2019
(In thousands)
Commitments to make loans $ - $ 5,930
Unused lines of credit – variable rates 2,472 1,970

Commitments to make loans are generally made for periods of 60 days or less. At December 31, 2020, the Bank did not have any commitment outstanding to originate multi-family residential loans.  At December 31, 2019, loan commitments consisted of two multi‑family residential loans with initial five-year interest rates ranging from 3.50% to 3.75%.

F-28

Table of Contents

Note 17 – Parent Company Only Condensed Financial Information

Condensed financial information of Broadway Financial Corporation follows:

Condensed Balance Sheet

December 31,

2020 2019
(In thousands)
Assets
Cash and cash equivalents $ 126 $ 134
Investment in bank subsidiary 49,418 50,594
Other assets 2,735 2,512
Total assets $ 52,279 $ 53,240
Liabilities and stockholders’ equity
Junior subordinated debentures $ 3,315 $ 4,335
Accrued expenses and other liabilities 79 57
Stockholders’ equity 48,885 48,848
Total liabilities and stockholders’ equity $ 52,279 $ 53,240

Condensed Statements of Income

Years ended December 31,

2020 2019
(In thousands)
Interest income $ 23 $ 23
Interest expense (133 ) (247 )
Other expense (1,033 ) (720 )
Loss before income tax and undistributed subsidiary income (1,143 ) (944 )
Income tax benefits 291 279
Equity in undistributed subsidiary income 210 459
Net loss $ (642 ) $ (206 )

F-29

Table of Contents

Condensed Statements of Cash Flows

Years ended December 31,

2020 2019
(In thousands)
Cash flows from operating activities
Net loss $ (642 ) $ (206 )
Adjustments to reconcile net loss to net cash used in operating activities:
Equity in undistributed subsidiary income (210 ) (459 )
Change in other assets (223 ) (287 )
Change in accrued expenses and other liabilities 21 (9 )
Net cash used in operating activities (1,054 ) (961 )
Cash flows from investing activities
Dividends from bank subsidiary 2,000 1,650
Net cash provided by investing activities 2,000 1,650
Cash flows from financing activities
Common stock repurchased for tax withholdings - (14 )
Repayments of borrowings (1,020 ) (765 )
Proceeds from repayment of ESOP loan 66 68
Net cash used in financing activities (954 ) (711 )
Net change in cash and cash equivalents (8 ) (22 )
Beginning cash and cash equivalents 134 156
Ending cash and cash equivalents $ 126 $ 134

Note 18 – Loss Per Common Share

The factors used in the earnings per common share computation follow:

2020 2019
(Dollars in thousands,<br><br> <br>except share and per share)
Net loss $ (642 ) $ (206 )
Less net income attributable to participating securities - -
Loss available to common stockholders $ (642 ) $ (206 )
Weighted average common shares outstanding for basic earnings per common share 27,163,427 26,833,693
Add: dilutive effects of unvested restricted stock awards - -
Weighted average common shares outstanding for diluted earnings per common share 27,163,427 26,833,693
Loss per common share – basic $ (0.02 ) $ (0.01 )
Loss per common share – diluted $ (0.02 ) $ (0.01 )

Stock options for 360,000 shares and 275,000 shares of common stock for the years ended December 31, 2020 and 2019, respectively, were not considered in computing diluted earnings per common share because they were anti‑dilutive.

Basic loss per share of common stock is computed pursuant to the two-class method by dividing net loss available to common stockholders less dividends paid on participating securities (unvested shares of restricted common stock) and any undistributed loss attributable to participating securities by the weighted average common shares outstanding during the period.  The weighted average common shares outstanding includes the weighted average number of shares of common stock outstanding less the weighted average number of unvested shares of restricted common stock.  ESOP shares are considered outstanding for this calculation unless unearned.  Diluted net loss per share of common stock includes the dilutive effect of unvested stock awards and additional potential common shares issuable under stock options.

F-30

Table of Contents

Note 19 – Subsequent Events

On March 17, 2021, the Company’s stockholders approved the proposed sale of 18,474,000 shares of Broadway common stock in private placements to institutional and accredited investors at a purchase price of $1.78 per share for an aggregate purchase price of $32.9 million. The Company currently has subscription agreements for all of these shares. The private placements of common stock are expected to close a few days after the merger.

Section 382 of the Internal Revenue Code limits the utilization of U.S. net operating loss (“NOL”) carryforwards following an ownership change, which occurs when one or more 5% shareholders increase their ownership, in aggregate, by more than 50% over the lowest percentage of stock owned by such shareholders at any time during the testing period, which is generally three years. Upon the completion of the private placements, there could be a triggering event which may result in a change of control. Based on management’s preliminary estimates, there could be limitations on our deferred tax assets that may require an impairment allowance of approximately $2.4 million.

Subsequent events have been evaluated through March 31, 2021, which is the date these financial statements were issued.

F-31

Exhibit 4.1

DESCRIPTION OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

As of December 31, 2020, Broadway Financial Corporation (the “Company”, “we”, “our” or “us”) had two classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): (1) shares of our common stock, par value $0.01 per share ( “Common Stock”), and (2) the preferred stock purchase rights described below with respect to Series B Junior Participating Preferred Stock that might be issued by us upon the occurrence of certain events.

Common Stock

We are authorized under our certificate of incorporation to issue an aggregate of 50,000,000 shares of Common Stock, par value $0.01 per share and 25,000,000 shares of non-voting common stock, par value $0.01 per share (“Non-Voting Common Stock”).   As of December 31, 2019, we had issued and outstanding 19,111,423 shares of Common Stock and 8,756,396 shares of Non-voting Common Stock. The shares of Non-Voting Common Stock have all the attributes and rights of our Common Stock, other than with respect to voting rights, and convert to shares of Common Stock having voting rights in the event of transfer from the holders to whom the shares of Non-Voting Common Stock were originally issued.  The Non-Voting Common Stock is not registered under the Exchange Act.

The following is a summary of the material terms of our common stock.  The rights of holders of our Common Stock and our Non-Voting Common Stock, are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock which we may designate and issue in the future. This description does not purport to be complete and is qualified in its entirety by reference to our certificate of incorporation and amended and restated bylaws, which are filed as exhibits to the registration statement of which this prospectus forms a part.

Dividend Rights

Subject to the rights of holders of preferred stock of any series that may be issued and outstanding from time to time, holders of our common stock are entitled to receive such dividends and other distributions in cash, securities or other assets as may be declared by our board of directors from time to time out of our funds or assets that are legally available for dividends and other distributions, and are entitled to share equally on a per share basis in all such dividends and other distributions.

Voting Rights

Each outstanding share of our Common Stock is entitled to one vote on all matters submitted to a vote of stockholders generally.  In the event we issue one or more series of preferred or other securities in the future such preferred stock or other securities may be given rights to vote, either together with the Common Stock or as a separate class on one or more types of matters.

Liquidation Rights

In the event of any liquidation, dissolution or winding up of the Company, the holders of our common stock will be entitled, subject to the prior rights of any outstanding series of our preferred stock, to share in our net assets, if any, that are available after the payment of all of our debts and other liabilities.

Preemptive Rights

The holders of our common stock have no preemptive rights in their capacities as such holders.

Board of Directors

Holders of Common Stock do not have cumulative voting rights with respect to the election of directors.  At any meeting to elect directors by holders of our Common Stock, the presence, in person or by proxy, of the holders of a majority of the voting power of shares of our Common Stock then outstanding will constitute a quorum for such election.  Directors may be elected by a plurality of the votes of the shares present and entitled to vote on the election of directors, except for directors whom the holders of any then outstanding preferred stock have the right to elect, if any.

Certain Anti-Takeover Effects of Our Certificate of Incorporation, Bylaws and Applicable Law

Provisions of Delaware Law. We are a Delaware corporation and Section 203 of the Delaware General Corporate Law (“DGCL”) applies to us.  It is an anti-takeover statute that is designed to protect stockholders against coercive, unfair or inadequate tender offers and other abusive tactics and to encourage any person contemplating a business combination with us to negotiate with our board of directors for the fair and equitable treatment of all stockholders.

Under Section 203 of the DGCL, a Delaware corporation is not permitted to engage in a “business combination” with an “interested stockholder” for a period of three years following the date that the stockholder became an interested stockholder.  As defined for this purpose, the term “business combination” includes a merger, consolidation, asset sale or other transaction resulting in a financial benefit to the interested stockholder.  The term “interested stockholder” is defined to mean a person who, together with affiliates and associates, owns, or within three years did own, 15% or more of the corporation’s outstanding voting stock.  This prohibition does not apply if:

• prior to the time that the stockholder became an interested stockholder, the board of directors of the corporation approved either the business combination or the transaction<br> resulting in the stockholder becoming an interested stockholder;
• upon completion of the transaction resulting in the stockholder becoming an interested stockholder, the stockholder owns at least 85% of the outstanding voting stock of the<br> corporation, excluding voting stock owned by directors who are also officers and by certain employee stock plans; or
--- ---
• at or subsequent to the time that the stockholder became an interested stockholder, the business combination is approved by the board and authorized at an annual or special meeting<br> of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock that the interested stockholder does not own.
--- ---

A Delaware corporation may elect not to be governed by these restrictions. We have not made such election.

Classified Board of Directors; Removal of Directors for Cause. Our certificate of incorporation and bylaws provide for our board of directors to be divided into three classes, as nearly equal in number as possible, serving staggered terms.  Approximately one-third of our board will be elected each year.  At each annual meeting of stockholders, directors elected to succeed those directors whose terms expire will be elected for a three-year term of office.  All directors elected to our classified board of directors will serve until the election and qualification of their respective successors or their earlier resignation or removal.  The board of directors is authorized to create new directorships and to fill such positions so created and is permitted to specify the class to which any such new position is assigned.  The person filling such position would serve for the term applicable to that class.  The board of directors (or its remaining members, even if less than a quorum) is also empowered to fill vacancies on the board of directors occurring for any reason for the remainder of the term of the class of directors in which the vacancy occurred.  Members of the board of directors may only be removed for cause by the affirmative vote, taken at a stockholders meeting, of a majority of our outstanding voting stock.  Cause is defined for this purpose to mean conviction of a felony, or gross negligence or misconduct in the performance of a director’s duty to the Company as determined by a court of competent jurisdiction, which adjudication is no longer subject to direct appeal.  These provisions are likely to increase the time required for stockholders to change the composition of the board of directors.  For example, in general, at least two annual meetings will be necessary for stockholders to effect a change in a majority of the members of the board of directors.  The provision for a classified board could prevent a party who acquires control of a majority of our outstanding Common Stock from obtaining control of our board of directors until our second annual stockholders meeting following the date the acquirer obtains the controlling stock interest.  The classified board provision could have the effect of discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us and could increase the likelihood that incumbent directors will retain their positions.

Advance Notice Procedures. Our bylaws establish an advance notice procedure for stockholder nominations of persons for election to our board of directors and for any proposals to be presented by stockholders at an annual meeting.  Stockholders at an annual meeting will only be able to consider nominations and other proposals specified in the notice of meeting or brought before the meeting by or at the direction of our board of directors or by a stockholder who was a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has given our corporate secretary timely written notice, in proper form, of the stockholder’s intention to nominate a person for election as a director or to bring a proposal for action at the meeting.

2

Unanimity Required For Stockholder Action Without Meeting.  Our certificate of incorporation provides that stockholder actions may be taken without a meeting only by written consent signed by all stockholders.

Supermajority Stockholder Vote Required for Certain Actions.  The Delaware General Corporation Law provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation’s certificate of incorporation or bylaws, unless the corporation’s certificate of incorporation or bylaws, as the case may be, requires a greater percentage.  Our certificate of incorporation requires the affirmative vote of the holders of at least 66-2/3% of our outstanding voting stock to amend or repeal certain provisions of the certificate of incorporation.  This “super-majority” stockholder vote would be in addition to any separate class vote that might be required pursuant to the terms of any preferred stock that might then be outstanding.  In addition, our amended and restated bylaws may only be amended by the directors then in office.

The affirmative vote of the holders of two-thirds of our outstanding voting stock is also required by our certificate of incorporation, in addition to any other approval that may be required by law, for approval of a business combination with or upon a proposal by an interested stockholder, unless the business combination (1) has been approved by a majority of disinterested directors, or (2) will occur at least three years after the proposing stockholder became an interested stockholder and certain criteria relating to the price to be paid in the business combination are satisfied, or (3) is solely with one of our subsidiaries and certain criteria are satisfied.  For purposes of the foregoing provisions, the term “interested stockholder” is defined as a direct or indirect beneficial owner of more than 10% of our outstanding voting stock.

Effects of Authorized but Unissued Shares. We have shares of Common Stock and “blank check” preferred stock available for future issuance and our Board may establish the terms of separate series of such preferred stock, without stockholder approval, subject to the limitations imposed by the listing standards of the NASDAQ Capital Market or any securities market or exchange on which our securities may be listed or traded.  These additional shares may be utilized for a variety of corporate purposes, including future private sales or public offerings to raise additional capital, acquisitions of other companies and grants of stock options or other stock-based compensation awards pursuant to employee incentive compensation plans.  The existence of authorized but unissued shares of Common Stock and “blank check” preferred stock could render more difficult or discourage an attempt to obtain control of a majority of our Common Stock by means of a proxy contest, tender offer, merger, or otherwise.

Regulatory Requirements.  The Change in Bank Control Act prohibits a person or group of persons acting in concert from acquiring control of a savings and loan holding company unless the Federal Reserve Board has been given 60 days prior written notice of such proposed acquisition and within that time period the Federal Reserve Board has not issued a notice disapproving the proposed acquisition or extending for up to another 30 days the period during which such a disapproval may be issued.  The term “control” is defined for this purpose to include ownership or control of, or holding with power to vote, 25% or more of any class of a savings and loan holding company’s voting securities.  Under a rebuttable presumption contained in the regulations of the Federal Reserve Board, ownership or control of, or holding with power to vote, 10% or more of any class of voting securities of a savings and loan holding company having a class of securities registered under Section 12 of the Exchange Act would also be deemed to constitute the acquisition of control.  In addition, any company would be required to obtain the approval of the Federal Reserve Board under the Home Owners’ Loan Act before acquiring control of a savings and loan holding company.  For this purpose, a company is deemed to have control of a savings and loan holding company if the company owns, controls, holds with power to vote, or holds proxies representing, 25% or more of any class of voting shares of the savings and loan holding company or controls in any manner the election of a majority of the holding company’s directors, and may also be deemed to acquire control of a savings and loan holding company based on a consideration of all relevant facts by the Federal Reserve Board.

Transfer Agent and Registrar

Computershare Investor Services is the transfer agent and registrar for our Common Stock.  The transfer agent and registrar’s address is 250 Royall Street, Canton, MA 02021.

Listing of our Common Stock

Our Common Stock is listed on the NASDAQ Capital Market under the symbol “BYFC.”

3

Rights to Purchase Series B Junior Participating Preferred Stock

On September 10, 2019, our board of directors declared a dividend of one preferred share purchase right (each a “Right”) for each share of Common Stock and Non-Voting Common Stock outstanding on September 23, 2019 to the stockholders of record as of the close of business on that date.  In connection with the distribution of the Rights, the Company entered into a Rights Agreement (the “Rights Agreement”), dated as of September 10, 2019, between the Company and Computershare Trust Company, N.A., as rights agent.   The Rights are attached to and will not be transferrable separately from the shares of Common Stock and Non-Voting Common Stock in respect of which the Rights were issued except upon the occurrence of certain events specified in the Rights Agreement.  The Rights are registered under the Exchange Act.

Each Right entitles the registered holder thereof, upon the occurrence of certain events, to purchase from the Company one one-thousandth of a share of Series B Junior Participating Preferred Stock, par value $0.01 per share, of the Company (the “Series B Preferred Shares”) at a price of $3.60 per each one-thousandth of a Preferred Share represented by a Right, subject to adjustment in certain events as provided in the Rights Agreement.  No shares of Series B Preferred Shares are outstanding, and the Series B Preferred Shares are not registered under the Exchange Act at this time.

The Rights are in all respects subject to and governed by the provisions of the Rights Agreement, which is incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on September 11, 2019.  A description of the Rights is incorporated herein by reference to the description thereof set forth under Items 1.01 and 5.03 of the Company’s Current Report on Form 8-K filed on September 11, 2019, which description is qualified in its entirety by reference to the full text of the Rights Agreement.

4

Exhibit 10.14

PLAN DOCUMENT

INCENTIVE COMPENSATION PLAN

PURPOSE

The purpose of the Incentive Compensation Plan (“Plan”) is to provide a financial incentive to key exempt employees to improve Broadway Federal Bank’s (Bank) financial performance consistent with safe and sound policies and practices.  Incentives are based on the achievement of board approved annual objectives consistent with the Bank’s long-term goals.

ELIGIBLITY

Exempt employees of the Bank are eligible to participate in the Plan.  Target award percentages are based on position and scope of responsibility.  Positions at the non-exempt level do not have target awards.  Rather, they are eligible for one-time exceptional performance awards that can be granted at the end of the year or at the conclusion of a project.

A minimum of three months continuous service with the Bank is necessary in order to be eligible for an award under the Plan.

PLAN ADMINISTRATION

The Compensation Committee of the Board of Directors (“Committee”) administers the Plan, which approves: (1) plan participants, (2) bonus award levels, (3) Bank and individual objectives and target performance levels.  The Committee also approves final incentive payout awards for the Senior Executive Officers (SEOs).  The CEO of the Bank is delegated the responsibility for the day-to day administration of the Plan, the objectives and the awards for eligible employees.

PERFORMANCE OBJECTIVES

Awards under the Plan are based on achievement of annual Bank objectives and individual objectives.  The weighting of Bank objectives and individual objectives for eligible positions is as follows:

Bonus Opportunity for: Bank Objectives Individual Objectives
Category 1 •     CEO 100% 0%
Category 2 •      EVP/ CFO<br><br> <br>•      EVP/ CLO<br><br> <br>•      EVP/ CRBO 80% 20%
Approved by Board 02-2020
---
PLAN DOCUMENT
Bonus Opportunity for: Bank<br><br> <br>Objectives Individual<br><br> <br>Objectives
--- --- --- ---
Category 3 •      FVP/ Chief Auditor<br><br> <br>FVP/ Controller 70% 30%
Category 4 •      VP/ Chief Credit Officer<br><br> <br>•      VP/Internal Asset Review<br><br> <br>Manager<br><br> <br>•      VP/Retail Deposits Operations<br><br> <br>Manager<br><br> <br>•      VP/Administration &<br><br> <br>Community Development<br><br> <br>Manager<br><br> <br>•      VP/Loan Service Manager 50% 50%
Category 5 •      AVP/Human Resources<br><br> <br>Manager<br><br> <br>•      AVP/BSA Manager<br><br> <br>•      AVP/Information Technology<br><br> <br>Manager 20% 80%

Bank objectives are specified in advance of the Plan year by the CEO and approved by the Compensation Committee and the Board.  For purposes of calculating performance against the objectives for any year, profit (Net Earnings) is after-tax net income, as shown in Broadway Financial Corporation’s (Company) Consolidated Statement of Income for such year, including an amount equal to the after-tax charges for awards under this Plan for such year.

Individual objectives are established for each participating employee, depending on annual goals for the individual’s position, and typically include profit performance, regulatory compliance, cost performance targets, as well as other performance indicators related to the position (e.g. employee development, teamwork and quality).

Approved by Board 02-2020
PLAN DOCUMENT

THRESHOLDS

Thresholds establish minimum performance to activate the Plan.  The minimum financial threshold for activation of the Plan is 80% of the Board approved Consolidated Net Earnings (Net Earnings) for the Plan year.  Target is 100% of Board approved Net Earnings and Maximum (cap) is 120% of Board approved Net Earnings.

The minimum regulatory threshold for activation of the Plan is to maintain a “safety and soundness” examination rating of “3” or better and the maintenance of an asset quality rating of “3” or better.

FINAL AWARDS

Final awards are paid in cash following the end of the Plan year.  Individual employee awards are calculated against the achievement of Bank and Individual objectives as shown below (as % of base salary).

The current Bonus Opportunity schedule, which shall be updated and approved by the Compensation Committee on an annual basis, follows

Bonus Opportunity for: Minimum<br><br> <br>(80% of net<br><br> <br>earnings) Target<br><br> <br>(100% of net<br><br> <br>earnings) Maximum<br><br> <br>(120% of net<br><br> <br>earnings)
Category 1 CEO 25% 40% 65%
Category 2 EVP/ CFO<br><br> <br>EVP/ CLO<br><br> <br>EVP/ CRBO 20% 35% 50%
Category 3 FVP/Chief Auditor,<br><br> <br>FVP/Controller<br><br> <br>FVP/Loan Service Manager<br><br> <br>VP/Corporate<br><br> <br>Secretary/General Counsel 15% 25% 40%
Category 4 VP/ Chief Credit Officer<br><br> <br>VP/ Internal Asset Review<br><br> <br>Manager<br><br> <br>VP/Information Technology<br><br> <br>VP/Retail Deposit Operations<br><br> <br>Manager<br><br> <br>VP/Administration and<br><br> <br>Community Development<br><br> <br>Manager 10% 20% 30%
Category 5 AVP/ Human Resources<br><br> <br>Manager<br><br> <br>VP/Training Manager<br><br> <br>AVP/BSA Officer<br><br> <br>AVP/Information Technology 5% 15% 20%

Sample bonus calculation worksheets are shown on pages 7-9.

Approved by Board 02-2020
PLAN DOCUMENT

DISCRETIONARY AWARDS

As part of this Plan design, an additional discretionary bonus reserve equal to 10% of the total bonus accrual for the Plan year will be available to recognize exempt employees who have demonstrated outstanding individual performance. The minimum award is $500 and the maximum award is $10,000. The number and amount of discretionary awards will be determined by the number of eligible employees, the total amount of the bonus reserve, and individual employee performance.

Discretionary awards based on individual performance are available under the Plan, even if threshold minimum net earnings are not achieved, except for employment categories “1” and “2” that require board approval.

BONUS CONDITIONS

The Bank will not make any bonus or incentive payments if any of the following conditions exist:

1. The Bank is subject to any adverse corrective regulatory action.
2. The Bank is less than “Well Capitalized”, according to Prompt Corrective Action Standards.
--- ---
3. The Bank receives a composite rating of “4” or worse, or a component rating of “4” or worse for “asset quality” at any regulatory examination.
--- ---

TERMINATION OF EMPLOYMENT

Unless determined otherwise by the Committee, a Participant who terminates employment with the Bank for any reason except Bank-approved retirement, permanent disability, or death prior to the end of a year is not eligible to receive a final award for that year.

Approved by Board 02-2020
PLAN DOCUMENT

Unless determined otherwise by the Committee, in the case of Bank-approved retirement, permanent disability, or death during the year, the eligibility of the Participant (or the participant’s surviving spouse or other beneficiary in the case of death) to receive an award for that year remains in effect.  In general, awards made in such cases are reduced pro rata based on the number of months of service during the year.

In the event of competitive activity, failure to cooperate with the Bank or to engage in conduct inimical to the best interest of the Bank, the Committee may, at its discretion, remove a participant from the Plan.

DEFINITIONS

The “Plan” Incentive Compensation Plan of Broadway Federal Bank
“Participants” All active exempt employees of Broadway Federal Bank with a minimum of 3 months continuous service.
--- ---
The “Bank” Broadway Federal Bank
--- ---
The “Committee” The Compensation/Benefits Committee of the Board of Directors
--- ---
“Individual Objectives” Individual objectives are established at the beginning of each annual performance period by each employee and his/her manager
--- ---
Senior Executive Officer Principal executive officer of the Bank, Chief Financial Officer, Chief Loan Officer and the Chief Retail Banking Officer.
--- ---
Approved by Board 02-2020
---

EXECUTION VERSION

Exhibit 10.24

BROADWAY FINANCIAL CORPORATION

STOCK PURCHASE AGREEMENT

February 19, 2021

TABLE OF CONTENTS

Page
ARTICLE 1. PURCHASE; CLOSING 2
1.1 Issuance, Sale and Purchase 2
1.2 Closing; Deliverables for the Closing; Conditions to the Closing 2
ARTICLE 2. REPRESENTATIONS AND WARRANTIES 5
2.1 Certain Terms 5
2.2 Representations and Warranties of the Company 6
2.3 Representations and Warranties of the Investor 20
ARTICLE 3. COVENANTS 22
3.1 Conduct of Business Prior to Closing 22
3.2 Use of Proceeds 22
3.3 Regulatory Filings 23
3.4 Confidentiality 23
3.5 Publicity 23
3.6 Commercially Reasonable Efforts 24
3.7 Legend. 24
3.8 Exchange Listing 24
3.9 Authorized Shares 25
3.10 Rule 144 Reporting 25
3.11 Exchange Rights 25
ARTICLE 4. TERMINATION 25
4.1 Termination 25
4.2 Effects of Termination 26
ARTICLE 5. INDEMNITY 27
5.1 Indemnification by the Company 27
5.2 Indemnification by the Investor 27
5.3 Notification of Claims 28
5.4 Indemnification Payment 30
5.5 Exclusive Remedies 30
ARTICLE 6. MISCELLANEOUS 30
6.1 Survival 30
6.2 Other Definitions 30

i

6.3 Amendment and Waivers 33
6.4 Counterparts and Facsimile 33
6.5 Governing Law 33
6.6 WAIVER OF JURY TRIAL 33
6.7 Notices 34
6.8 Entire Agreement 34
6.9 Successors and Assigns 34
6.10 Captions 35
6.11 Severability 35
6.12 Third Party Beneficiaries 35
6.13 Public Announcements 35
6.14 Specific Performance 35
6.15 No Recourse to Other Persons 35

INDEX OF DEFINED TERMS

Page
Action 8
Affiliate 30
Agency 31
Agreement 1
Bank 6
Bank Merger 1
Benefit Plans 16
Board of Directors 31
Business Day 31
Capital Stock 31
CDFI 6
CFB 1
Class A Common Stock 1
Class B Common Stock 1
Class C Common Stock 1
Closing 2
Closing Date 2
Code 31
Company 1
Company Employees 16
Company Financial Statements 9
Company Indemnified Parties 27

ii

Company Insurance Policies 15
Company IT Assets 10
Company Reports 9
Company Specified Representations 31
Company Stock Plan 7
Company Subsidiaries 6
Company Subsidiary 6
Concurrent Other Transactions 1
control 30
controlled by 30
controlling 30
Disclosure Schedule 31
Disqualification Event 18
EESA 16
ERISA 16
ERISA Affiliate 16
Exchange Act 9
FDIC 6
GAAP 31
Governmental Authorizations 14
Governmental Consent 31
Governmental Entity 32
Indemnified Party 28
Indemnifying Party 28
Insider 19
Insurer 32
Intellectual Property Rights 15
Investment 1
Investor 1
Investor Indemnified Parties 27
Investor Specified Representations 32
Knowledge 32
Law 14
Liens 8
Loan Investor 32
Losses 32
Material Adverse Effect 5
Merger 1
Merger Agreement 1
Merger Transactions 1
Multiemployer Plan 16
Non-Voting Common Stock 7
OFAC 12
Parties 1
Per Share Purchase Price 2

iii

Person 32
Personal Information 11
Placement Agents 1
Preferred Stock 7
Previously Disclosed 5
Privacy Laws 11
Purchase Price 2
Registration Statement 21
Rule 506 18
SEC 5
Securities Act 7
Shares 2
SLHCA Act 6
Stockholder Approval 3
Subsidiary 32
Surviving Bank 1
Tax 32
Tax Return 33
Taxes 32
Third Party Claim 28
Threshold Amount 27
under common control with 30
Voting Common Stock 7
Voting Debt 7
Voting Securities 33

iv

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Agreement”) is dated as of February 19, 2021, and is entered into by and among Broadway Financial Corporation, a Delaware corporation (the “Company”),

    and Ally Ventures, a business unit of Ally Financial Inc., a Delaware corporation \(the “Investor”, and together with the Company, the “Parties”\).

RECITALS

WHEREAS, the Company is a party to that certain Agreement and Plan of Merger (the “Merger Agreement”) with CFBanc Corporation, a District of Columbia benefit corporation (“CFB”) which provides, among other things and subject to the terms and conditions of the Merger Agreement, for (i) the merger of CFB with and into the Company, with the Company continuing as the surviving entity in the Merger (the “Merger”), (ii) immediately following the Merger, Broadway Federal Bank, f.s.b., a wholly owned subsidiary of the Company, will merge with and into City First Bank of D.C., National Association (“CFB Sub”), a wholly owned subsidiary of CFB (the “Bank Merger” and together with the Merger and the other transactions contemplated by the Merger Agreement, the “Merger Transactions”), with CFB Sub continuing as the surviving entity (the “Surviving Bank”), and (iii) the Company’s voting common stock, par value $0.01 per share, will be renamed Class A Common Stock (“Class A Common Stock”), a new class of non-voting common stock of the Company, par value $0.01 per share, will be created which will be named Class B Common Stock (“Class B Common Stock”) and the Company’s currently authorized non-voting common stock, par value $0.01 per share, will be renamed Class C Common Stock (the “Class C Common Stock” and collectively, the “Common Stock” );

WHEREAS, the Company has engaged Raymond James & Associates, Inc. and Keefe, Bruyette & Woods, Inc. as co-placement agents (the “Placement Agents”) for the offering of the Common Stock.

WHEREAS, the Company desires to issue and sell to the Investor, and the Investor desires to purchase from the Company, on the terms and conditions described herein, shares of Class A Common Stock at the Per Share Purchase Price specified herein (the “Investment”);

WHEREAS, the Investment is proposed to be made subject to completion of the Merger Transactions;

WHEREAS, the Investment is proposed to be made concurrently with the sale by the Company of shares of Class A Common Stock and Class C Common Stock at the Per Share Purchase Price via private placement to certain other investors (the “Concurrent Other Transactions”); and

NOW, THEREFORE, in consideration of the premises, and of the respective representations, warranties, covenants and other agreements of the Parties set forth herein, the Parties hereby agree as follows:

ARTICLE 1.

PURCHASE; CLOSING

1.1        Issuance,

      Sale and Purchase. On the terms and subject to the conditions set forth herein, the Company agrees to issue and sell to the Investor, and the Investor agrees to purchase from the Company, free
  and clear of any Liens, 561,797 shares of Class A Common Stock \(the “Shares”\) at a per share purchase price of $1.78 or, if lower, the same price paid by any other Person who acquires shares \(or enters
  into any agreement to acquire shares\) of Class A Common Stock \(or any other Voting Stock or Non-Voting Stock or common equivalent Preferred Stock\) after the date hereof and prior to, or substantially contemporaneous with, the Closing \(the “Per Share Purchase Price”\), payable to the Company in immediately available funds at the Closing; provided, however, that the number of Shares that the Investor is required to purchase pursuant to this
  Section 1.1 shall be reduced, if and to the extent necessary to cause the percentage of the Company’s Class A Common Stock held by the Investor as of immediately following the Closing and the closing of the Concurrent Other Transactions not to exceed
  4.9% of the total number of shares of Class A Common Stock outstanding immediately following the Closing and the closing of the Concurrent Other Transactions.  The aggregate purchase price payable pursuant to this Section 1.1 is referred to herein as
  the “Purchase Price”\).

1.2         Closing;

      Deliverables for the Closing; Conditions to the Closing.

(a)         Closing.  Unless this Agreement has been terminated pursuant to Article 4, and subject to the satisfaction or, to the extent permitted by Law and this Agreement, the written waiver of the conditions set forth in Section 1.2(c), the closing of the transaction contemplated by this Agreement (the “Closing”) shall take place at the offices of Arnold & Porter LLP, located at 777 South Figueroa Street, 44th Floor, Los Angeles, California 90017, or remotely via the electronic or other exchange of documents and signature pages, at 9:00 a.m. Pacific Time on the second Business Day after the satisfaction or, if permissible, waiver of the conditions set forth in Section 1.2(c) (other than those which by their nature are to be satisfied at Closing, but subject to the satisfaction or waiver of such conditions), or at such other place or such other date as may be agreed to by the Parties (the “Closing Date”).

(b)         Closing Deliverables.  Subject to the satisfaction or permitted waiver of the conditions to the Closing set forth in Section 1.2(c), at the Closing the Parties shall make the following deliveries:

(i)          the Company shall deliver to the Investor one or more certificates evidencing the Shares registered in the name of the Investor (or if the Shares are to be uncertificated, the Company shall deliver appropriate evidence of such registration of the Shares in the name of the Investor);

(ii)        the Company shall deliver to the Investor a schedule setting forth the aggregate number of shares of each class of Capital Stock outstanding immediately after giving effect to the Merger Transactions, the Concurrent Other Transactions and the transactions contemplated hereby; and

2

(iii)      the Investor shall deliver the Purchase Price by wire transfer of immediately available funds to the account specified by the Company for this purpose by notice to the Investor prior to the Closing.

(c)           Closing Conditions.

(i)          The obligations of the Investor, on the one hand, and the Company, on the other hand, to consummate the purchase and sale of the Shares provided for in this Agreement are each subject to the satisfaction or, to the extent permitted by Law and this Agreement, the waiver by the Company or the Investor, as applicable, of the following conditions to the Closing under this Agreement:

(A)          All Governmental Consents required to have been obtained at or prior to the Closing Date in connection with the execution, delivery or performance of this Agreement and the consummation of the transactions contemplated hereby shall have been obtained and shall be in full force and effect.

(B)         The Merger Transactions shall have been consummated in accordance with the Merger Agreement, including the approval of the Merger Agreement by the stockholders of each of the Company and CFB;

(C)          If required under applicable Law or the rules and regulations of the Nasdaq Stock Market, the approval by stockholders of the Company of resolutions providing for the Company’s issuance of the maximum number of shares of Common Stock to be issued under this Agreement and in the Concurrent Other Transactions in accordance with this Agreement, the definitive documentation relating to the Concurrent Other Transactions, and applicable Law and the rules and regulations of the Nasdaq Stock Market (such approval being referred to herein as the “Stockholder Approval”) shall have been obtained;

(D)           Approval by the stockholders of the Company to increase in the authorized number of shares of Voting Common Stock (which will become Class A Common Stock upon completion of the Merger) from 50,000,000 shares to 75,000,000 shares, to be effected by the filing of an amended and restated certificate of incorporation of the Company (the “Authorized Shares Increase Approval”), shall have been obtained.

(ii)         The obligation of the Investor to consummate the purchase of Shares provided for in this Agreement is also subject to the satisfaction or waiver by the Investor of the following conditions to the Closing:

(A)          (i) The  Company Specified Representations shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date and (ii) the other representations and warranties of the Company set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except, in the case of this clause (ii) only, to the extent that the failure to be true and correct (without regard to any materiality or Material Adverse Effect qualifications contained therein), would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and except, in the case of clauses (i) and (ii), that representations and warranties made as of a specified date shall be true and correct as of such date;

3

(B)        The Company shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date;

(C)          The Investor shall have received a certificate, dated as of the Closing Date, signed on behalf of the Company by a senior executive officer certifying to the effect that the conditions set forth in Section 1.2(c)(ii)(A), Section 1.2(c)(ii)(B) and Section 1.2(c)(ii)(D) have been satisfied on and as of the Closing Date;

(D)           Since the date of this Agreement, no Material Adverse Effect shall have occurred and no change or other event shall have occurred that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(iii)      The obligation of the Company to consummate the sale of the Shares provided for in this Agreement is also subject to the satisfaction or written waiver by the Company of the following conditions to the Closing:

(A)           The representations and warranties of the Investor set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except to the extent that the failure to be true and correct (without regard to any materiality qualifications contained therein) would not materially adversely affect the ability of the Investor to perform its obligations hereunder and except that (1) representations and warranties made as of a specified date shall be true and correct as of such date and (2) the representations and warranties of the Investor set forth in Sections 2.3(d) and 2.3(f) shall be true and correct in all respects;

(B)          The Investor shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date; and

(C)           The Company shall have received a certificate, dated as of the Closing Date, signed on behalf of the Investor by a duly authorized person certifying to the effect that the conditions set forth in Section 1.2(c)(iii)(A) and Section 1.2(c)(iii)(B) have been satisfied on and as of the Closing Date.

4

ARTICLE 2.

REPRESENTATIONS AND WARRANTIES

2.1         Certain

      Terms.

(a)        As used in this Agreement, the term “Material Adverse Effect” means any circumstance, event, change, development or effect that, individually or in the aggregate, would reasonably be expected to (i) result in a material adverse effect on the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole, or (ii) materially impair or delay the ability of the Company or any of the Company Subsidiaries to perform its or their obligations under this Agreement to consummate the Closing or any of the transactions contemplated hereby; provided, however, that in determining whether a Material Adverse Effect has occurred under clause (i), there shall be excluded any circumstance, event, change, development or effect to the extent resulting from (A) actions or omissions of the Company or any Company Subsidiary expressly required or contemplated by the terms of this Agreement, (B) changes after the date hereof in general economic conditions in the United States, including financial market volatility or downturns, or in the markets in which the Company and the Company Subsidiaries operate, (C) changes after the date hereof affecting the banking industry generally, (D) any changes after the date hereof in applicable Laws or accounting rules or principles, including changes in GAAP, (E) changes in the market price or trading volume of the Common Stock or the Company’s other outstanding securities (but not the underlying causes of such changes), (F) any epidemic, pandemic or disease outbreak (including the Covid-19 virus) including any worsening of such conditions; or (G) any failure by the Company or any of the Company Subsidiaries to meet any internal projections or forecasts with regard to the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole (but not the underlying causes of such failure), in each case to the extent that such circumstance, event, change, development or effect referred to in clauses (B), (C) and (D) do not have a disproportionate effect on the Company and the Company Subsidiaries compared to other participants in the industries or markets in which the Company and the Company Subsidiaries operate.

(b)        As used in this Agreement, the term “Previously Disclosed” (i) with regard to any Party, means information set forth in its Disclosure Schedule under Section references corresponding with the provision of this Agreement to which such information relates (including, in the case of the Company, information identified in the Company’s Disclosure Schedule); provided, however, that if such information is disclosed in such a way as to make its relevance or applicability to another provision of this Agreement reasonably apparent on its face, such information shall be deemed to be responsive to such other provision of this Agreement and (ii) with regard to the Company, includes information publicly disclosed by the Company in any reports, schedules, forms, statements and other documents filed or furnished by the Company under the Securities Act and the Exchange Act with the Securities and Exchange Commission (the “SEC”), including pursuant to Section 13(a) or 15(d) thereof, since December 31, 2017, in each case available prior to the date of this Agreement (excluding any risk factor disclosures contained in such documents under the heading “Risk Factors” and any disclosure of risks included in any “forward-looking statements” disclaimer or other statements that are similarly non-specific and are predictive or forward-looking in nature). Notwithstanding anything in this Agreement to the contrary, the mere inclusion of an item in a Disclosure Schedule shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5

2.2         Representations and Warranties of the Company. Except as Previously Disclosed, the Company hereby represents and warrants to the Investor, as of the date of this Agreement and as of the Closing Date (except for the representations and warranties that are as of a specific date, which are made as of that date) that:

(a)         Organization and Authority.  Each of the Company and the Company Subsidiaries is a corporation or other entity duly organized and validly existing under the laws of the jurisdiction of its incorporation or organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, except where any failure to be so qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and has the corporate or other organizational power and authority to own its properties and assets and to carry on its business as it is now being conducted.  The Company has Previously Disclosed correct and complete copies of the certificate of incorporation and bylaws (or similar governing documents) as amended through the date of this Agreement for the Company and Broadway Federal Bank, f.s.b. (the “Bank”).  The Company is duly registered with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) as a savings and loan holding company under the Savings and Loan Holding Company Act, as amended, 12 U.S.C. 1467a (the “SLHCA Act”).  As of the date hereof, the Company is a certified “community development financial institution” designated as such under the Community Development Banking and Financial Institutions Act of 1994, as amended (12 U.S.C. Sections 5311 et seq.) and its implementing regulations, as applicable (a “CDFI”).  Following the consummation of the Bank Merger, the Surviving Bank will apply to be designated as a CDFI.

(b)         Company Subsidiaries.  As of the date of this Agreement, the Company has Previously Disclosed a true, complete and correct list of each entity in which the Company, directly or indirectly, owns sufficient capital stock or holds a sufficient equity or similar interest such that it is consolidated with the Company in the financial statements of the Company or has the power to elect a majority of the board of directors or other persons performing similar functions (each, a “Company Subsidiary” and, collectively, the “Company Subsidiaries,”

  and upon the consummation of the Merger Transactions, the Surviving Bank and each entity specified in Part II of Section 2.2\(b\) of the Disclosure Schedules will be deemed a Company Subsidiary\).  Except for the Company Subsidiaries and as Previously
  Disclosed, the Company does not own beneficially or control, directly or indirectly, more than 5% of any class of equity securities or similar interests of any corporation, bank, business trust, association or similar organization, and is not,
  directly or indirectly, a partner in any general partnership or party to any joint venture or similar arrangement.  The Company owns, directly or indirectly, all of its interests in each Company Subsidiary free and clear of any and all Liens.  No
  equity security of any Company Subsidiary is or may be required to be issued by reason of any option, warrant, scrip, preemptive right, right to subscribe to, gross-up right, call or commitment of any character whatsoever relating to, or security or
  right convertible into, shares of any capital stock or other interest of such Company Subsidiary, and there are no contracts, commitments, understandings or arrangements by which any Company Subsidiary is bound to issue additional shares of its
  capital stock or other interest, or any option, warrant or right to purchase or acquire any additional shares of its capital stock.  The deposit accounts of the Bank are insured by the Federal Deposit Insurance Corporation \(“FDIC”\) to the fullest extent permitted by the Federal Deposit Insurance Act, as amended, and the rules and regulations of the FDIC thereunder, and all premiums and assessments required to be paid in connection therewith have
  been paid when due \(after giving effect to any applicable extensions\). The Company beneficially owns all of the outstanding capital securities of, and has sole control of, the Bank.

6

(c)          Capitalization.

(i)         Except as set forth on the Disclosure Schedule, as of the date hereof, the authorized Capital Stock of the Company consists of 50,000,000 shares of Voting Common Stock, par value $0.01 per share (“Voting Common Stock”), 25,000,000 shares of Non-Voting Common Stock, par value $0.01 (“Non-Voting Common Stock”), and 1,000,000 shares of preferred stock, par value $0.01 (“Preferred Stock”).

(ii)        As of the date hereof, before giving effect to the transaction provided for herein, the Merger Transactions and the Concurrent Other Transactions the Company has issued and outstanding: (i) 19,281,758 of shares of Voting Common Stock, including 556,169 shares of Voting Common Stock granted in respect of outstanding restricted stock awards, (ii) 1,637,902 shares of Voting Common Stock held by the trust for the Broadway Federal Bank, f.s.b. Employee Stock Ownership Plan, and (iii) 8,756,396 shares of Non-Voting Common Stock.

(iii)        As of the date hereof, other than in respect of awards outstanding under or issuable pursuant to the Company’s 2008 Long-Term Incentive Plan (the “Company

      Stock Plan”\) consisting of options to purchase an aggregate of 450,000 shares of common stock, and except in connection with this Agreement and the transactions contemplated hereby, the Merger Agreement and the Concurrent Other
  Transactions, the Company has not \(A\) agreed to issue or authorized the issuance after the date hereof of any shares of Common Stock or Preferred Stock, or any securities convertible into or exchangeable or exercisable for shares of Common Stock or
  Preferred Stock, \(B\) reserved for issuance any shares of Capital Stock of the Company or \(C\) repurchased or redeemed, or agreed to or authorized the repurchase or redemption of, any shares of Capital Stock of the Company.

(iv)       All of the issued and outstanding shares of Capital Stock of the Company have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, except for the preemptive rights granted to certain institutional stockholders of the Company identified on Schedule 2.2(c)(iv) of the Company’s Disclosure Schedule.  None of the outstanding shares of Capital Stock or other securities of the Company or any of the Company Subsidiaries was issued, sold or offered by the Company or any Company Subsidiary in violation of the Securities Act of 1933, as amended (the “Securities Act”) or the securities or blue sky laws of any state or jurisdiction, or in violation of any agreement, arrangement or commitment to which the Company was or is a party or subject, or in violation of any preemptive or similar rights of any Person.  No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which the stockholders of the Company may vote (“Voting Debt”) are issued and outstanding.

(v)        As of the date of this Agreement, except for the outstanding awards under the Company Stock Plan, the Company does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of, or securities or rights convertible into or exchangeable or exercisable for, any shares of Capital Stock or Voting Debt of the Company.

7

(d)          Authorization; No Conflicts.

(i)       The Company has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The Board of Directors has approved the transactions contemplated by this Agreement.  This Agreement has been duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery by the Investor, is the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles (whether applied in equity or at law).

(ii)        Neither the execution and delivery by the Company of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by the Company with any of the provisions hereof, will, with or without the passage of time and giving of notice, (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any liens, charges, adverse rights or claims, pledges, covenants, title defects, security interests or other encumbrances of any kind (“Liens”) upon any of the properties or assets of the Company or any Company Subsidiary, under any of the terms, conditions or provisions of (1) the certificate of incorporation or bylaws (or similar governing documents) of the Company and each Company Subsidiary or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any of the Company Subsidiaries is a party or by which it may be bound, or to which the Company or any of the Company Subsidiaries, or any of the properties or assets of the Company or any of the Company Subsidiaries may be subject, or (B) violate any Law applicable to the Company or any of the Company Subsidiaries or any of their respective properties or assets except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(e)          Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of this Agreement or for the sale by the Company of Common Stock to the Investor pursuant to this Agreement.

(f)         Litigation and Other Proceedings.  Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, or as would not reasonably be expected to adversely impact the reputation of the Company, the Company Subsidiaries or their respective investors in any material respect, there is no pending or, to the Knowledge of the Company, threatened claim, action, suit, arbitration, complaint, charge or investigation or proceeding (each an “Action”) against the Company or any Company Subsidiary or any of their respective assets, rights or properties, nor is the Company or any Company Subsidiary a party or named as subject to the provisions of any order, writ, injunction, settlement, judgment or decree of any court, arbitrator or government agency, or instrumentality.  There has not been, and to the Knowledge of the Company, there is not pending or contemplated, any investigation or other Action by the SEC involving the Company or any current or former director or officer of the Company in his or her capacity as such.

8

(g)       Financial Statements.  The audited consolidated balance sheets of the Company and the Company Subsidiaries and the related consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2019 and the unaudited consolidated balance sheets of the Company and the Company Subsidiaries and the related unaudited consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s quarterly reports on Form 10-Q filed with the SEC for the quarterly period ending September 30, 2020 (the “Company Financial Statements”) (i) have been prepared from, and are in accordance with, the books and records of the Company and the Company Subsidiaries, (ii) complied, as of the date of such filing, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, (iii) have been prepared in accordance with GAAP applied on a consistent basis and (iv) present fairly in all material respects the consolidated financial position of the Company and the Company Subsidiaries at the dates and the consolidated results of operations, changes in stockholders’ equity and cash flows of the Company and the Company Subsidiaries for the periods stated therein.

(h)         Reports.  Since December 31, 2017, the Company and each Company Subsidiary have filed all material reports, registrations, documents, filings, statements and submissions, together with any required amendments thereto, that they were required to file with any Governmental Entity, including all those required under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof (the foregoing, collectively, being referred to herein as the “Company Reports”) and have paid all material fees and assessments due and payable in connection therewith.  As of their respective filing dates, or as subsequently amended prior to the date hereof, the Company Reports complied in all material respects with all statutes and applicable rules and regulations of the applicable Governmental Entities.  As of the date of this Agreement, there are no outstanding comments from the SEC or any other Governmental Entity with respect to any Company Report that were the subject of written correspondence that have not been resolved.  The Company Reports, including the documents incorporated by reference in each of them, each contained all the information required to be included in it and, when it was filed and, as of the date of each such Company Report filed with the SEC, or if amended prior to the date of this Agreement, as of the date of such amendment, did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in it, in light of the circumstances under which they were made, not misleading and complied as to form in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  No executive officer of the Company has failed in any respect to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002.

9

(i)          Internal Accounting and Disclosure Controls.  The records, systems, controls, data and information of the Company and the Company Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of the Company or the Company Subsidiaries (including all means of access thereto and therefrom) or reputable banking industry service providers, except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have an adverse effect on the system of internal accounting controls described below in this Section 2.2(i).  The Company (i) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) intended to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known to the chief executive officer and the chief financial officer of the Company by others within those entities, and (ii) has disclosed, based on its most recent evaluation prior to the date of this Agreement, to the Company’s outside auditors and the audit committee of the Board of Directors (A) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information, and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.  As of the date of this Agreement, the Company has no Knowledge of any reason that its outside auditors and its chief executive and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when due.  Since December 31, 2017, neither the Company nor any Company Subsidiary nor, to the Knowledge of the Company, any director, officer, employee, auditor, accountant or representative of the Company or any Company Subsidiary has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any Company Subsidiary or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any Company Subsidiary has engaged in questionable accounting or auditing practices.

(j)           Data Privacy.

(i)         The Company and the Company Subsidiaries have taken reasonable steps consistent with customary industry practices to protect the confidentiality, integrity, availability and security of the computers, servers, workstations, routers, hubs, switches, circuits, networks and other information technology equipment owned or controlled by them or by any third party and material to the Company and the Company Subsidiaries (the “Company IT Assets”) (and all information and transactions stored or contained therein or transmitted thereby) against any unauthorized use, access, interruption, modification or corruption, and there has been no unauthorized use, access, interruption, modification or corruption of the Company IT Assets.

10

(ii)       In connection with their receipt, purchase, collection, securing, safeguarding, storage, transfer (including any transfer across national borders), disclosure, destruction/disposal, and/or use or other processing of any Personal Information, each of the Company and the Company Subsidiaries, is and has been, in material compliance with all Privacy Laws, their respective privacy policies and the requirements of any contract or codes of conduct to which any of the Company or the Company Subsidiaries is a party.  The privacy policies of the Company are customary for the industry in which the Company operates.  The Company and the Company Subsidiaries have commercially reasonable and appropriate physical, technical, organizational, and administrative security measures and policies in place designed to protect all Personal Information collected by them or on their behalf from and against unauthorized access, use, interruption, modification, corruption, and/or disclosure.  The Company and the Company Subsidiaries have binding written agreements obligating (in accordance with and as required by Privacy Laws (as applicable)) all third parties collecting, accessing, receiving, storing or processing Personal Information on behalf of the Company and the Company Subsidiaries to (i) comply with all applicable Privacy Laws, (ii) take commercially reasonable and appropriate steps to protect and secure such Personal Information from and against unauthorized access, use interruption, modification, corruption, and/or disclosure which are no less stringent than those applied by the Company and the Company Subsidiaries and (iii) promptly notify the Company and the Company Subsidiaries of any unauthorized access, use interruption, modification, corruption, and/or disclosure of Personal Information or Company IT Assets processing Personal Information.  The Company and the Company Subsidiaries are, and since December 31, 2017, have been, in compliance in all material respects with all Privacy Laws and any other applicable Laws in all relevant jurisdictions relating to data loss, theft and breach of security notification obligations.  Since December 31, 2017, none of the Company or any of the Company Subsidiaries has experienced a material breach of its information technology systems or a data loss or theft as defined by the Laws in all relevant jurisdictions.  None of the Company or any of the Company Subsidiaries has been charged with, or received any notice of any claims of, the violation in any material respect of any Privacy Laws or any of their respective privacy policies.  The consummation of the transactions contemplated hereby will not breach or otherwise cause any violation of any Privacy Law.

(iii)        For the purposes of this Section 2.2(j):

(1)           “Personal Information” means, in addition to any definition provided by applicable law or by the Company and the Company Subsidiaries in any of their respective privacy policies, contracts, or other public-facing statements for any similar term (e.g., “personally identifiable information” or “PII”), all information identifying, regarding or capable of being associated with an individual person or device.  Personal Information may relate to any individual, including a current, prospective or former client (or a client’s customer or end user) or employee of any Person, and includes information in any form, including paper, electronic and other forms.

(2)             “Privacy Laws” means all applicable laws, legal requirements, and self-regulatory guidelines and principles relating to privacy, data security, and Personal Information and similar applicable consumer protection laws, including with respect to the receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security, disposal, destruction, disclosure or transfer of Personal Information and any and all applicable laws governing breach notification in connection with Personal Information.  As used in this Agreement, “Privacy Laws” shall include the California Consumer Privacy Act, General Data Protection Regulation and the rules and regulations promulgated thereunder, and applicable state laws.

11

(k)         No Undisclosed Liabilities.  There are no liabilities of the Company or any of the Company Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, except for (i) liabilities adequately reflected or reserved against in accordance with GAAP in the Company’s audited balance sheet as of December 31, 2019 and (ii) liabilities that have arisen in the ordinary and usual course of business and consistent with past practice since December 31, 2019 and that have not or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(l)      Mortgage Lending.  The Company and each of the Company Subsidiaries have complied in all material respects with, and all documentation in connection with the origination, processing, underwriting and credit approval of any mortgage loan originated, purchased or serviced by the Company or any Company Subsidiary has satisfied, in all material respects (i) all Laws with respect to the origination, insuring, purchase, sale, servicing, or filing of claims in connection with mortgage loans, including all Laws relating to real estate settlement procedures, consumer credit protection, truth in lending laws, usury limitations, fair housing, transfers of servicing, collection practices, equal credit opportunity and adjustable rate mortgages, (ii) the responsibilities and obligations relating to mortgage loans set forth in any agreement between the Company and any Agency, Loan Investor or Insurer, (iii) the applicable rules, regulations, guidelines, handbooks and other requirements of any Agency, Loan Investor or Insurer and (iv) the terms and provisions of any mortgage or other collateral documents and other loan documents with respect to each mortgage loan.

(m)        Bank Secrecy Act; Anti-Money Laundering; OFAC; and Customer Information.  The Company is not aware of, has not been advised of, and, to the Knowledge of the Company, has no reason to believe that any facts or circumstances exist that would cause it or any Company Subsidiary to be deemed to be not operating in compliance, in all material respects, with the Bank Secrecy Act of 1970, as amended, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (also known as the USA PATRIOT Act), any order or regulation issued by the Treasury’s Office of Foreign Assets Control (“OFAC”), or any other applicable anti-money laundering or anti-terrorist-financing statute, rule or regulation.  The Company is not aware of any facts or circumstances that would cause it to believe that any nonpublic customer information has been disclosed to or accessed by an unauthorized third party in a manner that would cause it to undertake any material remedial action.  The Company and each of the Company Subsidiaries have adopted and implemented an anti-money laundering program that contains adequate and appropriate customer identification verification procedures that comply with the USA PATRIOT Act and such anti-money laundering program meets the requirements in all material respects of Section 352 of the USA PATRIOT Act and the regulations thereunder, and they have complied in all respects with any requirements to file reports and other necessary documents as required by the USA PATRIOT Act and the regulations thereunder.  The Company will not directly or indirectly use the proceeds of the sale of the Common Stock pursuant to transactions contemplated by this Agreement, or lend, contribute or otherwise make available such proceeds to any Company Subsidiary, joint venture partner or other Person, towards any sales or operations in any country appearing on the OFAC Specially Designated Nationals List (“SDN List”) or for the purpose of financing the activities of any Person currently appearing on the SDN List.

12

(n)         Certain Payments.  Neither the Company nor any of the Company Subsidiaries, nor any directors, officers, nor to the Knowledge of the Company, employees or any Affiliates of the Company or the Company Subsidiaries or any other Person who to the Knowledge of the Company is associated with or acting on behalf of the Company or any of the Company Subsidiaries has directly or indirectly (i) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment in material violation of any Law, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable anti-bribery or anti-corruption laws, to any Person, private or public, regardless of form, whether in money, property, or services (A) to obtain favorable treatment in securing business for the Company or any of the Company Subsidiaries, (B) to pay for favorable treatment for business secured by the Company or any of the Company Subsidiaries, or (C) to obtain special concessions or for special concessions already obtained, for or in respect of the Company or any of the Company Subsidiaries or (ii) established or maintained any fund or asset with respect to the Company or any of the Company Subsidiaries that was required by Law or GAAP to have been recorded and was not recorded in the books and records of the Company or any of the Company Subsidiaries.  Neither the Company nor any Company Subsidiaries has conducted any internal investigation, made any voluntary, directed, or involuntary disclosure to any Governmental Entity, or received any audit report, written communication from a Governmental Entity, or whistleblower or other written complaint, involving alleged violations in any material respect of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable anti-bribery or anti-corruption laws on the part of the Company, any of the Company Subsidiaries, or any Person acting on behalf of the Company or any of the Company Subsidiaries.

(o)         Absence of Certain Changes.  Since December 31, 2019 and except as Previously Disclosed or as required or contemplated by the terms of this Agreement, (i) the Company and the Company Subsidiaries have conducted their respective businesses in all material respects in the ordinary and usual course of business consistent with past practices, (ii) through (and including) the date of this Agreement, no fact, event, change, condition, development, circumstance or effect has occurred that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (iii) no material default (or event which, with notice or lapse of time, or both, would constitute a material default) exists on the part of the Company or any Company Subsidiary in the due performance and observance of any term, covenant or condition of any agreement to which the Company or any Company Subsidiary is a party and which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

13

(p)          Compliance with Laws.

(i)          The Company, each Company Subsidiary and each of their officers, agents, representatives and employees possesses, holds and have all material permits, licenses, franchises, authorizations, orders, consents, registrations, accreditations and approvals of, and have made all filings, applications and registrations with, Governmental Entities that are required in order to permit the Company and each Company Subsidiary to own or lease their properties and assets and to carry on their business as presently conducted and that are material to the business of the Company and each Company Subsidiary (collectively, the “Governmental Authorizations”).  The Company and the Company Subsidiaries, and to the Company’s Knowledge, their respective officers, agents, representatives and employees, are not in default under any of such Governmental Authorizations, which default(s) would be, or be reasonably expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries (taken as a whole).  The Company and each Company Subsidiary have complied with and (A) are not, and since December 31, 2017, have not been, in default or violation in any respect of, (B) are not under investigation with respect to, and (C) have not been threatened to be charged with or given notice of any material violation of, any applicable material domestic (federal, state or local) or foreign law, statute, ordinance, license, rule, regulation, policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental Entity (each, a “Law”),

  other than such noncompliance, defaults or violations as would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries \(taken as a whole\).  No Governmental Entity has placed any
  material restriction on the business or properties of the Company or any of the Company Subsidiaries.  As of the date hereof, the Bank has a Community Reinvestment Act rating of “outstanding.”

(ii)        Except for normal examinations conducted by a Governmental Entity in the ordinary course of business of the Company and the Company Subsidiaries, (A) no Governmental Entity has initiated or has pending any proceeding or, to the Knowledge of the Company, investigation into the business or operations of the Company or any of the Company Subsidiaries since December 31, 2017, (B) there is no unresolved violation or exception by any Governmental Entity with respect to any report or statement relating to any examinations or inspections of the Company or any of the Company Subsidiaries, and (C) there have been no formal or informal inquiries by, or disagreements or disputes with, any Governmental Entity with respect to the business, operations, policies or procedures of the Company or any of the Company Subsidiaries since December 31, 2017, in each case of clauses (A) through (C), which would reasonably be expected, individually or in the aggregate, to be material to the Company and the Company Subsidiaries (taken as a whole).

(iii)       The Company and the Company Subsidiaries are not, and since December 31, 2017, have not been, in violation or default of any provisions of their respective certification of incorporation or bylaws (or similar governing documents).

(q)         Adequate Capitalization.  As of September 30, 2020, the Bank met or exceeded the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.  As of the Closing and after giving effect to this Agreement, the transactions contemplated hereby and the Concurrent Transactions, the Bank meets or exceeds the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.

(r)         Agreements with Regulatory Agencies.  The Company and the Company Subsidiaries (A) are not subject to any cease-and-desist or other similar order or enforcement action issued by, (B) are not a party to any written agreement, consent agreement or memorandum of understanding with, (C) are not a party to any commitment letter or similar undertaking to, and (D) are not subject to any capital directive by, and since December 31, 2019, neither the Company nor any of the Company Subsidiaries has adopted any board resolutions at the request of any Governmental Entity that currently restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its liquidity and funding policies and practices, its ability to pay dividends, its credit, risk management or compliance policies, its internal controls, its management or its operations or business, nor has the Company nor any of the Company Subsidiaries been advised since December 31, 2019 by any Governmental Entity that it is considering issuing, initiating, ordering, or requesting any of the same.

14

(s)         Insurance.  The Company and each of the Company Subsidiaries are presently insured, and have been insured for at least the past two years, for reasonable amounts with financially sound and reputable insurance companies against such risks as companies engaged in a similar business would, in accordance with good business practice, customarily be insured.  All of the policies, bonds and other arrangements providing for the foregoing (the “Company Insurance Policies”) are in full force and effect, the premiums due and payable thereon have been or will be timely paid through the Closing Date, and there is no material breach or default (and no condition exists or event has occurred that, with the giving of notice or lapse of time or both, would constitute such a material breach or default) by the Company or any of the Company Subsidiaries under any of the Company Insurance Policies or, to the Knowledge of the Company, by any other party to the Company Insurance Policies.  Neither the Company nor any of the Company Subsidiaries has received any written notice of cancellation or non-renewal of any Company Insurance Policy nor, to the Knowledge of the Company, is the termination of any such policies threatened in writing by the insurer, and there is no material claim for coverage by the Company, or any of the Company Subsidiaries, pending under any of such Company Insurance Policies as to which coverage has been denied or disputed by the underwriters of such Company Insurance Policies or in respect of which such underwriters have reserved their rights.

(t)          Title.  The Company and the Company Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and valid title to all material personal property owned by them, in each case free and clear of all Liens, except for Liens which do not materially affect the value of such property or do not interfere with the use made and proposed to be made of such property by the Company or any Company Subsidiary.  Any real property and facilities held under lease by the Company or the Company Subsidiaries are leased pursuant to valid, subsisting and enforceable leases with such exceptions that are not material and do not interfere with the use made and proposed to be made of such property and facilities by the Company or the Company Subsidiaries.

(u)          Intellectual

        Property. The Company and the Company Subsidiaries own or possess adequate rights or licenses to use all trademarks, service marks and all applications and registrations therefor, trade
    names, patents, patent rights, copyrights, original works of authorship, inventions, trade secrets and other intellectual property rights \(collectively, “Intellectual Property Rights”\) used in their
    businesses as conducted on the date of this Agreement, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  To the Knowledge of the Company, no product or service of the Company or the
    Company Subsidiaries infringes the Intellectual Property Rights of others.

15

(v)          Employee Benefits.

(i)        Section 2.2(v) of the Disclosure Schedule sets forth a correct and complete list of each “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including, without limitation, multiemployer plans within the meaning of Section 3(37) of ERISA), and all stock purchase, stock option, severance, employment, change-in-control, fringe benefit, bonus, incentive, deferred compensation and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transactions contemplated by this Agreement or otherwise), whether formal or informal, oral or written, under which (A) any current or former employee or director of the Company or any of the Company Subsidiaries (the “Company Employees”) has any present or future right to benefits and which are contributed to, sponsored by or maintained by the Company or any of the Company Subsidiaries or (B) the Company or any Company Subsidiary has had or has any present or future liability. All such plans, agreements, programs, policies and arrangements are collectively referred herein to as the “Benefit

      Plans.”

(ii)      (A) Each Benefit Plan has been established and administered in all material respects in accordance with its terms, and in compliance with the applicable provisions of ERISA, the Code and other Laws; (B) no “reportable event” (as such term is defined in Section 4043 of ERISA) that could reasonably be expected to result in material liability has occurred with respect to any Benefit Plan, and (C) no non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) has been engaged in by the Company or any Company Subsidiary with respect to any Benefit Plan that has or is expected to result in any material liability or “accumulated funding deficiency” (as such term is defined in Section 302 of ERISA and Section 412 of the Code (whether or not waived)).

(iii)       The Company and the Company Subsidiaries will be in compliance, as of the Closing Date, with Sections 111 and 302 of the Emergency Economic Stabilization Act of 2008, as amended by the U.S. American Recovery and Reinvestment Act of 2009, including all guidance issued thereunder by a Governmental Entity (collectively “EESA”).

(iv)        None of the Company or any Company Subsidiary or any trade or business, whether or not incorporated (an “ERISA Affiliate”), all of which together with the Company or any Company Subsidiary would be deemed a “single employer” within the meaning of Section 4001 of ERISA, has, at any time during the last six years, contributed to or been obligated to contribute to any plan that is (i) subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code or (ii) a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA (a “Multiemployer Plan”) or a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA; and none of Company and the Company Subsidiaries nor any of their respective ERISA Affiliates has incurred any liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as those terms are defined in Part I of Subtitle E of Title IV of ERISA.

(v)         Neither the Company nor any Company Subsidiary has any material unfunded liabilities existing under or in connection with any Benefit Plan, and each such Benefit Plan has been established and administered in all respects in accordance with its terms, and in compliance with applicable law, except where failure to be in compliance would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.

16

(vi)        Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby could (either alone or in conjunction with any other event) reasonably be expected to result in, cause the accelerated vesting, funding or delivery of, or increase the amount or value of, any payment or benefit to any employee, officer or director of the Company or any Company Subsidiary.

(w)        Taxes.  All material Tax Returns required to be filed by, or on behalf of, the Company or the Company Subsidiaries have been timely filed, or will be timely filed, in accordance with all Laws, and all such Tax Returns are, or will be at the time of filing, complete and correct in all material respects.  The Company and the Company Subsidiaries have timely paid all material Taxes due and payable (whether or not shown on such Tax Returns), or, where payment is not yet due, have made adequate financial statement provisions therefor in accordance with GAAP.  There are no Liens with respect to Taxes upon any of the assets or properties of either the Company or the Company Subsidiaries other than with respect to Taxes not yet due and payable.  As of the date of this Agreement, there are not pending or threatened in writing, any audits, examinations, investigations or other proceedings initiated by the Internal Revenue Service in respect of U.S. federal income tax matters.  None of the Company or any of the Company Subsidiaries has been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the date hereof that was purported or intended to be governed by Section 355 of the Code (or any similar provision of state, local or foreign Law).  The Company and each Company Subsidiary is, and has been since the date of its formation, a corporation for U.S. federal income tax purposes, and neither the Company nor any Company Subsidiary has elected pursuant to the Code to be treated as a Subchapter S corporation pursuant to Section 1362(a) of the Code, nor has it made any other elections pursuant to the Code (other than elections that relate solely to methods of accounting, depreciation or amortization) that would have, or be reasonably expected to result in, individually or in the aggregate, a Material Adverse Effect.

(x)          Labor.

(i)        Employees of the Company and the Company Subsidiaries are not represented by any labor union nor are any collective bargaining agreements otherwise in effect with respect to such employees.  No labor organization or group of employees of the Company or any Company Subsidiary has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions presently pending or threatened to be brought or filed with the National Labor Relations Board or any other labor relations tribunal or authority, nor have there been in the last three years.  There are no strikes, work stoppages, slowdowns, labor picketing lockouts, material arbitrations or material grievances, or other material labor disputes pending or, to the Knowledge of the Company, threatened against or involving the Company or any Company Subsidiary, nor have there been any in the past year.

17

(ii)        Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company and the Company Subsidiaries are in compliance with all federal and state Laws and requirements respecting employment and employment practices, terms and conditions of employment, collective bargaining, disability, immigration, health and safety, wages, hours and benefits, non-discrimination in employment, workers’ compensation and the collection and payment of withholding and/or payroll taxes and similar taxes.

(iii)     There is no charge or complaint pending or threatened before any Governmental Entity alleging unlawful discrimination in employment practices, unfair labor practices or other unlawful employment practices by the Company or any Company Subsidiary.

(iv)        To the Knowledge of the Company, since December 31, 2017, (i) no allegations of sexual harassment or misconduct have been made against (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000, and (ii) neither the Company nor any of the Company Subsidiaries has entered into any settlement agreements related to allegations of sexual harassment or misconduct by (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000.

(y)         Brokers and Finders.  Except as Previously Disclosed, neither the Company nor any of its officers, directors, employees or agents has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Company in connection with this Agreement or the transactions contemplated hereby, the fees of which would be payable by the Investor.

(z)          Offering of Securities.

(i)         Neither the Company nor any Person acting on its behalf has taken any action (including any offering of any securities of the Company under circumstances which would require the integration of such offering with the offering of any of the Shares to be issued pursuant to this Agreement under the Securities Act and the rules and regulations of the SEC promulgated thereunder) which would subject the offering, issuance or sale of any of the Shares to be issued pursuant to this Agreement to be subject to the registration requirements of the Securities Act.  Neither the Company nor any Person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Shares pursuant to the transactions contemplated by this Agreement.  Assuming the accuracy of the Investor’s representations and warranties set forth in this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investor.

(ii)         The Company is not disqualified from relying on Rule 506 of Regulation D (“Rule 506”) under the Securities Act for any of the reasons stated in Rule 506(d) (each such reason, a “Disqualification Event”) in connection with the issuance and sale of the Shares to the Investor.  The Company has furnished the Investor, a reasonable time prior to the date hereof, a description in writing of any matters that would have triggered disqualification under Rule 506(d) but which occurred before September 23, 2013, in each case, in compliance with the disclosure requirements of Rule 506(e).

18

(aa)      Affiliate Transactions.  No officer, director, five percent (5%) stockholder or other Affiliate of the Company (or any Company Subsidiary), or any individual who, to the Knowledge of the Company, is related by marriage or adoption to or shares the same home as any such Person, or any entity which, to the Knowledge of the Company, is controlled by any such Person (collectively, an “Insider”), is a party to any contract or transaction with the Company (or any Company Subsidiary) which pertains to the business of the Company (or any Company Subsidiary) or has any interest in any property, real or personal or mixed, tangible or intangible, used in or pertaining to the business of the Company or any Company Subsidiary.  The foregoing representation and warranty does not include deposit accounts of an Insider at the Company or any Company Subsidiary or loans of $250,000 or less made in the ordinary course of business to Insiders in compliance with Regulation O and other applicable Law.

(bb)       Private Placement.  Assuming the accuracy of the Investor’s representations and warranties set forth in Section 2.3 of this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investor.  Assuming the Stockholder Approval is obtained (if required), the issuance and sale of the Shares hereunder does not contravene the rules and regulations of the Nasdaq Stock Market.

(cc)       Listing and Maintenance Requirements.  The Company’s Voting Common Stock is (and at the Closing, the Class A Common Stock will be) registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to terminate the registration of the Voting Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received written notice from the Nasdaq Stock Market to the effect that the Company is not in compliance with the listing or maintenance requirements of the Nasdaq Stock Market.

(dd)       Investment Company.  Neither the Company nor any of the Company Subsidiaries is required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

(ee)       Acknowledgment Regarding the Investor’s Purchase of Shares.  The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby.  The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions and any advice given by the Investor or any of its representatives or agents in connection with this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions is merely incidental to Investor’s purchase of the Shares.

(ff)         No General Solicitation or General Advertising.  Neither the Company nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Shares.

19

(gg)        Shell Company Status.  The Company is not, and has never been, an issuer identified in Rule 144(i)(1) under the Securities Act.

(hh)       Valid Issuance of Shares.  The Shares sold and delivered in accordance with the terms hereof for the consideration expressed herein will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws.  Assuming the accuracy of the representations and warranties of the Investor set forth in Section 2.3, the Shares will be issued in compliance with all applicable federal and state securities laws.

2.3       Representations

      and Warranties of the Investor. Except as Previously Disclosed, the Investor hereby represents and warrants to the Company, as of the date hereof and as
  of the Closing Date \(except for the representations and warranties that are as of a specific date which are made as of that date\) that:

(a)          Organization and Authority.  The Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and where failure to be so qualified would be reasonably expected to materially and adversely impair or delay its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

(b)          Authorization; No Conflicts.

(i)       The Investor has the necessary power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by its board of directors, general partner or managing members, investment committee, investment adviser or other authorized person, as the case may be, and no further approval or authorization by any of its stockholders, partners or other equity owners, as the case may be, is required.  This Agreement has been duly and validly executed and delivered by the Investor and, assuming due authorization, execution and delivery by the Company is the valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

20

(ii)       Neither the execution, delivery and performance by the Investor of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by the Investor with any of the provisions hereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any Liens upon any of the properties or assets of the Investor under any of the terms, conditions or provisions of (1) its articles of incorporation or bylaws, its certificate of limited partnership or partnership agreement or its similar governing documents or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Investor is a party or by which the Investor may be bound, or to which the Investor or any of the properties or assets of the Investor may be subject, or (B) violate any Law applicable to the Investor or any of its properties or assets, except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to materially adversely affect the Investor’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

(c)          Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of this Agreement or for the purchase by the Investor of the Shares pursuant to this Agreement.

(d)        Purchase for Investment; Accredited Investor Status; Pre-Existing Relationship.  The Investor acknowledges that the Shares to be purchased by the Investor pursuant to this Agreement have not been registered under the Securities Act or under any state securities laws and may not be resold or transferred by the Investor without such registration or appropriate reliance on any available exemption from such requirements.  The Investor (i) is acquiring the Shares pursuant to an exemption from the registration requirements of the Securities Act and other applicable securities laws solely for investment with no present intention to distribute any of the Shares to any Person, (ii) will not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, (iii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Shares and of making an informed investment decision and (iv) is an “accredited investor” (as that term is defined by Rule 501 under the Securities Act), (vi) is aware that the Company has entered into the Merger Agreement pursuant to which it is required to file with the SEC a Registration Statement on Form S-4 (the “Registration Statement”), and (vi) began discussions regarding the potential for the Investment by this Agreement with representatives of the Company before the Registration Statement was filed with the SEC and Investor’s purchase of the Shares was not solicited by the Registration Statement or any other filing made by the Company with the SEC.

(e)          Brokers and Finders.  Neither the Investor, nor its Affiliates nor any of their respective officers or directors, has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Investor in connection with this Agreement or the transactions contemplated hereby.

(f)          Access to Information.  The Investor acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and the Company Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the Investment; and (iv) the opportunity to ask questions of management of the Company.

21

(g)       No Reliance.  The Investor has not relied on any representation or warranty made by any Person by or on behalf of the Company, including, without limitation, the Placement Agents, in connection with the Investment other than those contained in this Agreement.

(h)          Placement Agents.  The Investor acknowledges that the Placement Agents have not performed any due diligence review on behalf of the Investor.  Furthermore, the Investor will purchase the Shares directly from the Company and not from the Placement Agents and understands that neither the Placement Agents nor any other broker or dealer has any obligation to make a market in the Common Stock.

(i)          Accuracy of Representations.  The Investor understands that each of the Placement Agents and the Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements in connection with the transactions contemplated by this Agreement and agrees that if any of the representations or acknowledgements set forth in Sections 2.3(d) or 2.3(f) are no longer accurate as of the Closing Date, or if any of the agreements made by it are breached on or prior to the Closing Date, it shall promptly notify the Placement Agents and the Company.

ARTICLE 3.

COVENANTS

3.1       Conduct

      of Business Prior to Closing. Except as otherwise expressly required or contemplated by this Agreement or applicable Law, or with the prior written consent of the Investor, between the date of
  this Agreement and the Closing, the Company shall, and the Company shall cause each Company Subsidiary to:

(a)         use commercially reasonable efforts to conduct its business only in the ordinary course of business consistent with past practice; and

(b)        use commercially reasonable efforts to (i) preserve the present business operations, organization (including officers and employees) and goodwill of the Company and any Company Subsidiary and (ii) preserve business relationships with customers, suppliers, consultants and others having business dealings with the Company; provided, however, that nothing in this clause (b) shall place any limit on the ability of the Board of Directors to act in accordance with, or require any actions that the Board of Directors may, in good faith, determine to be inconsistent with, its duties or the Company’s obligations under applicable Law or imposed by any Governmental Entity.

3.2         Use of Proceeds. The proceeds received by the Company from the sale of the Shares contemplated hereunder (net of any applicable costs and expenses) will be used in a manner consistent in all material respects with the capital deployment plan provided by the Company to the Investor prior to the execution of this Agreement.

22

3.3          Regulatory Filings. The Company shall make all filings pursuant to any applicable state securities laws and Regulation D of the Securities Act that are required to be made in connection with the Closing.

3.4       Confidentiality. The Investor acknowledges that the information being provided to it in connection with the transactions contemplated hereby includes confidential information that has not been publicly disclosed and agrees to maintain the confidentiality of the information with the same degree of care that it uses to protect its own confidential information. Notwithstanding the foregoing, the Investor and its Affiliates shall not be prohibited from disclosing, with reasonable prior notice to the Company to the extent permitted under applicable Law, such confidential information to any governmental agency, regulatory authority or self-regulatory authority with authority to regulate or oversee any aspect of its or its affiliates’ business, including (without limitation) bank and securities examiners, in the course of routine inspections, examinations or inquiries thereby and in such case, the Investor will request confidential treatment of any such information that it discloses.

3.5         Publicity.

(a)          The Company shall not publicly disclose the financial or other terms of the transactions contemplated hereby or the name of any Investor or any Affiliate or investment adviser of any Investor, or include the name of any Investor or any Affiliate or investment adviser of any Investor in any press release or filing with the SEC or the Nasdaq Stock Market and shall not use any names, trademarks, service marks or trade names of the Investor or its Affiliates in any form of advertising and publicity or public statements, without the prior written consent of such Investor, except (i) as required by federal securities Law in connection with the filing of final transaction documents with the SEC or (ii) to the extent such disclosure is required by applicable Law, at the request of the staff of the SEC or at the request of the Nasdaq Stock Market regulations, in which case the Company shall provide each such Investor with prior written notice of such disclosure and the form of such disclosure shall be subject to the approval of such Investor, such approval not to be unreasonably withheld or delayed.

(b)       Following the Company’s public disclosure of the consummation of the transactions contemplated hereby and until such time as the Investor ceases to hold any of the Shares, the Company hereby grants a non-exclusive, non-transferrable, royalty-free license from the Company to the Investor to use, display and publish the Company’s name or logo (the “Marks”) on the Investor’s website together with a statement indicating that the Investor has invested in the Company and shall be accompanied by the following description of the Company: “a bank lender focusing on multi-family residential and commercial real estate loans and other investments in financially underserved urban areas.” Nothing contained in this Agreement will give the Investor or any of its subsidiaries any right, title or interest in or to the Marks or the goodwill associated therewith, except for limited usage rights expressly provided above. The Investor acknowledges and agrees that, as between the Company and the Investor and its subsidiaries, the Company is the sole owner of all rights in and to the Marks.

23

3.6        Commercially Reasonable Efforts. Upon the terms and subject to the conditions herein provided, except as otherwise provided in this Agreement, each of the Parties hereto agrees to use its commercially reasonable efforts to take or cause to be taken all action, to do or cause to be done and to assist and cooperate with the other Party in doing all things necessary, proper or advisable under applicable Laws to consummate and make effective the transactions contemplated hereby, including but not limited to: (a) the satisfaction of the conditions precedent to the obligations of the Parties; (b) the obtaining of applicable Governmental Consents, and consents, waivers and approvals of any other third parties; (c) defending of any claim, action, suit, investigation or proceeding, whether judicial or administrative, challenging this Agreement or the performance of the obligations hereunder; and (d) the execution and delivery of such instruments, and the taking of such other actions as the other Party may reasonably request in order to carry out the intent of this Agreement.  Notwithstanding the foregoing, under no circumstances will the Investor be required to disclose to the Company, the Company Subsidiaries or any third party any information the disclosure of which is prohibited by Law, nor shall it be required to agree to any restrictions, conditions or commitments imposed or otherwise required by any Government Entity that are determined by the Investor in its sole discretion to be unduly burdensome, other than customary passivity commitments, in order to consummate and make effective the transactions contemplated hereby.

3.7         Legend.

(a)       The Investor agrees that all certificates or other instruments representing the Shares subject to this Agreement shall bear legends substantially to the following effect, until such time as they are not required under Section 3.7(b)

“THE SHARES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.”

(b)         Upon request of the Investor, the Company shall promptly cause such legends to be removed from any certificate for any Shares to be so transferred if such Shares are being transferred pursuant to an exemption from the registration securities requirements of the Securities Act and applicable state Laws, subject to receipt by the Company of an opinion of counsel for the Investor reasonably satisfactory to the Company to the effect that such legend is no longer required under the Securities Act and applicable state Laws.  The Investor acknowledges that the sale of the Shares provided for herein has not been registered under the Securities Act or under any state securities Laws and agrees that it shall not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities Laws.

3.8        Exchange

      Listing. The Company shall use its reasonable best efforts to cause the Shares to be approved  for listing on the Nasdaq Stock Market as promptly as possible.

24

3.9        Authorized Shares. The Company will at all times reserve, free of any preemptive or similar rights of stockholders of the Company, a number of unissued shares of Class A Common Stock, sufficient to convert automatically, in accordance with the terms of the certificate of incorporation of the Company, all of the shares of Class C Common Stock then outstanding.

3.10       Rule

      144 Reporting. With a view to making available to the Investor the benefits of certain rules and regulations of the SEC which may permit the sale of the
  Shares by the Investor without registration under the Securities Act upon compliance with the initial holding period and other applicable requirements of Rule 144 under the Securities Act, the Company agrees to use its reasonable best efforts to:

(i)        make and keep adequate current public information with respect to the Company available, as those terms are understood and defined in Rule 144(c)(1) or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of this Agreement;

(ii)        so long as the Investor owns any of the Shares, furnish to the Investor forthwith upon request: (A) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 under the Securities Act, and of the Exchange Act; (B) a copy of the most recent annual or quarterly report of the Company; and (C) such other reports and documents as the Investor may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any of the Shares without registration; and

(iii)       to take such further action as the Investor may reasonably request, all to the extent required from time to time to enable the Investor to sell Shares without registration under the Securities Act.

3.11      Exchange Rights. The Investor shall have the right from time to time to exchange any of the shares of Class A Common Stock acquired by the Investor hereunder for Class C Common Stock in order to reduce its ownership of voting common stock to less than 4.9% of the then outstanding shares of Class A Common Stock. Any shares of Class C Common Stock received by the Investor or any Affiliate of the Investor pursuant to this Section 3.11 shall not be convertible by the Investor into shares of Class A Common Stock or any other voting security of the Company, and any such shares shall be subject to the restrictions set forth in the provisions of the Company’s certificate of incorporation relating to the Class C Common Stock.

ARTICLE 4.

TERMINATION

4.1         Termination. This Agreement may be terminated prior to the Closing:

(a)          by mutual written agreement of the Company and the Investor;

25

(b)        by either Party, upon written notice to the other Party in the event that the Closing does not occur on or before September 1, 2021; provided, however, that the right to terminate this Agreement pursuant to this Section 4.1(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;

(c)          by either Party, upon written notice to the other Party, in the event that (i) Stockholder Approval is required under applicable Law or the rules and regulations of the Nasdaq Stock Market, but has not been obtained on or prior to the closing date of the Merger or (ii) the Authorized Shares Increase Approval has not been obtained on or prior to the closing date of the Merger;

(d)          by the Investor, upon written notice to the Company, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Company in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(ii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in the absence of such breach or condition; provided that this Section 4.1(d) shall only apply if the Investor is not in material breach of any of the terms of this Agreement;

(e)          by the Company, upon written notice to the Investor, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Investor in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(iii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in absence of such breach or condition; provided that this Section 4.1(e) shall only apply if the Company is not in material breach of any of the terms of this Agreement; or

(f)        by any Party, upon written notice to the other Party, in the event that any Governmental Entity shall have issued any order, decree or injunction or taken any other action restraining, enjoining or prohibiting any of the transactions contemplated by this Agreement, and such order, decree, injunction or other action shall have become final and non-appealable.

4.2        Effects

      of Termination. In the event of any termination of this Agreement as provided in Section 4.1, this Agreement \(other than Section 3.4, this Article 4 and
  Article 6 of this Agreement, which shall remain in full force and effect\) shall forthwith become wholly void and of no further force and effect; provided, that nothing herein shall relieve any Party from liability for fraud or willful breach of this
  Agreement.

26

ARTICLE 5.

INDEMNITY

5.1         Indemnification

      by the Company.

(a)          After the Closing, and subject to Sections 5.1(b), 5.3 and 5.4, the Company shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Investor and its Affiliates, and their respective successors and assigns, officers, directors, partners, members and employees, as applicable, (the “Investor Indemnified Parties”) against and from, and reimburse any of the Investor Indemnified Parties for, all Losses that any of the Investor Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Company in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by the Company to perform any of its covenants or agreements contained in this Agreement.  Notwithstanding anything herein to the contrary, the obligations of the Company under this Section 5.1(a) shall not be applicable to or inure to the benefit of any transferee of the Common Stock sold pursuant to this Agreement who is not an Affiliate of the Investor.

(b)         Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless any of the Investor Indemnified Parties against, or reimburse any of the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) (other than Losses arising out of the inaccuracy or breach of any Company Specified Representations) until the aggregate amount of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a) exceeds $100,000 (the “Threshold Amount”), upon the occurrence of which the Company shall be obligated for all of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a).  Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless the Investor Indemnified Parties against, or reimburse the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1.

(c)        For purposes of Section 5.1(a), in determining whether there has been a breach of a representation or warranty, the Parties hereto shall ignore any “materiality,” “Material Adverse Effect” or similar qualifications.

5.2         Indemnification

      by the Investor.

(a)          After the Closing, and subject to Sections 5.2(b), 5.3 and 5.4, the Investor shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Company and its respective Affiliates and their respective successors and assigns, officers, directors, partners, members, employees, representatives and agents (collectively, the “Company Indemnified Parties”) against and from, and reimburse any of the Company Indemnified Parties for, all Losses that the Company Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Investor in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by such Investor to perform any of its covenants or agreements contained in this Agreement.

27

(b)          Notwithstanding anything to the contrary contained herein, the Investor shall not be required to indemnify, defend or hold harmless any of the Company Indemnified Parties against, or reimburse any of the Company Indemnified Parties for any Losses pursuant to Section 5.2(a)(1) until the aggregate amount of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a) exceeds the Threshold Amount, upon the occurrence of which the Investor shall be obligated for all of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a)(1).  Notwithstanding anything to the contrary contained herein, the Investor shall not be required to indemnify, defend or hold harmless the Company Indemnified Parties against, or reimburse the Company Indemnified Parties for, any Losses pursuant to Section 5.2(a)(1) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1 hereof.

(c)          For purposes of Section 5.2(a), in determining whether there has been a breach of a representation or warranty, the Parties shall ignore any “materiality” or similar qualifications.

5.3         Notification

      of Claims.

(a)        Any Person that may be entitled to be indemnified under this Article 5 (the “Indemnified Party”) shall promptly notify the party or parties liable for such indemnification (the “Indemnifying Party”) in writing of any claim in respect of which indemnity may be sought hereunder, including any pending or threatened claim or demand by a third party that the Indemnified Party has determined has given or could reasonably give rise to a right of indemnification under this Agreement (including a pending or threatened claim or demand asserted by a third party against the Indemnified Party) (each, a “Third Party Claim”), describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or demand; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Agreement except to the extent that the Indemnifying Party is materially prejudiced by such failure.  The Parties agree that notices for claims in respect of a breach of a representation, warranty, covenant or agreement must be delivered prior to the expiration of any applicable survival period specified in Section 6.1 for such representation, warranty, covenant or agreement; provided, that if, prior to such applicable date, a Party hereto shall have notified the other Party hereto in accordance with the requirements of this Section 5.3(a) of a claim for indemnification under this Agreement (whether or not formal legal action shall have been commenced based upon such claim), such claim shall continue to be subject to indemnification in accordance with this Agreement notwithstanding the passing of such applicable date.

28

(b)         Upon receipt of a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) in respect of a Third Party Claim, the Indemnifying Party may, by notice to the Indemnified Party delivered within twenty (20) Business Days of the receipt of notice of such Third Party Claim, assume the defense and control of any Third Party Claim, with its own counsel reasonably acceptable to the Indemnified Party and at its own expense.  The Indemnified Party shall have the right to employ counsel on its own behalf for, and otherwise participate in the defense of, any such Third Party Claim, but the fees and expenses of its counsel will be at its own expense unless (A) the employment of counsel by the Indemnified Party at the Indemnifying Party’s expense has been authorized in writing by the Indemnifying Party, (B) the Indemnified Party reasonably believes there may be a conflict of interest between the Indemnified Party and the Indemnifying Party in the conduct of the defense of such Third Party Claim, (C) the Indemnified Party reasonably believes there are legal defenses available to it that are different from, additional to or inconsistent with those available to the Indemnifying Party, or (D) the Indemnifying Party has not in fact employed counsel to assume the defense of such Third Party Claim within a reasonable time after receipt of notice of the commencement of such Third Party Claim, in each of which cases the fees and expenses of such Indemnified Party’s counsel shall be at the expense of the Indemnifying Party; provided, however, that in the event that the Company is required to assume the fees and expenses of such Investor Indemnified Party’s counsel in accordance with the foregoing and such Investor Indemnified Party is similarly situated with any other “Investor Indemnified Party” under any of the other stock purchase agreements with respect to any Third Party Claim, and does not have any conflict of interest with such Person in the conduct of the defense of such Third Party Claim or have legal defenses available to it that are different from, additional to or inconsistent with those available to such Person, such Investor Indemnified Party shall be required to employ the same counsel as such Person and the Company shall be responsible for the fees and expenses of only one such counsel for such Investor Indemnified Party and such other Person or Persons (assuming any of clauses (A) through (D) above is satisfied).  The Indemnified Party may take any actions reasonably necessary to defend such Third Party Claim prior to the time that it receives a notice from the Indemnifying Party as contemplated by the immediately preceding sentence.  The Indemnified Party shall, and shall cause each of its Affiliates and representatives to, use reasonable best efforts to cooperate with the Indemnifying Party in the defense of any Third Party Claim.  The Indemnifying Party shall not, without the prior written consent of the Indemnified Party (which shall not be unreasonably withheld or delayed), consent to a settlement, compromise or discharge of, or the entry of any judgment arising from, any Third Party Claim, unless such settlement, compromise, discharge or entry of any judgment does not involve any statement, finding or admission of any fault, culpability, failure to act, violation of Law or admission of any wrongdoing by or on behalf of the Indemnified Party, and the Indemnifying Party shall (i) pay or cause to be paid all amounts arising out of such settlement or judgment concurrently with the effectiveness of such settlement or judgment (unless otherwise provided in such judgment), (ii) not encumber any of the assets of any Indemnified Party or agree to any restriction or condition that would apply to or materially adversely affect any Indemnified Party or the conduct of any Indemnified Party’s business and (iii) obtain, as a condition of any settlement, compromise, discharge, entry of judgment (if applicable), or other resolution, a complete and unconditional release of each Indemnified Party in form and substance reasonably satisfactory to such Indemnified Party from any and all liabilities in respect of such Third Party Claim.  An Indemnified Party shall not settle, compromise or consent to the entry of any judgment with respect to any claim or demand for which it is seeking indemnification from the Indemnifying Party or admit to any liability with respect to such claim or demand without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed); provided, that such consent shall not be required if the Indemnifying Party has not fulfilled any material obligations under this Section 5.3(b).

(c)         In the event any Indemnifying Party receives a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) that does not involve a Third Party Claim, the Indemnifying Party shall notify the Indemnified Party within twenty (20) Business Days following its receipt of such notice whether the Indemnifying Party disputes its liability to the Indemnified Party under this Agreement.  The Indemnified Party shall reasonably cooperate with and assist the Indemnifying Party in determining the validity of any such claim for indemnity by the Indemnified Party.

29

5.4         Indemnification Payment. In the event a claim or any Action for indemnification hereunder has been finally determined, the amount of such final determination shall be paid by the Indemnifying Party to the Indemnified Party on demand in immediately available funds.  A claim or an Action, and the liability for and amount of damages therefor, shall be deemed to be “finally determined” for purposes of this Agreement when the Parties have so determined by mutual agreement or, if disputed, when a final non-appealable judicial order has been entered into with respect to such claim or Action.

5.5     Exclusive

      Remedies. Subject to Section 6.14, each Party acknowledges and agrees that following the Closing, the indemnification provisions hereunder shall
  be the sole and exclusive remedies of the Parties for any breach of the representations, warranties or covenants contained in this Agreement.  No investigation of the Company by the Investor, or of the Investor by the Company, whether prior to or
  after the date of this Agreement, shall limit any Indemnified Party’s exercise of any right hereunder or be deemed to be a waiver of any such right.  The Parties agree that any indemnification payment made pursuant to this Agreement shall be treated
  as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

ARTICLE 6.

MISCELLANEOUS

6.1         Survival.  The representations and warranties of the Parties contained in this Agreement shall survive in full force and effect until the date that is fifteen (15) months after the Closing Date (or until final resolution of any claim or action arising from the breach of any such representation and warranty, if notice of such breach was provided prior to the end of such period), at which time they shall terminate and no claims shall be made for indemnification under Section 5.1 or Section 5.2, as applicable, for breaches of representations or warranties thereafter, except the Company Specified Representations (other than the representations and warranties made in Section 2.2(v), which shall survive until the expiration of the applicable statute of limitations) and the Investor Specified Representations shall survive the Closing indefinitely.  The covenants and agreements set forth in this Agreement shall survive until the expiration of any applicable statute of limitations or until performed or no longer operative in accordance with their respective terms.  Notwithstanding the foregoing, the Company Specified Representations shall survive for the period of the applicable statute of limitations.

6.2        Other

      Definitions. Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall
  include the feminine and neuter genders and vice versa, and references to any agreement, document or instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time.  In addition,
  the following terms shall have the meanings assigned to them below:

(a)        the term “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person provided that no security holder of the Company shall be deemed to be an Affiliate of any other security holder or of the Company or any of the Company Subsidiaries solely by reason of any investment in the Company and, for purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under 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 or policies of such Person, whether through the ownership of voting securities, by contract or otherwise;

30

(b)       the term “Agency” means the Federal Housing Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home Administration (now known as Rural Housing and Community Development Services), the Federal National Mortgage Association, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture or any other federal or state agency with authority to (i) determine any investment, origination, lending or servicing requirements with regard to mortgage loans originated, purchased or serviced by the Company or (ii) originate, purchase, or service mortgage loans, or otherwise promote mortgage lending, including state and local housing finance authorities;

(c)          the term “Board of Directors” means the Board of Directors of the Company;

(d)          the term “Business Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York or in the State of California generally are authorized or required by Law or other governmental actions to close;

(e)          the term “Capital Stock” means the capital stock or other applicable type of equity interest in a Person;

(f)          the term “Code” means the Internal Revenue Code of 1986, as amended;

(g)         the term “Company Specified Representations” means the representations and warranties made in Section 2.2(a), Section 2.2(b), Section 2.2(c), Section 2.2(d), Section 2.2(x), Section 2.2(z) and Section 2.2(hh);

(h)        the term “Disclosure Schedule” shall mean a schedule delivered, on or prior to the date of this Agreement, by (i) the Investor to the Company and (ii) the Company to the Investor setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in Section 2.2 with respect to the Company, or in Section 2.3 with respect to the Investor, or to one or more covenants contained in Article 3;

(i)          the term “GAAP” means United States generally accepted accounting principles and practices as in effect from time to time;

(j)          the term “Governmental Consent” means any notice to, registration, qualification, designation, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Entity, or the expiration or termination of any statutory waiting periods;

31

(k)      the term “Governmental Entity” means any court, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign, and any applicable industry self-regulatory organization or securities exchange;

(l)          the term “Insurer” means a Person who insures or guarantees for the benefit of the mortgagee all or any portion of the risk of loss upon borrower default on any of the mortgage loans originated, purchased or serviced by the Bank, including the Federal Housing Administration, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any private mortgage insurer, and providers of hazard, title or other insurance with respect to such mortgage loans or the related collateral;

(m)       the term “Investor Specified Representations” means the representations and warranties made in Section 2.3(b)(i), Section 2.3(d) and Section 2.3(f);

(n)        the term “Knowledge” of the Company and words of similar import mean the knowledge of any directors or executive officers of the Company listed on the Disclosure Schedule hereto;

(o)        the term “Loan Investor” means any Person (including an Agency) having a beneficial interest in any mortgage loan originated, purchased or serviced by the Bank or a security backed by or representing an interest in any such mortgage loan;

(p)        the term “Losses” means any and all losses, damages, reasonable costs, reasonable expenses (including reasonable attorneys’ fees and disbursements), liabilities, settlement payments, awards, judgments, fines, obligations, claims, and deficiencies of any kind, excluding special, consequential, exemplary and punitive damages;

(q)         the term “Person” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, Governmental Entity or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity;

(r)         the term “Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company or other entity (x) of which such Person or a Subsidiary of such Person is a general partner or (y) of which a majority of the voting securities or other voting interests, or 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;

(s)        the term “Tax” or “Taxes” means all United States federal, state, local or foreign income, profits, estimated, gross receipts, windfall profits, severance, property, intangible property, occupation, production, sales, use, license, excise, emergency excise, franchise, capital gains, capital stock, employment, withholding, transfer, stamp, payroll, goods and services, value added, alternative or add-on minimum tax, or any other tax, custom, duty or governmental fee, or other like assessment or charge of any kind whatsoever, together with any interest, penalties, fines, related liabilities or additions to tax that may become payable in respect thereof imposed by any Governmental Entity, whether or not disputed;

32

(t)          the term “Tax Return” means any return, declaration, report or similar statement required to be filed with respect to any Taxes (including any attached schedules), including, without limitation, any information return, claim or refund, amended return and declaration of estimated Tax;

(u)         the term “Voting Securities” means at any time shares of any class of Capital Stock of the Company, including but not limited to Voting Common Stock (or, after giving effect to the Merger Transactions, Class A Common Stock), and Voting Debt that are then entitled to vote generally in the election of directors;

(v)          the word “or” is not exclusive;

(w)        the words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”;

(x)        the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision; and

(y)       all article, section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit and schedule references not attributed to a particular document shall be references to such exhibits and schedules to this Agreement.

6.3        Amendment

      and Waivers. The conditions to each Party’s obligation to consummate the Closing are for the sole benefit of such Party and may be waived by such Party
  in whole or in part to the extent permitted by Law.  No amendment or waiver of any provision of this Agreement will be effective against any Party unless it is in a writing signed by a duly authorized officer of such Party.

6.4       Counterparts

      and Facsimile. For the convenience of the Parties, this Agreement may be executed in any number of separate counterparts, each such counterpart being
  deemed to be an original instrument, and all such counterparts will together constitute the same agreement.  Executed signature pages to this Agreement may be delivered by facsimile and such facsimiles shall be deemed as sufficient as if manually
  signed signature pages had been delivered.

6.5        Governing

      Law. This Agreement will be governed by and construed in accordance with the Laws of the State of Delaware applicable to contracts made and to be
  performed entirely within such State.

6.6        WAIVER

      OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES EACH HEREBY IRREVOCABLY WAIVES ANY
  RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY WHETHER BASED ON CONTRACT, EQUITY, TORT OR ANY OTHER THEORY.  THIS WAIVER OF RIGHT TO TRIAL BY JURY
  IS GIVEN BY EACH OF THE PARTIES, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF THEIR RESPECTIVE COMPETENT LEGAL COUNSEL.

33

6.7          Notices. Any notice, request, instruction or other document to be given hereunder by any Party to the other will be in writing and will be deemed to have been duly given (a) on the date of delivery if delivered personally or by telecopy or facsimile, upon confirmation of receipt, (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid, provided that any such notice, request, instruction or other document to be given hereunder shall not be deemed to have been duly given unless and until it is sent via electronic mail to the recipient thereof.  All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice.

(a)          If to the Investor, to the address set forth on the Investor’s signature page to this Agreement.

(b)          If to the Company:

Broadway Financial Corporation

5055 Wilshire Boulevard, Suite 500

Los Angeles, California 90036

Attn: Brenda Battey,

Chief Financial Officer

Email: bbattey@broadwayfederalbank.com

with a copy (which copy shall not constitute notice) to:

Arnold & Porter LLP

777 South Figueroa Street,

44th Floor

Los Angeles, California 90017

Attn: James R. Walther, Esq.

Fax: (213) 243-4199

Email: James.Walther@arnoldporter.com

6.8      Entire

      Agreement. This Agreement constitutes the entire agreement, and supersede all other prior agreements, understandings, representations and warranties,
  inducements or conditions, both written and oral, among the Parties, with respect to the subject matter hereof and thereof.

6.9         Successors

      and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns, including any
  purchasers of the Common Stock to be issued pursuant to this Agreement.  The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor.  The Investor may assign some or all of its
  rights hereunder or thereunder without the consent of the Company to any Affiliate of the Investor, and such assignee shall be deemed to be an Investor hereunder with respect to such assigned rights and shall be bound by the terms and conditions of
  this Agreement that apply to the Investor.

34

6.10       Captions. The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.

6.11      Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon 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.

6.12      Third

      Party Beneficiaries. Nothing contained in this Agreement, expressed or implied, is intended to confer upon any Person other than the Parties, any benefit
  right or remedies, except that the Placement Agents may rely on the representations and warranties contained herein to the same extent as if they were party to this Agreement and the provisions of Sections 5.1 and 5.2 shall inure to the benefit of
  the Persons referred to in such Sections.

6.13      Public

      Announcements. The Investor will not make \(and will use its reasonable best efforts to ensure that its Affiliates and
    representatives do not make\) any news release or public disclosure with respect to this Agreement and any of the transactions contemplated hereby, without first consulting with the Company and, in each case, also receiving the Company’s consent
    \(which shall not be unreasonably withheld, conditioned or delayed\).

6.14       Specific Performance. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms.  It is accordingly agreed that the Parties shall be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity.

6.15       No Recourse to Other Persons. This Agreement may only be enforced against the named Parties.  All claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may be made only against the entities that are expressly identified as Parties or that are subject to the terms hereof, and no past, present or future director, officer, employee, incorporator, member, manager, partner, stockholder, Affiliate, agent, attorney or representative of any Party (including any person negotiating or executing this Agreement on behalf of a Party) shall have any liability or obligation with respect to this Agreement or with respect to any claim or cause of action, whether in tort, contract or otherwise, that may arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement and the transactions contemplated hereby.

[signature page follows]

35

IN WITNESS WHEREOF, the Parties 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:
Name: Wayne-Kent A. Bradshaw
Title: President and Chief Executive Officer

[Stock Purchase Agreement]

ALLY VENTURES, A BUSINESS UNIT OF <br><br> ALLY FINANICAL INC.
By:
Name:
Title:
Address for notices:
---
300 Park Avenue, Floor 4<br><br> <br>New York, New York 10022
Attention:  Peter Greene
Managing Director, Head of  M&A and Ally Ventures
Email:  peter.greene@ally.com
With a copy to:
Ally Financial Inc.
500 Woodward Avenue<br><br> <br>Detroit, Michigan 48226
Attention:  Richard Kent
Deputy General Counsel
Email:  Richard.kent@ally.com

[Stock Purchase Agreement]

Exhibit 10.25

EXECUTION VERSION

BROADWAY FINANCIAL CORPORATION

STOCK PURCHASE AGREEMENT

February 19, 2021

TABLE OF CONTENTS

Page
ARTICLE 1. PURCHASE; CLOSING 2
1.1 Issuance, Sale and Purchase 2
1.2 Closing; Deliverables for the Closing; Conditions to the Closing 2
ARTICLE 2. REPRESENTATIONS AND WARRANTIES 4
2.1 Certain Terms 4
2.2 Representations and Warranties of the Company 5
2.3 Representations and Warranties of the Investor 19
ARTICLE 3. COVENANTS 22
3.1 Conduct of Business Prior to Closing 22
3.2 Use of Proceeds 22
3.3 Regulatory Filings 22
3.4 Confidentiality 22
3.5 Publicity 22
3.6 Commercially Reasonable Efforts 23
3.7 Legend. 23
3.8 Exchange Listing 24
3.9 Authorized Shares 24
3.10 Rule 144 Reporting 24
3.11 Exchange Rights 24
ARTICLE 4. TERMINATION 25
4.1 Termination 25
4.2 Effects of Termination 25
ARTICLE 5. INDEMNITY 26
5.1 Indemnification by the Company 26
5.2 Indemnification by the Investor 26
5.3 Notification of Claims 27
5.4 Indemnification Payment 29
5.5 Exclusive Remedies 29
ARTICLE 6. MISCELLANEOUS 29
6.1 Survival 29
6.2 Other Definitions 30

i

6.3 Amendment and Waivers 32
6.4 Counterparts and Facsimile 32
6.5 Governing Law 33
6.6 WAIVER OF JURY TRIAL 33
6.7 Notices 33
6.8 Entire Agreement 33
6.9 Successors and Assigns 34
6.10 Captions 34
6.11 Severability 34
6.12 Third Party Beneficiaries 34
6.13 Public Announcements 34
6.14 Specific Performance 34
6.15 No Recourse to Other Persons 35

INDEX OF DEFINED TERMS

Page
Action 8
Affiliate 30
Agency 30
Agreement 1
Authorized Shares Increase Approval 3
Bank 5
Bank Merger 1
Benefit Plans 15
Board of Directors 30
Business Day 30
Capital Stock 30
CDFI 5
CFB 1
CFB Sub 1
Class A Common Stock 1
Class B Common Stock 1
Class C Common Stock 1
Closing 2
Closing Date 2
Code 30
Common Stock 1
Company 1

ii

Company Employees 15
Company Financial Statements 8
Company Indemnified Parties 26
Company Insurance Policies 14
Company IT Assets 10
Company Reports 9
Company Specified Representations 30
Company Stock Plan 7
Company Subsidiaries 6
Company Subsidiary 6
Concurrent Other Transactions 1
control 30
controlled by 30
controlling 30
Disclosure Schedule 30
Disqualification Event 18
EESA 16
ERISA 15
ERISA Affiliate 16
Exchange Act 9
FDIC 6
Federal Reserve 5
GAAP 31
Governmental Authorizations 13
Governmental Consent 31
Governmental Entity 31
Indemnified Party 27
Indemnifying Party 27
Insider 18
Insurer 31
Intellectual Property Rights 15
Investment 1
Investor 1
Investor Indemnified Parties 26
Investor Specified Representations 31
Knowledge 31
Law 13
Liens 8
Loan Investor 31
Losses 31
Material Adverse Effect 4
Merger 1
Merger Agreement 1
Merger Transactions 1
Multiemployer Plan 16
Non-Voting Common Stock 6

iii

OFAC 12
Parties 1
Per Share Purchase Price 2
Person 31
Personal Information 11
Placement Agents 1
Preferred Stock 6
Previously Disclosed 5
Privacy Laws 11
Purchase Price 2
Registration Statement 21
Rule 506 18
SEC 5
Securities Act 7
Shares 2
SLHCA Act 5
Stockholder Approval 3
Subsidiary 31
Surviving Bank 1
Tax 32
Tax Return 32
Taxes 32
Third Party Claim 27
Threshold Amount 26
under common control with 30
Voting Common Stock 6
Voting Debt 7
Voting Securities 32

iv

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Agreement”) is dated as of February 19, 2021, and is entered into by and among Broadway Financial Corporation, a Delaware corporation (the “Company”),

        and Banner Bank, a bank corporation incorporated in the state of Washington \(the “Investor”, and together with the Company, the “Parties”\).

RECITALS

WHEREAS, the Company is a party to that certain Agreement and Plan of Merger (the “Merger Agreement”) with CFBanc Corporation, a District of Columbia benefit corporation (“CFB”) which provides, among other things and subject to the terms and conditions of the Merger Agreement, for (i) the merger of CFB with and into the Company, with the Company continuing as the surviving entity in the Merger (the “Merger”), (ii) immediately

        following the Merger, Broadway Federal Bank, f.s.b., a wholly owned subsidiary of the Company, will merge with and into City First Bank of D.C., National Association \(“CFB Sub”\), a wholly owned subsidiary of CFB \(the “Bank Merger” and together with the Merger and the

      other transactions contemplated by the Merger Agreement, the “Merger Transactions”\), with CFB Sub continuing as the surviving entity \(the “Surviving Bank”\), and \(iii\) the Company’s voting common stock, par value $0.01 per share, will be renamed Class A Common Stock \(“Class A Common Stock”\), a new class of non-voting common stock of the Company, par value $0.01 per share, will be created which will be named Class B Common Stock \(“Class

          B Common Stock”\) and the Company’s currently authorized non-voting common stock, par value $0.01 per share, will be renamed Class C Common Stock \(the “Class C Common Stock” and
      collectively, the “Common Stock”\);

WHEREAS, the Company has engaged Raymond James & Associates, Inc. and Keefe, Bruyette & Woods, Inc. as co-placement agents (the “Placement Agents”) for the offering of the Common Stock.

WHEREAS, the Company desires to issue and sell to the Investor, and the Investor desires to purchase from the Company, on the terms and conditions described herein, shares of Class A Common Stock at the Per Share Purchase Price specified herein (the “Investment”);

WHEREAS, the Investment is proposed to be made subject to completion of the Merger Transactions;

WHEREAS, the Investment is proposed to be made concurrently with the sale by the Company of shares of Class A Common Stock and Class C Common Stock at the Per Share Purchase Price via private placement to certain other investors (the “Concurrent Other Transactions”); and

NOW, THEREFORE, in consideration of the premises, and of the respective representations, warranties, covenants and other agreements of the Parties set forth herein, the Parties hereby agree as follows:

ARTICLE 1.

PURCHASE; CLOSING

1.1        Issuance, Sale and Purchase.  On the terms and subject to the conditions set forth herein, the Company agrees to issue and sell to the Investor, and the Investor agrees to purchase from the Company, free and clear of any Liens, 561,797 shares of Class A Common Stock (the “Shares”) at a per share purchase price of $1.78 (the “Per Share Purchase Price”), payable to the Company in immediately available funds at the Closing.  The aggregate purchase price payable pursuant to this Section 1.1 is referred to herein as the “Purchase Price”).

1.2         Closing; Deliverables for the Closing; Conditions to the Closing.

(a)        Closing.  Unless this Agreement has been terminated pursuant to Article 4, and subject to the satisfaction or, to the extent permitted by Law and this Agreement, the written waiver of the conditions set forth in Section 1.2(c), the closing of the transaction contemplated by this Agreement (the “Closing”) shall take place at the offices of Arnold & Porter LLP, located at 777 South Figueroa Street, 44th Floor, Los Angeles, California 90017, or remotely via the electronic or other exchange of documents and signature pages, at 9:00 a.m. Pacific Time on the second Business Day after the satisfaction or, if permissible, waiver of the conditions set forth in Section 1.2(c) (other than those which by their nature are to be satisfied at Closing, but subject to the satisfaction or waiver of such conditions), or at such other place or such other date as may be agreed to by the Parties (the “Closing Date”).

(b)          Closing Deliverables.  Subject to the satisfaction or permitted waiver of the conditions to the Closing set forth in Section 1.2(c), at the Closing the Parties shall make the following deliveries:

(i)          the Company shall deliver to the Investor one or more certificates evidencing the Shares registered in the name of the Investor (or if the Shares are to be uncertificated, the Company shall deliver appropriate evidence of such registration of the Shares in the name of the Investor);

(ii)       the Company shall deliver to the Investor a schedule setting forth the aggregate number of shares of each class of Capital Stock outstanding immediately after giving effect to the Merger Transactions, the Concurrent Other Transactions and the transactions contemplated hereby; and

(iii)        the Investor shall deliver the Purchase Price by wire transfer of immediately available funds to the account specified by the Company for this purpose by notice to the Investor prior to the Closing.

(c)          Closing Conditions.

(i)         The obligations of the Investor, on the one hand, and the Company, on the other hand, to consummate the purchase and sale of the Shares provided for in this Agreement are each subject to the satisfaction or, to the extent permitted by Law and this Agreement, the waiver by the Company or the Investor, as applicable, of the following conditions to the Closing under this Agreement:

2

(A)          All Governmental Consents required to have been obtained at or prior to the Closing Date in connection with the execution, delivery or performance of this Agreement and the consummation of the transactions contemplated hereby shall have been obtained and shall be in full force and effect.

(B)          The Merger Transactions shall have been consummated in accordance with the Merger Agreement, including the approval of the Merger Agreement by the stockholders of each of the Company and CFB;

(C)          If required under applicable Law or the rules and regulations of the Nasdaq Stock Market, the approval by stockholders of the Company of resolutions providing for the Company’s issuance of the maximum number of shares of Common Stock to be issued under this Agreement and in the Concurrent Other Transactions in accordance with this Agreement, the definitive documentation relating to the Concurrent Other Transactions, and applicable Law and the rules and regulations of the Nasdaq Stock Market (such approval being referred to herein as the “Stockholder Approval”) shall have been obtained;

(D)        Approval by the stockholders of the Company to increase in the authorized number of shares of Voting Common Stock (which will become Class A Common Stock upon completion of the Merger) from 50,000,000 shares to 75,000,000 shares, to be effected by the filing of an amended and restated certificate of incorporation of the Company (the “Authorized Shares Increase Approval”), shall have been obtained.

(ii)         The obligation of the Investor to consummate the purchase of Shares provided for in this Agreement is also subject to the satisfaction or waiver by the Investor of the following conditions to the Closing:

(A)          (i) The  Company Specified Representations shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date and (ii) the other representations and warranties of the Company set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except, in the case of this clause (ii) only, to the extent that the failure to be true and correct (without regard to any materiality or Material Adverse Effect qualifications contained therein), would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and except, in the case of clauses (i) and (ii), that representations and warranties made as of a specified date shall be true and correct as of such date;

(B)          The Company shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date;

(C)          The Investor shall have received a certificate, dated as of the Closing Date, signed on behalf of the Company by a senior executive officer certifying to the effect that the conditions set forth in Section 1.2(c)(ii)(A), Section 1.2(c)(ii)(B) and Section 1.2(c)(ii)(D) have been satisfied on and as of the Closing Date;

3

(D)          Since the date of this Agreement, no Material Adverse Effect shall have occurred and no change or other event shall have occurred that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(iii)        The obligation of the Company to consummate the sale of the Shares provided for in this Agreement is also subject to the satisfaction or written waiver by the Company of the following conditions to the Closing:

(A)          The representations and warranties of the Investor set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except to the extent that the failure to be true and correct (without regard to any materiality qualifications contained therein) would not materially adversely affect the ability of the Investor to perform its obligations hereunder and except that (1) representations and warranties made as of a specified date shall be true and correct as of such date and (2) the representations and warranties of the Investor set forth in Sections 2.3(d) and 2.3(f) shall be true and correct in all respects;

(B)          The Investor shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date; and

(C)          The Company shall have received a certificate, dated as of the Closing Date, signed on behalf of the Investor by a duly authorized person certifying to the effect that the conditions set forth in Section 1.2(c)(iii)(A) and Section 1.2(c)(iii)(B) have been satisfied on and as of the Closing Date.

ARTICLE 2.

REPRESENTATIONS AND WARRANTIES

2.1         Certain Terms.

(a)         As used in this Agreement, the term “Material Adverse Effect” means any circumstance, event, change, development or effect that, individually or in the aggregate, would reasonably be expected to (i) result in a material adverse effect on the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole, or (ii) materially impair or delay the ability of the Company or any of the Company Subsidiaries to perform its or their obligations under this Agreement to consummate the Closing or any of the transactions contemplated hereby; provided, however, that in determining whether a Material Adverse Effect has occurred under clause (i), there shall be excluded any circumstance, event, change, development or effect to the extent resulting from (A) actions or omissions of the Company or any Company Subsidiary expressly required or contemplated by the terms of this Agreement, (B) changes after the date hereof in general economic conditions in the United States, including financial market volatility or downturns, or in the markets in which the Company and the Company Subsidiaries operate, (C) changes after the date hereof affecting the banking industry generally, (D) any changes after the date hereof in applicable Laws or accounting rules or principles, including changes in GAAP, (E) changes in the market price or trading volume of the Common Stock or the Company’s other outstanding securities (but not the underlying causes of such changes), (F) any epidemic, pandemic or disease outbreak (including the Covid-19 virus) including any worsening of such conditions; or (G) any failure by the Company or any of the Company Subsidiaries to meet any internal projections or forecasts with regard to the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole (but not the underlying causes of such failure), in each case to the extent that such circumstance, event, change, development or effect referred to in clauses (B), (C) and (D) do not have a disproportionate effect on the Company and the Company Subsidiaries compared to other participants in the industries or markets in which the Company and the Company Subsidiaries operate.

4

(b)        As used in this Agreement, the term “Previously Disclosed” (i) with regard to any Party, means information set forth in its Disclosure Schedule under Section references corresponding with the provision of this Agreement to which such information relates (including, in the case of the Company, information identified in the Company’s Disclosure Schedule); provided, however, that if such information is disclosed in such a way as to make its relevance or applicability to another provision of this Agreement reasonably apparent on its face, such information shall be deemed to be responsive to such other provision of this Agreement and (ii) with regard to the Company, includes information publicly disclosed by the Company in any reports, schedules, forms, statements and other documents filed or furnished by the Company under the Securities Act and the Exchange Act with the Securities and Exchange Commission (the “SEC”), including pursuant to Section 13(a) or 15(d) thereof, since December 31, 2017, in each case available prior to the date of this Agreement (excluding any risk factor disclosures contained in such documents under the heading “Risk Factors” and any disclosure of risks included in any “forward-looking statements” disclaimer or other statements that are similarly non-specific and are predictive or forward-looking in nature). Notwithstanding anything in this Agreement to the contrary, the mere inclusion of an item in a Disclosure Schedule shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

2.2         Representations and Warranties of the Company.  Except as Previously Disclosed, the Company hereby represents and warrants to the Investor, as of the date of this Agreement and as of the Closing Date (except for the representations and warranties that are as of a specific date, which are made as of that date) that:

(a)          Organization and Authority.  Each of the Company and the Company Subsidiaries is a corporation or other entity duly organized and validly existing under the laws of the jurisdiction of its incorporation or organization. Each of the Company and the Company Subsidiaries is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, except where any failure to be so qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Each of the Company and the Company Subsidiaries has the corporate or other organizational power and authority to own its properties and assets and to carry on its business as it is now being conducted.  The Company has Previously Disclosed correct and complete copies of the certificate of incorporation and bylaws (or similar governing documents) as amended through the date of this Agreement for the Company and Broadway Federal Bank, f.s.b. (the “Bank”).  The Company is duly registered with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) as a savings and loan holding company under the Savings and Loan Holding Company Act, as amended, 12 U.S.C. 1467a (the “SLHCA Act”).  As of the date hereof, the Company is a certified “community development financial institution” designated as such under the Community Development Banking and Financial Institutions Act of 1994, as amended (12 U.S.C. Sections 5311 et seq.) and its implementing regulations, as applicable (a “CDFI”).  Following the consummation of the Bank Merger, the Surviving Bank will apply to be designated as a CDFI.

5

(b)         Company Subsidiaries.  As of the date of this Agreement, the Company has Previously Disclosed a true, complete and correct list of each entity in which the Company, directly or indirectly, owns sufficient capital stock or holds a sufficient equity or similar interest such that it is consolidated with the Company in the financial statements of the Company or has the power to elect a majority of the board of directors or other persons performing similar functions (each, a “Company Subsidiary” and, collectively, the “Company Subsidiaries”).

      Except for the Company Subsidiaries and as Previously Disclosed, the Company does not own beneficially or control, directly or indirectly, more than 5% of any class of equity securities or similar interests of any corporation, bank, business
      trust, association or similar organization, and is not, directly or indirectly, a partner in any general partnership or party to any joint venture or similar arrangement.  The Company owns, directly or indirectly, all of its interests in each
      Company Subsidiary free and clear of any and all Liens.  No equity security of any Company Subsidiary is or may be required to be issued by reason of any option, warrant, scrip, preemptive right, right to subscribe to, gross-up right, call or
      commitment of any character whatsoever relating to, or security or right convertible into, shares of any capital stock or other interest of such Company Subsidiary, and there are no contracts, commitments, understandings or arrangements by which
      any Company Subsidiary is bound to issue additional shares of its capital stock or other interest, or any option, warrant or right to purchase or acquire any additional shares of its capital stock.  The deposit accounts of the Bank are insured by
      the Federal Deposit Insurance Corporation \(“FDIC”\) to the fullest extent permitted by the Federal Deposit Insurance Act, as amended, and the rules and regulations of the FDIC thereunder, and all
      premiums and assessments required to be paid in connection therewith have been paid when due \(after giving effect to any applicable extensions\). The Company beneficially owns all of the outstanding capital securities of, and has sole control of,
      the Bank.

(c)          Capitalization.

(i)         Except as set forth on the Disclosure Schedule, as of the date hereof, the authorized Capital Stock of the Company consists of 50,000,000 shares of Voting Common Stock, par value $0.01 per share (“Voting Common Stock”), 25,000,000 shares of Non-Voting Common Stock, par value $0.01 (“Non-Voting Common Stock”), and 1,000,000 shares of preferred stock, par value $0.01 (“Preferred Stock”).

(ii)        As of the date hereof, before giving effect to the transaction provided for herein, the Merger Transactions and the Concurrent Other Transactions the Company has issued and outstanding: (i) 19,281,758 of shares of Voting Common Stock, including 556,169 shares of Voting Common Stock granted in respect of outstanding restricted stock awards, (ii) 1,637,902 shares of Voting Common Stock held by the trust for the Broadway Federal Bank, f.s.b. Employee Stock Ownership Plan, and (iii) 8,756,396 shares of Non-Voting Common Stock.

6

(iii)        As of the date hereof, other than in respect of awards outstanding under or issuable pursuant to the Company’s 2008 Long-Term Incentive Plan (the “Company

          Stock Plan”\) consisting of options to purchase an aggregate of 450,000 shares of common stock, and except in connection with this Agreement and the transactions contemplated hereby, the Merger Agreement and the Concurrent Other
      Transactions, the Company has not \(A\) agreed to issue or authorized the issuance after the date hereof of any shares of Common Stock or Preferred Stock, or any securities convertible into or exchangeable or exercisable for shares of Common Stock
      or Preferred Stock, \(B\) reserved for issuance any shares of Capital Stock of the Company or \(C\) repurchased or redeemed, or agreed to or authorized the repurchase or redemption of, any shares of Capital Stock of the Company.

(iv)       All of the issued and outstanding shares of Capital Stock of the Company have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, except for the preemptive rights granted to certain institutional stockholders of the Company identified on Schedule 2.2(c)(iv) of the Company’s Disclosure Schedule.  None of the outstanding shares of Capital Stock or other securities of the Company or any of the Company Subsidiaries was issued, sold or offered by the Company or any Company Subsidiary in violation of the Securities Act of 1933, as amended (the “Securities Act”) or the securities or blue sky laws of any state or jurisdiction, or in violation of any agreement, arrangement or commitment to which the Company was or is a party or subject, or in violation of any preemptive or similar rights of any Person.  No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which the stockholders of the Company may vote (“Voting Debt”) are issued and outstanding.

(v)         As of the date of this Agreement, except for the outstanding awards under the Company Stock Plan, the Company does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of, or securities or rights convertible into or exchangeable or exercisable for, any shares of Capital Stock or Voting Debt of the Company.

(d)          Authorization; No Conflicts.

(i)          The Company has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The Board of Directors has approved the transactions contemplated by this Agreement.  This Agreement has been duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery by the Investor, is the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles (whether applied in equity or at law).

7

(ii)        Neither the execution and delivery by the Company of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by the Company with any of the provisions hereof, will, with or without the passage of time and giving of notice, (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any liens, charges, adverse rights or claims, pledges, covenants, title defects, security interests or other encumbrances of any kind (“Liens”) upon any of the properties or assets of the Company or any Company Subsidiary, under any of the terms, conditions or provisions of (1) the certificate of incorporation or bylaws (or similar governing documents) of the Company and each Company Subsidiary or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any of the Company Subsidiaries is a party or by which it may be bound, or to which the Company or any of the Company Subsidiaries, or any of the properties or assets of the Company or any of the Company Subsidiaries may be subject, or (B) violate any Law applicable to the Company or any of the Company Subsidiaries or any of their respective properties or assets except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(e)          Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of this Agreement or for the sale by the Company of Common Stock to the Investor pursuant to this Agreement.

(f)         Litigation and Other Proceedings.  Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, or as would not reasonably be expected to adversely impact the reputation of the Company, the Company Subsidiaries or their respective investors in any material respect, there is no pending or, to the Knowledge of the Company, threatened claim, action, suit, arbitration, complaint, charge or investigation or proceeding (each an “Action”) against the Company or any Company Subsidiary or any of their respective assets, rights or properties, nor is the Company or any Company Subsidiary a party or named as subject to the provisions of any order, writ, injunction, settlement, judgment or decree of any court, arbitrator or government agency, or instrumentality.  There has not been, and to the Knowledge of the Company, there is not pending or contemplated, any investigation or other Action by the SEC involving the Company or any current or former director or officer of the Company in his or her capacity as such.

(g)          Financial Statements.  The audited consolidated balance sheets of the Company and the Company Subsidiaries and the related consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2019 and the unaudited consolidated balance sheets of the Company and the Company Subsidiaries and the related unaudited consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s quarterly reports on Form 10-Q filed with the SEC for the quarterly period ending September 30, 2020 (the “Company Financial Statements”) (i) have been prepared from, and are in accordance with, the books and records of the Company and the Company Subsidiaries, (ii) complied, as of the date of such filing, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, (iii) have been prepared in accordance with GAAP applied on a consistent basis and (iv) present fairly in all material respects the consolidated financial position of the Company and the Company Subsidiaries at the dates and the consolidated results of operations, changes in stockholders’ equity and cash flows of the Company and the Company Subsidiaries for the periods stated therein.

8

(h)         Reports.  Since December 31, 2017, the Company and each Company Subsidiary have filed all material reports, registrations, documents, filings, statements and submissions, together with any required amendments thereto, that they were required to file with any Governmental Entity, including all those required under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof (the foregoing, collectively, being referred to herein as the “Company Reports”) and have paid all material fees and assessments due and payable in connection therewith.  As of their respective filing dates, or as subsequently amended prior to the date hereof, the Company Reports complied in all material respects with all statutes and applicable rules and regulations of the applicable Governmental Entities.  As of the date of this Agreement, there are no outstanding comments from the SEC or any other Governmental Entity with respect to any Company Report that were the subject of written correspondence that have not been resolved.  The Company Reports, including the documents incorporated by reference in each of them, each contained all the information required to be included in it and, when it was filed and, as of the date of each such Company Report filed with the SEC, or if amended prior to the date of this Agreement, as of the date of such amendment, did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in it, in light of the circumstances under which they were made, not misleading and complied as to form in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  No executive officer of the Company has failed in any respect to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002.

(i)        Internal Accounting and Disclosure Controls.  The records, systems, controls, data and information of the Company and the Company Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of the Company or the Company Subsidiaries (including all means of access thereto and therefrom) or reputable banking industry service providers, except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have an adverse effect on the system of internal accounting controls described below in this Section 2.2(i).  The Company (i) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) intended to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known to the chief executive officer and the chief financial officer of the Company by others within those entities, and (ii) has disclosed, based on its most recent evaluation prior to the date of this Agreement, to the Company’s outside auditors and the audit committee of the Board of Directors (A) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information, and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.  As of the date of this Agreement, the Company has no Knowledge of any reason that its outside auditors and its chief executive and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when due.  Since December 31, 2017, neither the Company nor any Company Subsidiary nor, to the Knowledge of the Company, any director, officer, employee, auditor, accountant or representative of the Company or any Company Subsidiary has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any Company Subsidiary or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any Company Subsidiary has engaged in questionable accounting or auditing practices.

9

(j)           Data Privacy.

(i)       The Company and the Company Subsidiaries have taken commercially reasonable steps consistent with customary industry practices to protect the confidentiality, integrity, availability and security of the computers, servers, workstations, routers, hubs, switches, circuits, networks and other information technology equipment owned or controlled by them or by any third party and material to the Company and the Company Subsidiaries (the “Company IT Assets”) (and all information and transactions stored or contained therein or transmitted thereby) against any unauthorized use, access, interruption, modification or corruption, and there has been no unauthorized use, access, interruption, modification or corruption of the Company IT Assets.

(ii)        In connection with their receipt, purchase, collection, securing, safeguarding, storage, transfer (including any transfer across national borders), disclosure, destruction/disposal, and/or use or other processing of any Personal Information, each of the Company and the Company Subsidiaries, is and has been, in material compliance with all Privacy Laws, their respective privacy policies and the requirements of any contract or codes of conduct to which any of the Company or the Company Subsidiaries is a party.  The privacy policies of the Company are customary for the industry in which the Company operates.  The Company and the Company Subsidiaries have commercially reasonable and appropriate physical, technical, organizational, and administrative security measures and policies in place designed to protect all Personal Information collected by them or on their behalf from and against unauthorized access, use, interruption, modification, corruption, and/or disclosure.  The Company and the Company Subsidiaries have binding written agreements obligating (in accordance with and as required by Privacy Laws (as applicable)) all third parties collecting, accessing, receiving, storing or processing Personal Information on behalf of the Company and the Company Subsidiaries to (i) comply with all applicable Privacy Laws, (ii) take commercially reasonable and appropriate steps to protect and secure such Personal Information from and against unauthorized access, use interruption, modification, corruption, and/or disclosure which are no less stringent than those applied by the Company and the Company Subsidiaries and (iii) promptly notify the Company and the Company Subsidiaries of any unauthorized access, use interruption, modification, corruption, and/or disclosure of Personal Information or Company IT Assets processing Personal Information.  The Company and the Company Subsidiaries are, and since December 31, 2017, have been, in compliance in all material respects with all Privacy Laws and any other applicable Laws in all relevant jurisdictions relating to data loss, theft and breach of security notification obligations.  Since December 31, 2017, none of the Company or any of the Company Subsidiaries has experienced a material breach of its information technology systems or a data loss or theft as defined by the Laws in all relevant jurisdictions.  None of the Company or any of the Company Subsidiaries has been charged with, or received any notice of any claims of, the violation in any material respect of any Privacy Laws or any of their respective privacy policies.  The consummation of the transactions contemplated hereby will not breach or otherwise cause any violation of any Privacy Law.

10

(iii)        For the purposes of this Section 2.2(j):

(1)           “Personal Information” means, in addition to any definition provided by applicable law or by the Company and the Company Subsidiaries in any of their respective privacy policies, contracts, or other public-facing statements for any similar term (e.g., “personally identifiable information” or “PII”), all information identifying, regarding or capable of being associated with an individual person or device.  Personal Information may relate to any individual, including a current, prospective or former client (or a client’s customer or end user) or employee of any Person, and includes information in any form, including paper, electronic and other forms.

(2)           “Privacy Laws” means all applicable laws, legal requirements, and self-regulatory guidelines and principles relating to privacy, data security, and Personal Information and similar applicable consumer protection laws, including with respect to the receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security, disposal, destruction, disclosure or transfer of Personal Information and any and all applicable laws governing breach notification in connection with Personal Information.  As used in this Agreement, “Privacy Laws” shall include the California Consumer Privacy Act, General Data Protection Regulation and the rules and regulations promulgated thereunder, and applicable state laws.

(k)         No Undisclosed Liabilities.  There are no liabilities of the Company or any of the Company Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, except for (i) liabilities adequately reflected or reserved against in accordance with GAAP in the Company’s audited balance sheet as of December 31, 2019 and (ii) liabilities that have arisen in the ordinary and usual course of business and consistent with past practice since December 31, 2019 and that have not or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(l)          Mortgage Lending.  The Company and each of the Company Subsidiaries have complied in all material respects with, and all documentation in connection with the origination, processing, underwriting and credit approval of any mortgage loan originated, purchased or serviced by the Company or any Company Subsidiary has satisfied, in all material respects (i) all Laws with respect to the origination, insuring, purchase, sale, servicing, or filing of claims in connection with mortgage loans, including all Laws relating to real estate settlement procedures, consumer credit protection, truth in lending laws, usury limitations, fair housing, transfers of servicing, collection practices, equal credit opportunity and adjustable rate mortgages, (ii) the responsibilities and obligations relating to mortgage loans set forth in any agreement between the Company and any Agency, Loan Investor or Insurer, (iii) the applicable rules, regulations, guidelines, handbooks and other requirements of any Agency, Loan Investor or Insurer and (iv) the terms and provisions of any mortgage or other collateral documents and other loan documents with respect to each mortgage loan.

11

(m)         Bank Secrecy Act; Anti-Money Laundering; OFAC; and Customer Information.  The Company is not aware of, has not been advised of, and, to the Knowledge of the Company, has no reason to believe that any facts or circumstances exist that would cause it or any Company Subsidiary to be deemed to be not operating in compliance, in all material respects, with the Bank Secrecy Act of 1970, as amended, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (also known as the USA PATRIOT Act), any order or regulation issued by the Treasury’s Office of Foreign Assets Control (“OFAC”), or any other applicable anti-money laundering or anti-terrorist-financing statute, rule or regulation.  The Company is not aware of any facts or circumstances that would cause it to believe that any nonpublic customer information has been disclosed to or accessed by an unauthorized third party in a manner that would cause it to undertake any material remedial action.  The Company and each of the Company Subsidiaries have adopted and implemented an anti-money laundering program that contains adequate and appropriate customer identification verification procedures that comply with the USA PATRIOT Act and such anti-money laundering program meets the requirements in all material respects of Section 352 of the USA PATRIOT Act and the regulations thereunder, and they have complied in all respects with any requirements to file reports and other necessary documents as required by the USA PATRIOT Act and the regulations thereunder.  The Company will not directly or indirectly use the proceeds of the sale of the Common Stock pursuant to transactions contemplated by this Agreement, or lend, contribute or otherwise make available such proceeds to any Company Subsidiary, joint venture partner or other Person, towards any sales or operations in any country appearing on the OFAC Specially Designated Nationals List (“SDN List”) or for the purpose of financing the activities of any Person currently appearing on the SDN List.

(n)          Certain Payments.  Neither the Company nor any of the Company Subsidiaries, nor any directors or officers of the Company, nor to the Knowledge of the Company, employees or any Affiliates of the Company or the Company Subsidiaries or any other Person who to the Knowledge of the Company is associated with or acting on behalf of the Company or any of the Company Subsidiaries has directly or indirectly (i) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment in material violation of any Law, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable anti-bribery or anti-corruption laws, to any Person, private or public, regardless of form, whether in money, property, or services (A) to obtain favorable treatment in securing business for the Company or any of the Company Subsidiaries, (B) to pay for favorable treatment for business secured by the Company or any of the Company Subsidiaries, or (C) to obtain special concessions or for special concessions already obtained, for or in respect of the Company or any of the Company Subsidiaries or (ii) established or maintained any fund or asset with respect to the Company or any of the Company Subsidiaries that was required by Law or GAAP to have been recorded and was not recorded in the books and records of the Company or any of the Company Subsidiaries.  Neither the Company nor any Company Subsidiaries has conducted any internal investigation, made any voluntary, directed, or involuntary disclosure to any Governmental Entity, or received any audit report, written communication from a Governmental Entity, or whistleblower or other written complaint, involving alleged violations in any material respect of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable anti-bribery or anti-corruption laws on the part of the Company, any of the Company Subsidiaries, or any Person acting on behalf of the Company or any of the Company Subsidiaries.

12

(o)         Absence of Certain Changes.  Since December 31, 2019 and except as Previously Disclosed or as required or contemplated by the terms of this Agreement, (i) the Company and the Company Subsidiaries have conducted their respective businesses in all material respects in the ordinary and usual course of business consistent with past practices, (ii) through (and including) the date of this Agreement, no fact, event, change, condition, development, circumstance or effect has occurred that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (iii) no material default (or event which, with notice or lapse of time, or both, would constitute a material default) exists on the part of the Company or any Company Subsidiary in the due performance and observance of any term, covenant or condition of any agreement to which the Company or any Company Subsidiary is a party and which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(p)          Compliance with Laws.

(i)         The Company, each Company Subsidiary and each of their officers, agents, representatives and employees possesses, holds and have all material permits, licenses, franchises, authorizations, orders, consents, registrations, accreditations and approvals of, and have made all filings, applications and registrations with, Governmental Entities that are required in order to permit the Company and each Company Subsidiary to own or lease their properties and assets and to carry on their business as presently conducted and that are material to the business of the Company and each Company Subsidiary (collectively, the “Governmental

          Authorizations”\).  The Company and the Company Subsidiaries, and to the Company’s Knowledge, their respective officers, agents, representatives and employees, are not in default under any of such Governmental Authorizations, which
      default\(s\) would be, or be reasonably expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries \(taken as a whole\).  The Company and each Company Subsidiary have complied with and \(A\) are not, and
      since December 31, 2017, have not been, in default or violation in any respect of, \(B\) are not under investigation with respect to, and \(C\) have not been threatened to be charged with or given notice of any material violation of, any applicable
      material domestic \(federal, state or local\) or foreign law, statute, ordinance, license, rule, regulation, policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental Entity \(each, a “Law”\), other than such noncompliance, defaults or violations as would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries \(taken as a whole\).  No
      Governmental Entity has placed any material restriction on the business or properties of the Company or any of the Company Subsidiaries.  As of the date hereof, the Bank has a Community Reinvestment Act rating of “outstanding.”

13

(ii)         Except for normal examinations conducted by a Governmental Entity in the ordinary course of business of the Company and the Company Subsidiaries, (A) no Governmental Entity has initiated or has pending any proceeding or, to the Knowledge of the Company, investigation into the business or operations of the Company or any of the Company Subsidiaries since December 31, 2017, (B) there is no unresolved violation or exception by any Governmental Entity with respect to any report or statement relating to any examinations or inspections of the Company or any of the Company Subsidiaries, and (C) there have been no formal or informal inquiries by, or disagreements or disputes with, any Governmental Entity with respect to the business, operations, policies or procedures of the Company or any of the Company Subsidiaries since December 31, 2017, in each case of clauses (A) through (C), which would reasonably be expected, individually or in the aggregate, to be material to the Company and the Company Subsidiaries (taken as a whole).

(iii)        The Company and the Company Subsidiaries are not, and since December 31, 2017, have not been, in violation or default of any provisions of their respective certification of incorporation or bylaws (or similar governing documents).

(q)       Adequate Capitalization.  As of September 30, 2020, the Bank met or exceeded the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.  As of the Closing and after giving effect to this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions, the Bank meets or exceeds the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.

(r)        Agreements with Regulatory Agencies.  The Company and the Company Subsidiaries (A) are not subject to any cease-and-desist or other similar order or enforcement action issued by, (B) are not a party to any written agreement, consent agreement or memorandum of understanding with, (C) are not a party to any commitment letter or similar undertaking to, and (D) are not subject to any capital directive by, and since December 31, 2019, neither the Company nor any of the Company Subsidiaries has adopted any board resolutions at the request of any Governmental Entity that currently restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its liquidity and funding policies and practices, its ability to pay dividends, its credit, risk management or compliance policies, its internal controls, its management or its operations or business, nor has the Company nor any of the Company Subsidiaries been advised since December 31, 2019 by any Governmental Entity that it is considering issuing, initiating, ordering, or requesting any of the same.

(s)         Insurance.  The Company and each of the Company Subsidiaries are presently insured, and have been insured for at least the past two years, for reasonable amounts with financially sound and reputable insurance companies against such risks as companies engaged in a similar business would, in accordance with good business practice, customarily be insured.  All of the policies, bonds and other arrangements providing for the foregoing (the “Company Insurance Policies”) are in full force and effect, the premiums due and payable thereon have been or will be timely paid through the Closing Date, and there is no material breach or default (and no condition exists or event has occurred that, with the giving of notice or lapse of time or both, would constitute such a material breach or default) by the Company or any of the Company Subsidiaries under any of the Company Insurance Policies or, to the Knowledge of the Company, by any other party to the Company Insurance Policies.  Neither the Company nor any of the Company Subsidiaries has received any written notice of cancellation or non-renewal of any Company Insurance Policy nor, to the Knowledge of the Company, is the termination of any such policies threatened in writing by the insurer, and there is no material claim for coverage by the Company, or any of the Company Subsidiaries, pending under any of such Company Insurance Policies as to which coverage has been denied or disputed by the underwriters of such Company Insurance Policies or in respect of which such underwriters have reserved their rights.

14

(t)          Title.  The Company and the Company Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and valid title to all material personal property owned by them, in each case free and clear of all Liens, except for Liens which do not materially affect the value of such property or do not interfere with the use made and proposed to be made of such property by the Company or any Company Subsidiary.  Any real property and facilities held under lease by the Company or the Company Subsidiaries are leased pursuant to valid, subsisting and enforceable leases with such exceptions that are not material and do not interfere with the use made and proposed to be made of such property and facilities by the Company or the Company Subsidiaries.

(u)          Intellectual Property.  The Company and the Company Subsidiaries own or possess adequate rights or licenses to use all trademarks, service marks and all applications and registrations therefor, trade names, patents, patent rights, copyrights, original works of authorship, inventions, trade secrets and other intellectual property rights (collectively, “Intellectual

            Property Rights”\) used in their businesses as conducted on the date of this Agreement, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  To the Knowledge of the
        Company, no product or service of the Company or the Company Subsidiaries infringes the Intellectual Property Rights of others.

(v)          Employee Benefits.

(i)         Section 2.2(v) of the Disclosure Schedule sets forth a correct and complete list of each “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including, without limitation, multiemployer plans within the meaning of Section 3(37) of ERISA), and all stock purchase, stock option, severance, employment, change-in-control, fringe benefit, bonus, incentive, deferred compensation and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transactions contemplated by this Agreement or otherwise), whether formal or informal, oral or written, under which (A) any current or former employee or director of the Company or any of the Company Subsidiaries (the “Company Employees”) has any present or future right to benefits and which are contributed to, sponsored by or maintained by the Company or any of the Company Subsidiaries or (B) the Company or any Company Subsidiary has had or has any present or future liability. All such plans, agreements, programs, policies and arrangements are collectively referred herein to as the “Benefit

          Plans.”

15

(ii)         (A) Each Benefit Plan has been established and administered in all material respects in accordance with its terms, and in compliance with the applicable provisions of ERISA, the Code and other Laws; (B) no “reportable event” (as such term is defined in Section 4043 of ERISA) that could reasonably be expected to result in material liability has occurred with respect to any Benefit Plan, and (C) no non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) has been engaged in by the Company or any Company Subsidiary with respect to any Benefit Plan that has or is expected to result in any material liability or “accumulated funding deficiency” (as such term is defined in Section 302 of ERISA and Section 412 of the Code (whether or not waived)).

(iii)       The Company and the Company Subsidiaries will be in compliance, as of the Closing Date, with Sections 111 and 302 of the Emergency Economic Stabilization Act of 2008, as amended by the U.S. American Recovery and Reinvestment Act of 2009, including all guidance issued thereunder by a Governmental Entity (collectively “EESA”).

(iv)       None of the Company or any Company Subsidiary or any trade or business, whether or not incorporated (an “ERISA Affiliate”), all of which together with the Company or any Company Subsidiary would be deemed a “single employer” within the meaning of Section 4001 of ERISA, has, at any time during the last six years, contributed to or been obligated to contribute to any plan that is (i) subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code or (ii) a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA (a “Multiemployer Plan”) or a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA; and none of Company and the Company Subsidiaries nor any of their respective ERISA Affiliates has incurred any liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as those terms are defined in Part I of Subtitle E of Title IV of ERISA.

(v)         Neither the Company nor any Company Subsidiary has any material unfunded liabilities existing under or in connection with any Benefit Plan, and each such Benefit Plan has been established and administered in all respects in accordance with its terms, and in compliance with applicable law, except where failure to be in compliance would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.

(vi)        Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby could (either alone or in conjunction with any other event) reasonably be expected to result in, cause the accelerated vesting, funding or delivery of, or increase the amount or value of, any payment or benefit to any employee, officer or director of the Company or any Company Subsidiary.

16

(w)         Taxes.  All material Tax Returns required to be filed by, or on behalf of, the Company or the Company Subsidiaries have been timely filed, or will be timely filed, in accordance with all Laws, and all such Tax Returns are, or will be at the time of filing, complete and correct in all material respects.  The Company and the Company Subsidiaries have timely paid all material Taxes due and payable (whether or not shown on such Tax Returns), or, where payment is not yet due, have made adequate financial statement provisions therefor in accordance with GAAP.  There are no Liens with respect to Taxes upon any of the assets or properties of either the Company or the Company Subsidiaries other than with respect to Taxes not yet due and payable.  As of the date of this Agreement, there are not pending or threatened in writing, any audits, examinations, investigations or other proceedings initiated by the Internal Revenue Service in respect of U.S. federal income tax matters.  None of the Company or any of the Company Subsidiaries has been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the date hereof that was purported or intended to be governed by Section 355 of the Code (or any similar provision of state, local or foreign Law).  The Company and each Company Subsidiary is, and has been since the date of its formation, a corporation for U.S. federal income tax purposes, and neither the Company nor any Company Subsidiary has elected pursuant to the Code to be treated as a Subchapter S corporation pursuant to Section 1362(a) of the Code, nor has it made any other elections pursuant to the Code (other than elections that relate solely to methods of accounting, depreciation or amortization) that would have, or be reasonably expected to result in, individually or in the aggregate, a Material Adverse Effect.

(x)          Labor.

(i)         Employees of the Company and the Company Subsidiaries are not represented by any labor union nor are any collective bargaining agreements otherwise in effect with respect to such employees.  No labor organization or group of employees of the Company or any Company Subsidiary has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions presently pending or threatened to be brought or filed with the National Labor Relations Board or any other labor relations tribunal or authority, nor have there been in the last three years.  There are no strikes, work stoppages, slowdowns, labor picketing lockouts, material arbitrations or material grievances, or other material labor disputes pending or, to the Knowledge of the Company, threatened against or involving the Company or any Company Subsidiary, nor have there been any in the past year.

(ii)         Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company and the Company Subsidiaries are in compliance with all federal and state Laws and requirements respecting employment and employment practices, terms and conditions of employment, collective bargaining, disability, immigration, health and safety, wages, hours and benefits, non-discrimination in employment, workers’ compensation and the collection and payment of withholding and/or payroll taxes and similar taxes.

(iii)      There is no charge or complaint pending or threatened before any Governmental Entity alleging unlawful discrimination in employment practices, unfair labor practices or other unlawful employment practices by the Company or any Company Subsidiary.

(iv)        To the Knowledge of the Company, since December 31, 2017, (i) no allegations of sexual harassment or misconduct have been made against (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000, and (ii) neither the Company nor any of the Company Subsidiaries has entered into any settlement agreements related to allegations of sexual harassment or misconduct by (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000.

17

(y)         Brokers and Finders.  Except as Previously Disclosed, neither the Company nor any of its officers, directors, employees or agents has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Company in connection with this Agreement or the transactions contemplated hereby, the fees of which would be payable by the Investor.

(z)          Offering of Securities.

(i)          Neither the Company nor any Person acting on its behalf has taken any action (including any offering of any securities of the Company under circumstances which would require the integration of such offering with the offering of any of the Shares to be issued pursuant to this Agreement under the Securities Act and the rules and regulations of the SEC promulgated thereunder) which would subject the offering, issuance or sale of any of the Shares to be issued pursuant to this Agreement to be subject to the registration requirements of the Securities Act.

(ii)         The Company is not disqualified from relying on Rule 506 of Regulation D (“Rule 506”) under the Securities Act for any of the reasons stated in Rule 506(d) (each such reason, a “Disqualification Event”) in connection with the issuance and sale of the Shares to the Investor.  The Company has furnished the Investor, a reasonable time prior to the date hereof, a description in writing of any matters that would have triggered disqualification under Rule 506(d) but which occurred before September 23, 2013, in each case, in compliance with the disclosure requirements of Rule 506(e).

(aa)        Affiliate Transactions.  No officer, director, five percent (5%) stockholder or other Affiliate of the Company (or any Company Subsidiary), or any individual who, to the Knowledge of the Company, is related by marriage or adoption to or shares the same home as any such Person, or any entity which, to the Knowledge of the Company, is controlled by any such Person (collectively, an “Insider”), is a party to any contract or transaction with the Company (or any Company Subsidiary) which pertains to the business of the Company (or any Company Subsidiary) or has any interest in any property, real or personal or mixed, tangible or intangible, used in or pertaining to the business of the Company or any Company Subsidiary.  The foregoing representation and warranty does not include deposit accounts of an Insider at the Company or any Company Subsidiary or loans of $250,000 or less made in the ordinary course of business to Insiders in compliance with Regulation O and other applicable Law.

(bb)       Private Placement.  Assuming the accuracy of the Investor’s representations and warranties set forth in Section 2.3 of this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investor.  Assuming the Stockholder Approval is obtained (if required), the issuance and sale of the Shares hereunder does not contravene the rules and regulations of the Nasdaq Stock Market.

18

(cc)        Listing and Maintenance Requirements.  The Company’s Voting Common Stock is (and at the Closing, the Class A Common Stock will be) registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to terminate the registration of the Voting Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received written notice from the Nasdaq Stock Market to the effect that the Company is not in compliance with the listing or maintenance requirements of the Nasdaq Stock Market.

(dd)        Investment Company.  Neither the Company nor any of the Company Subsidiaries is required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

(ee)        Acknowledgment Regarding the Investor’s Purchase of Shares.  The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby.  The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions and any advice given by the Investor or any of its representatives or agents in connection with this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions is merely incidental to Investor’s purchase of the Shares.

(ff)         No General Solicitation or General Advertising.  Neither the Company nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Shares.

(gg)        Shell Company Status.  The Company is not, and has never been, an issuer identified in Rule 144(i)(1) under the Securities Act.

(hh)       Valid Issuance of Shares.  The Shares sold and delivered in accordance with the terms hereof for the consideration expressed herein will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws.  Assuming the accuracy of the representations and warranties of the Investor set forth in Section 2.3, the Shares will be issued in compliance with all applicable federal and state securities laws.

2.3        Representations and Warranties of the Investor.   Except as Previously Disclosed, the Investor hereby represents and warrants to the Company, as of the date hereof and as of the Closing Date (except for the representations and warranties that are as of a specific date which are made as of that date) that:

19

(a)          Organization and Authority.  The Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and where failure to be so qualified would be reasonably expected to materially and adversely impair or delay its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

(b)          Authorization; No Conflicts.

(i)         The Investor has the necessary power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by its board of directors, general partner or managing members, investment committee, investment adviser or other authorized person, as the case may be, and no further approval or authorization by any of its stockholders, partners or other equity owners, as the case may be, is required.  This Agreement has been duly and validly executed and delivered by the Investor and, assuming due authorization, execution and delivery by the Company is the valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

(ii)         Neither the execution, delivery and performance by the Investor of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by the Investor with any of the provisions hereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any Liens upon any of the properties or assets of the Investor under any of the terms, conditions or provisions of (1) its articles of incorporation or bylaws, its certificate of limited partnership or partnership agreement or its similar governing documents or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Investor is a party or by which the Investor may be bound, or to which the Investor or any of the properties or assets of the Investor may be subject, or (B) violate any Law applicable to the Investor or any of its properties or assets, except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to materially adversely affect the Investor’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

(c)          Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of this Agreement or for the purchase by the Investor of the Shares pursuant to this Agreement.

20

(d)         Purchase for Investment; Accredited Investor Status; Pre-Existing Relationship.  The Investor acknowledges that the Shares to be purchased by the Investor pursuant to this Agreement have not been registered under the Securities Act or under any state securities laws and may not be resold or transferred by the Investor without such registration or appropriate reliance on any available exemption from such requirements.  The Investor (i) is acquiring the Shares pursuant to an exemption from the registration requirements of the Securities Act and other applicable securities laws solely for investment with no present intention to distribute any of the Shares to any Person, (ii) will not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, (iii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Shares and of making an informed investment decision and (iv) is an “accredited investor” (as that term is defined by Rule 501 under the Securities Act), (vi) is aware that the Company has entered into the Merger Agreement pursuant to which it is required to file with the SEC a Registration Statement on Form S-4 (the “Registration Statement”), and (vi) began discussions regarding the potential for the Investment by this Agreement with representatives of the Company before the Registration Statement was filed with the SEC and Investor’s purchase of the Shares was not solicited by the Registration Statement or any other filing made by the Company with the SEC.

(e)          Brokers and Finders.  Neither the Investor, nor its Affiliates nor any of their respective officers or directors, has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Investor in connection with this Agreement or the transactions contemplated hereby.

(f)          Access to Information.  The Investor acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and the Company Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the Investment; and (iv) the opportunity to ask questions of management of the Company.

(g)        No Reliance.  The Investor has not relied on any representation or warranty made by any Person by or on behalf of the Company, including, without limitation, the Placement Agents, in connection with the Investment other than those contained in this Agreement.

(h)         Placement Agents.  The Investor acknowledges that the Placement Agents have not performed any due diligence review on behalf of the Investor.  Furthermore, the Investor will purchase the Shares directly from the Company and not from the Placement Agents and understands that neither the Placement Agents nor any other broker or dealer has any obligation to make a market in the Common Stock.

21

(i)        Accuracy of Representations.  The Investor understands that each of the Placement Agents and the Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements in connection with the transactions contemplated by this Agreement and agrees that if any of the representations or acknowledgements made by it are no longer accurate as of the Closing Date, or if any of the agreements made by it are breached on or prior to the Closing Date, it shall promptly notify the Placement Agents and the Company.

ARTICLE 3.

COVENANTS

3.1         Conduct of Business Prior to Closing.  Except as otherwise expressly required or contemplated by this Agreement or applicable Law, or with the prior written consent of the Investor, between the date of this Agreement and the Closing, the Company shall, and the Company shall cause each Company Subsidiary to:

(a)          use commercially reasonable efforts to conduct its business only in the ordinary course of business consistent with past practice; and

(b)         use commercially reasonable efforts to (i) preserve the present business operations, organization (including officers and employees) and goodwill of the Company and any Company Subsidiary and (ii) preserve business relationships with customers, suppliers, consultants and others having business dealings with the Company; provided, however, that nothing in this clause (b) shall place any limit on the ability of the Board of Directors to act in accordance with, or require any actions that the Board of Directors may, in good faith, determine to be inconsistent with, its duties or the Company’s obligations under applicable Law or imposed by any Governmental Entity.

3.2         Use of Proceeds.

      The proceeds received by the Company from the sale of the Shares contemplated hereunder \(net of any applicable costs and expenses\) will be used in a manner consistent in all material respects with the capital
      deployment plan provided by the Company to the Investor prior to the execution of this Agreement.

3.3         Regulatory Filings.  The Company shall make all filings pursuant to any applicable state securities laws and Regulation D of the Securities Act that are required to be made in connection with the Closing.

3.4         Confidentiality.  The Investor acknowledges that the information being provided to it in connection with the transactions contemplated hereby includes confidential information that has not been publicly disclosed and agrees to maintain the confidentiality of the information with the same degree of care that it uses to protect its own confidential information.

3.5        Publicity.  The Company shall not publicly disclose the financial or other terms of the transactions contemplated hereby or the name of any Investor or any Affiliate or investment adviser of any Investor, or include the name of any Investor or any Affiliate or investment adviser of any Investor in any press release or filing with the SEC or the Nasdaq Stock Market and shall not use any names, trademarks, service marks or trade names of the Investor or its Affiliates in any form of advertising and publicity or public statements, without the prior written consent of such Investor, except (i) as required by federal securities law in connection with the filing of final transaction documents with the SEC or (ii) to the extent such disclosure is required by applicable law, at the request of the staff of the SEC or at the request of the Nasdaq Stock Market regulations, in which case the Company shall provide each such Investor with prior written notice of such disclosure and the form of such disclosure shall be subject to the approval of such Investor, such approval not to be unreasonably withheld or delayed.

22

3.6        Commercially Reasonable Efforts.  Upon the terms and subject to the conditions herein provided, except as otherwise provided in this Agreement, each of the Parties hereto agrees to use its commercially reasonable efforts to take or cause to be taken all action, to do or cause to be done and to assist and cooperate with the other Party in doing all things necessary, proper or advisable under applicable Laws to consummate and make effective the transactions contemplated hereby, including but not limited to: (a) the satisfaction of the conditions precedent to the obligations of the Parties; (b) the obtaining of applicable Governmental Consents, and consents, waivers and approvals of any other third parties; (c) defending of any claim, action, suit, investigation or proceeding, whether judicial or administrative, challenging this Agreement or the performance of the obligations hereunder; and (d) the execution and delivery of such instruments, and the taking of such other actions as the other Party may reasonably request in order to carry out the intent of this Agreement.  Notwithstanding the foregoing, under no circumstances will the Investor be required to disclose to the Company, the Company Subsidiaries or any third party any information the disclosure of which is prohibited by Law, nor shall it be required to agree to any restrictions, conditions or commitments imposed or otherwise required by any Government Entity that are determined by the Investor in its sole discretion to be unduly burdensome, other than customary passivity commitments, in order to consummate and make effective the transactions contemplated hereby.

3.7         Legend.

(a)          The Investor agrees that all certificates or other instruments representing the Shares subject to this Agreement shall bear legends substantially to the following effect, until such time as they are not required under Section 3.7(b)

“THE SHARES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.”

(b)         Upon request of the Investor, the Company shall promptly cause such legends to be removed from any certificate for any Shares to be so transferred if such Shares are being transferred pursuant to an exemption from the registration securities requirements of the Securities Act and applicable state Laws, subject to receipt by the Company of an opinion of counsel for the Investor reasonably satisfactory to the Company to the effect that such legend is no longer required under the Securities Act and applicable state Laws.  The Investor acknowledges that the sale of the Shares provided for herein has not been registered under the Securities Act or under any state securities Laws and agrees that it shall not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities Laws.

23

3.8       Exchange Listing.  The Company shall use its reasonable best efforts to cause the Shares to be approved for listing on the Nasdaq Stock Market as promptly as possible.

3.9       Authorized

          Shares.  The Company will at all times reserve, free of any preemptive or similar rights of stockholders of the Company, a number of unissued shares of Class A Common Stock, sufficient to convert automatically, in accordance with
      the terms of the certificate of incorporation of the Company, all of the shares of Class C Common Stock then outstanding.

3.10       Rule 144 Reporting.  With a view to making available to the Investor the benefits of certain rules and regulations of the SEC which may permit the sale of the Shares by the Investor without registration under the Securities Act upon compliance with the initial holding period and other applicable requirements of Rule 144 under the Securities Act, the Company agrees to use its reasonable best efforts to:

(i)         make and keep adequate current public information with respect to the Company available, as those terms are understood and defined in Rule 144(c)(1) or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of this Agreement;

(ii)         so long as the Investor owns any of the Shares, furnish to the Investor forthwith upon request: (A) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 under the Securities Act, and of the Exchange Act; (B) a copy of the most recent annual or quarterly report of the Company; and (C) such other reports and documents as the Investor may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any of the Shares without registration; and

(iii)        to take such further action as the Investor may reasonably request, all to the extent required from time to time to enable the Investor to sell Shares without registration under the Securities Act.

3.11       Exchange Rights.

      The Investor shall have the right from time to time to exchange any of the shares of Class A Common Stock acquired by the Investor hereunder for Class C Common Stock in order to reduce its ownership of voting common stock to less than 4.9% of the
      then outstanding shares of Class A Common Stock. Any shares of Class C Common Stock received by the Investor or any Affiliate of the Investor pursuant to this Section 3.11 shall not be convertible by the Investor into shares of Class A
      Common Stock or any other voting security of the Company, and any such shares shall be subject to the restrictions set forth in the provisions of the Company’s certificate of incorporation relating to the Class C Common Stock.

24

ARTICLE 4.

TERMINATION

4.1          Termination.  This Agreement may be terminated prior to the Closing:

(a)          by mutual written agreement of the Company and the Investor;

(b)        by either Party, upon written notice to the other Party in the event that the Closing does not occur on or before September 1, 2021; provided, however, that the right to terminate this Agreement pursuant to this Section 4.1(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;

(c)         by either Party, upon written notice to the other Party, in the event that (i) Stockholder Approval is required under applicable Law or the rules and regulations of the Nasdaq Stock Market, but has not been obtained on or prior to the closing date of the Merger or (ii) the Authorized Shares Increase Approval has not been obtained on or prior to the closing date of the Merger;

(d)         by the Investor, upon written notice to the Company, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Company in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(ii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in the absence of such breach or condition; provided that this Section 4.1(d) shall only apply if the Investor is not in material breach of any of the terms of this Agreement;

(e)          by the Company, upon written notice to the Investor, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Investor in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(iii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in absence of such breach or condition; provided that this Section 4.1(e) shall only apply if the Company is not in material breach of any of the terms of this Agreement; or

(f)          by any Party, upon written notice to the other Party, in the event that any Governmental Entity shall have issued any order, decree or injunction or taken any other action restraining, enjoining or prohibiting any of the transactions contemplated by this Agreement, and such order, decree, injunction or other action shall have become final and non-appealable.

4.2        Effects of Termination.  In the event of any termination of this Agreement as provided in Section 4.1, this Agreement (other than Section 3.4, this Article 4 and Article 6 of this Agreement, which shall remain in full force and effect) shall forthwith become wholly void and of no further force and effect; provided, that nothing herein shall relieve any Party from liability for fraud or willful breach of this Agreement.

25

ARTICLE 5.

INDEMNITY

5.1         Indemnification by the Company.

(a)         After the Closing, and subject to Sections 5.1(b), 5.3 and 5.4, the Company shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Investor and its Affiliates, and their respective successors and assigns, officers, directors, partners, members and employees, as applicable, (the “Investor Indemnified Parties”) against and from, and reimburse any of the Investor Indemnified Parties for, all Losses that any of the Investor Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Company in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by the Company to perform any of its covenants or agreements contained in this Agreement.  Notwithstanding anything herein to the contrary, the obligations of the Company under this Section 5.1(a) shall not be applicable to or inure to the benefit of any transferee of the Common Stock sold pursuant to this Agreement who is not an Affiliate of the Investor.

(b)         Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless any of the Investor Indemnified Parties against, or reimburse any of the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) (other than Losses arising out of the inaccuracy or breach of any Company Specified Representations) until the aggregate amount of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a) exceeds $100,000 (the “Threshold Amount”), upon the occurrence of which the Company shall be obligated for all of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a).  Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless the Investor Indemnified Parties against, or reimburse the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1.

(c)          For purposes of Section 5.1(a), in determining whether there has been a breach of a representation or warranty, the Parties hereto shall ignore any “materiality,” “Material Adverse Effect” or similar qualifications.

5.2         Indemnification by the Investor.

(a)         After the Closing, and subject to Sections 5.2(b), 5.3 and 5.4, the Investor shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Company and its respective Affiliates and their respective successors and assigns, officers, directors, partners, members, employees, representatives and agents (collectively, the “Company Indemnified Parties”) against and from, and reimburse any of the Company Indemnified Parties for, all Losses that the Company Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Investor in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by such Investor to perform any of its covenants or agreements contained in this Agreement.

26

(b)         Notwithstanding anything to the contrary contained herein, the Investor shall not be required to indemnify, defend or hold harmless any of the Company Indemnified Parties against, or reimburse any of the Company Indemnified Parties for any Losses pursuant to Section 5.2(a)(1) until the aggregate amount of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a) exceeds the Threshold Amount, upon the occurrence of which the Investor shall be obligated for all of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a)(1).  Notwithstanding anything to the contrary contained herein, the Investor shall not be required to indemnify, defend or hold harmless the Company Indemnified Parties against, or reimburse the Company Indemnified Parties for, any Losses pursuant to Section 5.2(a)(1) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1 hereof.

(c)          For purposes of Section 5.2(a), in determining whether there has been a breach of a representation or warranty, the Parties shall ignore any “materiality” or similar qualifications.

5.3         Notification of Claims.

(a)          Any Person that may be entitled to be indemnified under this Article 5 (the “Indemnified Party”) shall promptly notify the party or parties liable for such indemnification (the “Indemnifying Party”) in writing of any claim in respect of which indemnity may be sought hereunder, including any pending or threatened claim or demand by a third party that the Indemnified Party has determined has given or could reasonably give rise to a right of indemnification under this Agreement (including a pending or threatened claim or demand asserted by a third party against the Indemnified Party) (each, a “Third Party Claim”), describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or demand; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Agreement except to the extent that the Indemnifying Party is materially prejudiced by such failure.  The Parties agree that notices for claims in respect of a breach of a representation, warranty, covenant or agreement must be delivered prior to the expiration of any applicable survival period specified in Section 6.1 for such representation, warranty, covenant or agreement; provided, that if, prior to such applicable date, a Party hereto shall have notified the other Party hereto in accordance with the requirements of this Section 5.3(a) of a claim for indemnification under this Agreement (whether or not formal legal action shall have been commenced based upon such claim), such claim shall continue to be subject to indemnification in accordance with this Agreement notwithstanding the passing of such applicable date.

27

(b)         Upon receipt of a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) in respect of a Third Party Claim, the Indemnifying Party may, by notice to the Indemnified Party delivered within twenty (20) Business Days of the receipt of notice of such Third Party Claim, assume the defense and control of any Third Party Claim, with its own counsel reasonably acceptable to the Indemnified Party and at its own expense.  The Indemnified Party shall have the right to employ counsel on its own behalf for, and otherwise participate in the defense of, any such Third Party Claim, but the fees and expenses of its counsel will be at its own expense unless (A) the employment of counsel by the Indemnified Party at the Indemnifying Party’s expense has been authorized in writing by the Indemnifying Party, (B) the Indemnified Party reasonably believes there may be a conflict of interest between the Indemnified Party and the Indemnifying Party in the conduct of the defense of such Third Party Claim, (C) the Indemnified Party reasonably believes there are legal defenses available to it that are different from, additional to or inconsistent with those available to the Indemnifying Party, or (D) the Indemnifying Party has not in fact employed counsel to assume the defense of such Third Party Claim within a reasonable time after receipt of notice of the commencement of such Third Party Claim, in each of which cases the fees and expenses of such Indemnified Party’s counsel shall be at the expense of the Indemnifying Party; provided, however, that in the event that the Company is required to assume the fees and expenses of such Investor Indemnified Party’s counsel in accordance with the foregoing and such Investor Indemnified Party is similarly situated with any other “Investor Indemnified Party” under any of the other stock purchase agreements with respect to any Third Party Claim, and does not have any conflict of interest with such Person in the conduct of the defense of such Third Party Claim or have legal defenses available to it that are different from, additional to or inconsistent with those available to such Person, such Investor Indemnified Party shall be required to employ the same counsel as such Person and the Company shall be responsible for the fees and expenses of only one such counsel for such Investor Indemnified Party and such other Person or Persons (assuming any of clauses (A) through (D) above is satisfied).  The Indemnified Party may take any actions reasonably necessary to defend such Third Party Claim prior to the time that it receives a notice from the Indemnifying Party as contemplated by the immediately preceding sentence.  The Indemnified Party shall, and shall cause each of its Affiliates and representatives to, use reasonable best efforts to cooperate with the Indemnifying Party in the defense of any Third Party Claim.  The Indemnifying Party shall not, without the prior written consent of the Indemnified Party (which shall not be unreasonably withheld or delayed), consent to a settlement, compromise or discharge of, or the entry of any judgment arising from, any Third Party Claim, unless such settlement, compromise, discharge or entry of any judgment does not involve any statement, finding or admission of any fault, culpability, failure to act, violation of Law or admission of any wrongdoing by or on behalf of the Indemnified Party, and the Indemnifying Party shall (i) pay or cause to be paid all amounts arising out of such settlement or judgment concurrently with the effectiveness of such settlement or judgment (unless otherwise provided in such judgment), (ii) not encumber any of the assets of any Indemnified Party or agree to any restriction or condition that would apply to or materially adversely affect any Indemnified Party or the conduct of any Indemnified Party’s business and (iii) obtain, as a condition of any settlement, compromise, discharge, entry of judgment (if applicable), or other resolution, a complete and unconditional release of each Indemnified Party in form and substance reasonably satisfactory to such Indemnified Party from any and all liabilities in respect of such Third Party Claim.  An Indemnified Party shall not settle, compromise or consent to the entry of any judgment with respect to any claim or demand for which it is seeking indemnification from the Indemnifying Party or admit to any liability with respect to such claim or demand without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed); provided, that such consent shall not be required if the Indemnifying Party has not fulfilled any material obligations under this Section 5.3(b).

28

(c)          In the event any Indemnifying Party receives a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) that does not involve a Third Party Claim, the Indemnifying Party shall notify the Indemnified Party within twenty (20) Business Days following its receipt of such notice whether the Indemnifying Party disputes its liability to the Indemnified Party under this Agreement.  The Indemnified Party shall reasonably cooperate with and assist the Indemnifying Party in determining the validity of any such claim for indemnity by the Indemnified Party.

5.4          Indemnification Payment .  In the event a claim or any Action for indemnification hereunder has been finally determined, the amount of such final determination shall be paid by the Indemnifying Party to the Indemnified Party on demand in immediately available funds.  A claim or an Action, and the liability for and amount of damages therefor, shall be deemed to be “finally determined” for purposes of this Agreement when the Parties have so determined by mutual agreement or, if disputed, when a final non-appealable judicial order has been entered into with respect to such claim or Action.

5.5          Exclusive Remedies.  Subject to Section 6.14, each Party acknowledges and agrees that following the Closing, the indemnification provisions hereunder shall be the sole and exclusive remedies of the Parties for any breach of the representations, warranties or covenants contained in this Agreement.  No investigation of the Company by the Investor, or of the Investor by the Company, whether prior to or after the date of this Agreement, shall limit any Indemnified Party’s exercise of any right hereunder or be deemed to be a waiver of any such right.  The Parties agree that any indemnification payment made pursuant to this Agreement shall be treated as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

ARTICLE 6.

MISCELLANEOUS

6.1         Survival.  The representations and warranties of the Parties contained in this Agreement shall survive in full force and effect until the date that is fifteen (15) months after the Closing Date (or until final resolution of any claim or action arising from the breach of any such representation and warranty, if notice of such breach was provided prior to the end of such period), at which time they shall terminate and no claims shall be made for indemnification under Section 5.1 or Section 5.2, as applicable, for breaches of representations or warranties thereafter, except the Company Specified Representations (other than the representations and warranties made in Section 2.2(v), which shall survive until the expiration of the applicable statute of limitations) and the Investor Specified Representations shall survive the Closing indefinitely.  The covenants and agreements set forth in this Agreement shall survive until the expiration of any applicable statute of limitations or until performed or no longer operative in accordance with their respective terms.  Notwithstanding the foregoing, the Company Specified Representations shall survive for the period of the applicable statute of limitations.

29

6.2        Other Definitions.  Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa, and references to any agreement, document or instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time.  In addition, the following terms shall have the meanings assigned to them below:

(a)         the term “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person provided that no security holder of the Company shall be deemed to be an Affiliate of any other security holder or of the Company or any of the Company Subsidiaries solely by reason of any investment in the Company and, for purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled

          by” and “under 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 or policies
      of such Person, whether through the ownership of voting securities, by contract or otherwise;

(b)        the term “Agency” means the Federal Housing Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home Administration (now known as Rural Housing and Community Development Services), the Federal National Mortgage Association, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture or any other federal or state agency with authority to (i) determine any investment, origination, lending or servicing requirements with regard to mortgage loans originated, purchased or serviced by the Company or (ii) originate, purchase, or service mortgage loans, or otherwise promote mortgage lending, including state and local housing finance authorities;

(c)          the term “Board of Directors” means the Board of Directors of the Company;

(d)        the term “Business Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York or in the State of California generally are authorized or required by Law or other governmental actions to close;

(e)          the term “Capital Stock” means the capital stock or other applicable type of equity interest in a Person;

(f)          the term “Code” means the Internal Revenue Code of 1986, as amended;

(g)          the term “Company Specified Representations” means the representations and warranties made in Section 2.2(a), Section 2.2(b), Section 2.2(c), Section 2.2(d), Section 2.2(x), Section 2.2(z) and Section 2.2(hh);

(h)         the term “Disclosure Schedule” shall mean a schedule delivered, on or prior to the date of this Agreement, by (i) the Investor to the Company and (ii) the Company to the Investor setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in Section 2.2 with respect to the Company, or in Section 2.3 with respect to the Investor, or to one or more covenants contained in Article 3;

30

(i)          the term “GAAP” means United States generally accepted accounting principles and practices as in effect from time to time;

(j)       the term “Governmental Consent” means any notice to, registration, qualification, designation, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Entity, or the expiration or termination of any statutory waiting periods;

(k)       the term “Governmental Entity” means any court, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign, and any applicable industry self-regulatory organization or securities exchange;

(l)          the term “Insurer” means a Person who insures or guarantees for the benefit of the mortgagee all or any portion of the risk of loss upon borrower default on any of the mortgage loans originated, purchased or serviced by the Bank, including the Federal Housing Administration, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any private mortgage insurer, and providers of hazard, title or other insurance with respect to such mortgage loans or the related collateral;

(m)      the term “Investor Specified Representations” means the representations and warranties made in Section 2.3(b)(i), Section 2.3(d) and Section 2.3(f);

(n)         the term “Knowledge” of the Company and words of similar import mean the knowledge of any directors or executive officers of the Company listed on the Disclosure Schedule hereto;

(o)         the term “Loan Investor” means any Person (including an Agency) having a beneficial interest in any mortgage loan originated, purchased or serviced by the Bank or a security backed by or representing an interest in any such mortgage loan;

(p)        the term “Losses” means any and all losses, damages, reasonable costs, reasonable expenses (including reasonable attorneys’ fees and disbursements), liabilities, settlement payments, awards, judgments, fines, obligations, claims, and deficiencies of any kind, excluding special, consequential, exemplary and punitive damages;

(q)        the term “Person” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, Governmental Entity or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity;

(r)          the term “Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company or other entity (x) of which such Person or a Subsidiary of such Person is a general partner or (y) of which a majority of the voting securities or other voting interests, or 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;

31

(s)          the term “Tax” or “Taxes” means all United States federal, state, local or foreign income, profits, estimated, gross receipts, windfall profits, severance, property, intangible property, occupation, production, sales, use, license, excise, emergency excise, franchise, capital gains, capital stock, employment, withholding, transfer, stamp, payroll, goods and services, value added, alternative or add-on minimum tax, or any other tax, custom, duty or governmental fee, or other like assessment or charge of any kind whatsoever, together with any interest, penalties, fines, related liabilities or additions to tax that may become payable in respect thereof imposed by any Governmental Entity, whether or not disputed;

(t)         the term “Tax Return” means any return, declaration, report or similar statement required to be filed with respect to any Taxes (including any attached schedules), including, without limitation, any information return, claim or refund, amended return and declaration of estimated Tax;

(u)         the term “Voting Securities” means at any time shares of any class of Capital Stock of the Company, including but not limited to Voting Common Stock (or, after giving effect to the Merger Transactions, Class A Common Stock), and Voting Debt that are then entitled to vote generally in the election of directors;

(v)          the word “or” is not exclusive;

(w)         the words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”;

(x)          the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision; and

(y)         all article, section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit and schedule references not attributed to a particular document shall be references to such exhibits and schedules to this Agreement.

6.3        Amendment and Waivers.  The conditions to each Party’s obligation to consummate the Closing are for the sole benefit of such Party and may be waived by such Party in whole or in part to the extent permitted by Law.  No amendment or waiver of any provision of this Agreement will be effective against any Party unless it is in a writing signed by a duly authorized officer of such Party.

6.4        Counterparts and Facsimile.  For the convenience of the Parties, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement.  Executed signature pages to this Agreement may be delivered by facsimile and such facsimiles shall be deemed as sufficient as if manually signed signature pages had been delivered.

32

6.5         Governing Law.  This Agreement will be governed by and construed in accordance with the Laws of the State of California applicable to contracts made and to be performed entirely within such State.

6.6        WAIVER OF JURY TRIAL.  TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, INVESTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY WHETHER BASED ON CONTRACT, EQUITY, TORT OR ANY OTHER THEORY.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN BY INVESTOR, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

6.7        Notices.  Any notice, request, instruction or other document to be given hereunder by any Party to the other will be in writing and will be deemed to have been duly given (a) on the date of delivery if delivered personally or by telecopy or facsimile, upon confirmation of receipt, (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid, provided that any such notice, request, instruction or other document to be given hereunder shall not be deemed to have been duly given unless and until it is sent via electronic mail to the recipient thereof.  All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice.

(a)          If to the Investor, to the address set forth on the Investor’s signature page to this Agreement.

(b)          If to the Company:

Broadway Financial Corporation

5055 Wilshire Boulevard, Suite 500

Los Angeles, California 90036

Attn: Brenda Battey,

Chief Financial Officer

Email: bbattey@broadwayfederalbank.com

with a copy (which copy shall not constitute notice) to:

Arnold & Porter LLP

777 South Figueroa Street,

44th Floor

Los Angeles, California 90017

Attn: James R. Walther, Esq.

Fax: (213) 243-4199

Email: James.Walther@arnoldporter.com

6.8         Entire Agreement.  This Agreement constitutes the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, inducements or conditions, both written and oral, among the Parties, with respect to the subject matter hereof and thereof.

33

6.9       Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns, including any purchasers of the Common Stock to be issued pursuant to this Agreement.  The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor.  The Investor may assign some or all of its rights hereunder or thereunder without the consent of the Company to any Affiliate of the Investor, and such assignee shall be deemed to be an Investor hereunder with respect to such assigned rights and shall be bound by the terms and conditions of this Agreement that apply to the Investor.

6.10       Captions.  The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.

6.11       Severability.  If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon 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.

6.12       Third Party Beneficiaries.  Nothing contained in this Agreement, expressed or implied, is intended to confer upon any Person other than the Parties, any benefit right or remedies, except that the Placement Agents may rely on the representations and warranties contained herein to the same extent as if they were party to this Agreement and the provisions of Sections 5.1 and 5.2 shall inure to the benefit of the Persons referred to in such Sections.

6.13     Public

          Announcements.  The Investor will not make \(and will use its reasonable best efforts to ensure that its Affiliates and representatives do not make\) any news release or public disclosure with respect to this Agreement and any of the
      transactions contemplated hereby, without first consulting with the Company and, in each case, also receiving the Company’s consent \(which shall not be unreasonably withheld, conditioned or delayed\).

6.14       Specific Performance.  The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms.  It is accordingly agreed that the Parties shall be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity.

34

6.15       No Recourse to Other Persons.  This Agreement may only be enforced against the named Parties.  All claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may be made only against the entities that are expressly identified as Parties or that are subject to the terms hereof, and no past, present or future director, officer, employee, incorporator, member, manager, partner, stockholder, Affiliate, agent, attorney or representative of any Party (including any person negotiating or executing this Agreement on behalf of a Party) shall have any liability or obligation with respect to this Agreement or with respect to any claim or cause of action, whether in tort, contract or otherwise, that may arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement and the transactions contemplated hereby.

[signature page follows]

35

IN WITNESS WHEREOF, the Parties 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:
---
Name: Wayne-Kent A. Bradshaw
--- ---
Title: President and Chief Executive Officer

[Stock Purchase Agreement]

BANNER BANK
By:
Name:
Title:
Address for notices:
---

[Stock Purchase Agreement]

Exhibit 10.26

EXECUTION VERSION

BROADWAY FINANCIAL CORPORATION

STOCK PURCHASE AGREEMENT

February 19, 2021

TABLE OF CONTENTS

Page
ARTICLE 1. PURCHASE; CLOSING 2
1.1 Issuance, Sale and Purchase 2
1.2 Closing; Deliverables for the Closing; Conditions to the Closing 2
ARTICLE 2. REPRESENTATIONS AND WARRANTIES 5
2.1 Certain Terms 5
2.2 Representations and Warranties of the Company 6
2.3 Representations and Warranties of the Investor 20
ARTICLE 3. COVENANTS 23
3.1 Conduct of Business Prior to Closing 23
3.2 Use of Proceeds 23
3.3 Regulatory Filings 23
3.4 Confidentiality 23
3.5 Publicity 24
3.6 Commercially Reasonable Efforts 24
3.7 Legend. 24
3.8 Exchange Listing 25
3.9 Authorized Shares 25
3.10 Rule 144 Reporting 25
3.11 Access to Information 26
3.12 Exchange Rights 26
ARTICLE 4. TERMINATION 28
4.1 Termination 28
4.2 Effects of Termination 28
ARTICLE 5. INDEMNITY 29
5.1 Indemnification by the Company 29
5.2 Indemnification by the Investor 29
5.3 Notification of Claims 30
5.4 Indemnification Payment 32
5.5 Exclusive Remedies 32
ARTICLE 6. MISCELLANEOUS 32
6.1 Survival 32

i

6.2 Other Definitions 33
6.3 Amendment and Waivers 35
6.4 Counterparts and Facsimile 36
6.5 Governing Law 36
6.6 WAIVER OF JURY TRIAL 36
6.7 Notices 36
6.8 Entire Agreement 37
6.9 Successors and Assigns 37
6.10 Captions 37
6.11 Severability 37
6.12 Third Party Beneficiaries 37
6.13 Public Announcements 37
6.14 Specific Performance 37
6.15 No Recourse to Other Persons 38

INDEX OF DEFINED TERMS

Page
Action 9
Affiliate 33
Agency 33
Agreement 1
Authorized Shares Increase Approval 3
Bank 6
Bank Merger 1
Benefit Plans 16
Board of Directors 33
Business Day 33
Capital Stock 33
CDFI 6
CFB 1
CFB Sub 1
Class A Common Stock 1
Class B Common Stock 1
Class C Common Stock 1
Closing 2
Closing Date 2
Code 33
Common Stock 1
Company 1

ii

Company Employees 16
Company Financial Statements 9
Company Indemnified Parties 30
Company Insurance Policies 15
Company IT Assets 10
Company Reports 9
Company Specified Representations 33
Company Stock Plan 7
Company Subsidiaries 6
Company Subsidiary 6
Concurrent Other Transactions 1
control 33
controlled by 33
controlling 33
Disclosure Schedule 34
Disqualification Event 19
EESA 17
ERISA 16
ERISA Affiliate 17
Exchange Act 9
FDIC 13
Federal Reserve 6
GAAP 34
Governmental Authorizations 14
Governmental Consent 34
Governmental Entity 34
Indemnified Party 30
Indemnifying Party 30
Insider 19
Insurer 34
Intellectual Property Rights 16
Investment 1
Investor 1
Investor Indemnified Parties 29
Investor Specified Representations 34
Knowledge 34
Law 14
Liens 8
Loan Investor 34
Losses 34
Material Adverse Effect 5
MDI Status 6
Merger 1
Merger Agreement 1
Merger Transactions 1

iii

Multiemployer Plan 17
Non-Voting Common Stock 7
OFAC 12
Parties 1
Per Share Purchase Price 2
Person 34
Personal Information 11
Placement Agents 1
Preferred Stock 7
Previously Disclosed 5
Privacy Laws 12
Purchase Price 2
Registration Statement 22
Rule 506 19
SEC 5
Securities Act 7
Shares 2
SLHCA Act 6
Stockholder Approval 3
Subsidiary 35
Surviving Bank 1
Tax 35
Tax Return 35
Taxes 35
Third Party Claim 30
Threshold Amount 29
under common control with 33
Voting Common Stock 7
Voting Debt 7
Voting Securities 35

iv

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Agreement”) is dated as of February 19, 2021, and is entered into by and among Broadway Financial Corporation, a Delaware corporation (the “Company”),

        and Citicorp Banking Corporation, a Delaware corporation \(the “Investor”, and together with the Company, the “Parties”\).

RECITALS

WHEREAS, the Company is a party to that certain Agreement and Plan of Merger (the “Merger Agreement”) with CFBanc Corporation, a District of Columbia benefit corporation (“CFB”) which provides, among other things and subject to the terms and conditions of the Merger Agreement, for (i) the merger of CFB with and into the Company, with the Company continuing as the surviving entity in the Merger (the “Merger”), (ii) immediately

        following the Merger, Broadway Federal Bank, f.s.b., a wholly owned subsidiary of the Company, will merge with and into City First Bank of D.C., National Association \(“CFB Sub”\), a wholly owned subsidiary of CFB \(the “Bank Merger” and together with the Merger and the

      other transactions contemplated by the Merger Agreement, the “Merger Transactions”\), with CFB Sub continuing as the surviving entity \(the “Surviving Bank”\), and \(iii\) the Company’s voting common stock, par value $0.01 per share, will be renamed Class A Common Stock \(“Class A Common Stock”\), a new class of non-voting common stock of the Company, par value $0.01 per share, will be created which will be named Class B Common Stock \(“Class

          B Common Stock”\) and the Company’s currently authorized non-voting common stock, par value $0.01 per share, will be renamed Class C Common Stock \(the “Class C Common Stock” and
      collectively, the “Common Stock” \);

WHEREAS, the Company has engaged Raymond James & Associates, Inc. and Keefe, Bruyette & Woods, Inc. as co-placement agents (the “Placement Agents”) for the offering of the Common Stock.

WHEREAS, the Company desires to issue and sell to the Investor, and the Investor desires to purchase from the Company, on the terms and conditions described herein, shares of Class A Common Stock at the Per Share Purchase Price specified herein (the “Investment”);

WHEREAS, the Investment is proposed to be made subject to completion of the Merger Transactions;

WHEREAS, the Investment is proposed to be made concurrently with the sale by the Company of shares of Class A Common Stock and Class C Common Stock at the Per Share Purchase Price via private placement to certain other investors (the “Concurrent Other Transactions”); and

NOW, THEREFORE, in consideration of the premises, and of the respective representations, warranties, covenants and other agreements of the Parties set forth herein, the Parties hereby agree as follows:

ARTICLE 1.

PURCHASE; CLOSING

1.1     Issuance, Sale and Purchase.  On the terms and subject to the conditions set forth herein, the Company agrees to issue and sell to the Investor, and the Investor agrees to purchase from the Company, free and clear of any Liens, 1,404,494 shares of Class A Common Stock (the “Shares”) at a per share purchase price of $1.78 (the “Per Share Purchase Price”), payable to the Company in immediately available funds at the Closing; provided, however, that the number of Shares that the Investor is required to purchase pursuant to this Section 1.1 shall be reduced, if and to the extent necessary to cause the percentage of the Company’s Class A Common Stock held by the Investor as of immediately following the Closing and the closing of the Concurrent Other Transactions not to exceed 4.99% of the total number of shares of Class A Common Stock outstanding immediately following the Closing and the closing of the Concurrent Other Transactions.  The aggregate purchase price payable pursuant to this Section 1.1 is referred to herein as the “Purchase Price”).

1.2      Closing;

          Deliverables for the Closing; Conditions to the Closing.

(a)     Closing.  Unless this Agreement has been terminated pursuant to Article 4, and subject to the satisfaction or, to the extent permitted by Law and this Agreement, the written waiver of the conditions set forth in Section 1.2(c), the closing of the transaction contemplated by this Agreement (the “Closing”) shall take place at the offices of Arnold & Porter LLP, located at 777 South Figueroa Street, 44th Floor, Los Angeles, California 90017, or remotely via the electronic or other exchange of documents and signature pages, at 9:00 a.m. Pacific Time on the second Business Day after the satisfaction or, if permissible, waiver of the conditions set forth in Section 1.2(c) (other than those which by their nature are to be satisfied at Closing, but subject to the satisfaction or waiver of such conditions), or at such other place or such other date as may be agreed to by the Parties (the “Closing Date”).

(b)       Closing Deliverables.  Subject to the satisfaction or permitted waiver of the conditions to the Closing set forth in Section 1.2(c), at the Closing the Parties shall make the following deliveries:

(i)          the Company shall deliver to the Investor one or more certificates evidencing the Shares registered in the name of the Investor (or if the Shares are to be uncertificated, the Company shall deliver appropriate evidence of such registration of the Shares in the name of the Investor);

(ii)       the Company shall deliver to the Investor a schedule setting forth the aggregate number of shares of each class of Capital Stock outstanding immediately after giving effect to the Merger Transactions, the Concurrent Other Transactions and the transactions contemplated hereby; and

(iii)        the Investor shall deliver the Purchase Price by wire transfer of immediately available funds to the account specified by the Company for this purpose by notice to the Investor prior to the Closing.

2

(c)      Closing Conditions.

(i)          The obligations of the Investor, on the one hand, and the Company, on the other hand, to consummate the purchase and sale of the Shares provided for in this Agreement are each subject to the satisfaction or, to the extent permitted by Law and this Agreement, the waiver by the Company or the Investor, as applicable, of the following conditions to the Closing under this Agreement:

(A)          All Governmental Consents required to have been obtained at or prior to the Closing Date in connection with the execution, delivery or performance of this Agreement and the consummation of the transactions contemplated hereby shall have been obtained and shall be in full force and effect;

(B)          No Law shall have been enacted or promulgated, and no action shall have been taken, by any Governmental Entity of competent jurisdiction, in each case that remains in effect, that temporarily, preliminarily or permanently restrains, precludes, enjoins or otherwise prohibits the Investment or makes the Investment illegal;

(C)        There shall not be pending any suit, action or proceeding by any Governmental Entity of competent jurisdiction seeking to restrain, preclude, enjoin or prohibit the Investment;

(D)          The Merger Transactions shall have been consummated in accordance with the Merger Agreement, including the approval of the Merger Agreement by the stockholders of each of the Company and CFB;

(E)          If required under applicable Law or the rules and regulations of the Nasdaq Stock Market, the approval by stockholders of the Company of resolutions providing for the Company’s issuance of the maximum number of shares of Common Stock to be issued under this Agreement and in the Concurrent Other Transactions in accordance with this Agreement, the definitive documentation relating to the Concurrent Other Transactions, and applicable Law and the rules and regulations of the Nasdaq Stock Market (such approval being referred to herein as the “Stockholder Approval”) shall have been obtained;

(F)        Approval by the stockholders of the Company to increase in the authorized number of shares of Voting Common Stock (which will become Class A Common Stock upon completion of the Merger) from 50,000,000 shares to 75,000,000 shares, to be effected by the filing of an amended and restated certificate of incorporation of the Company (the “Authorized Shares Increase Approval”), shall have been obtained;

(G)          No notice of delisting from the Nasdaq Stock Market shall have been received by the Company with respect to the Class A Common Stock and no proceedings for any of such purpose shall have been initiated or threatened in writing by the Nasdaq Stock Market.

3

(ii)        The obligation of the Investor to consummate the purchase of Shares provided for in this Agreement is also subject to the satisfaction or waiver by the Investor of the following conditions to the Closing:

(A)          (i) The Company Specified Representations shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date and (ii) the other representations and warranties of the Company set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except, in the case of this clause (ii) only, to the extent that the failure to be true and correct (without regard to any materiality or Material Adverse Effect qualifications contained therein), would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and except, in the case of clauses (i) and (ii), that representations and warranties made as of a specified date shall be true and correct as of such date;

(B)           The Company shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date;

(C)          The Investor shall have received a certificate, dated as of the Closing Date, signed on behalf of the Company by a senior executive officer certifying to the effect that the conditions set forth in Section 1.2(c)(ii)(A), Section 1.2(c)(ii)(B) and Section 1.2(c)(ii)(D) have been satisfied on and as of the Closing Date;

(D)          Since the date of this Agreement, no Material Adverse Effect shall have occurred and no change or other event shall have occurred that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(iii)        The obligation of the Company to consummate the sale of the Shares provided for in this Agreement is also subject to the satisfaction or written waiver by the Company of the following conditions to the Closing:

(A)          The representations and warranties of the Investor set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except to the extent that the failure to be true and correct (without regard to any materiality qualifications contained therein) would not materially adversely affect the ability of the Investor to perform its obligations hereunder and except that (1) representations and warranties made as of a specified date shall be true and correct as of such date and (2) the representations and warranties of the Investor set forth in Sections 2.3(d) and 2.3(f) shall be true and correct in all respects;

(B)           The Investor shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date; and

(C)          The Company shall have received a certificate, dated as of the Closing Date, signed on behalf of the Investor by a duly authorized person certifying to the effect that the conditions set forth in Section 1.2(c)(iii)(A) and Section 1.2(c)(iii)(B) have been satisfied on and as of the Closing Date.

4

ARTICLE 2.

REPRESENTATIONS AND WARRANTIES

2.1      Certain

          Terms.

(a)      As used in this Agreement, the term “Material Adverse Effect” means any circumstance, event, change, development or effect that, individually or in the aggregate, would reasonably be expected to (i) result in a material adverse effect on the assets, liabilities, business, condition (financial or otherwise) or results of operations of the Company and the Company Subsidiaries, taken as a whole, or (ii) materially impair or delay the ability of the Company or any of the Company Subsidiaries to perform its or their obligations under this Agreement to consummate the Closing or any of the transactions contemplated hereby; provided, however, that in determining whether a Material Adverse Effect has occurred under clause (i), there shall be excluded any circumstance, event, change, development or effect to the extent resulting from (A) actions or omissions of the Company or any Company Subsidiary expressly required or expressly contemplated by the terms of this Agreement, (B) changes after the date hereof in general economic conditions in the United States, including financial market volatility or downturns, or in the markets in which the Company and the Company Subsidiaries operate, (C) changes after the date hereof affecting the banking industry generally, (D) any changes after the date hereof in applicable Laws or accounting rules or principles, including changes in GAAP, (E) changes in the market price or trading volume of the Common Stock or the Company’s other outstanding securities (but not the underlying causes of such changes), (F) any epidemic, pandemic or disease outbreak (including the Covid-19 virus) including any worsening of such conditions; or (G) any failure by the Company or any of the Company Subsidiaries to meet any internal projections or forecasts with regard to the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole (but not the underlying causes of such failure), in each case to the extent that such circumstance, event, change, development or effect referred to in clauses (B), (C) and (D) do not have a disproportionate effect on the Company and the Company Subsidiaries compared to other participants in the industries or markets in which the Company and the Company Subsidiaries operate.

(b)     As used in this Agreement, the term “Previously Disclosed” (i) with regard to any Party, means information set forth in its Disclosure Schedule under Section references corresponding with the provision of this Agreement to which such information relates (including, in the case of the Company, information identified in the Company’s Disclosure Schedule); provided, however, that if such information is disclosed in such a way as to make its relevance or applicability to another provision of this Agreement reasonably apparent on the face of such disclosure, such information shall be deemed to be responsive to such other provision of this Agreement and (ii) with regard to the Company, includes information publicly disclosed by the Company in any reports, schedules, forms, statements and other documents filed or furnished by the Company under the Securities Act and the Exchange Act with the Securities and Exchange Commission (the “SEC”), including pursuant to Section 13(a) or 15(d) thereof, since December 31, 2017, in each case available prior to the date of this Agreement (excluding any risk factor disclosures contained in such documents under the heading “Risk Factors” and any disclosure of risks included in any “forward-looking statements” disclaimer or other statements that are similarly non-specific and are predictive or forward-looking in nature). Notwithstanding anything in this Agreement to the contrary, the mere inclusion of an item in a Disclosure Schedule shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5

2.2      Representations and Warranties of the Company.  Except as Previously Disclosed, the Company hereby represents and warrants to the Investor, as of the date of this Agreement and as of the Closing Date (except for the representations and warranties that are as of a specific date, which are made as of that date) that:

(a)      Organization and Authority.  Each of the Company and the Company Subsidiaries is a corporation or other entity duly organized and validly existing under the laws of the jurisdiction of its incorporation or organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, except where any failure to be so qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and has the corporate or other organizational power and authority to own its properties and assets and to carry on its business as it is now being conducted.  The Company has Previously Disclosed correct and complete copies of the certificate of incorporation and bylaws (or similar governing documents) as amended through the date of this Agreement for the Company and Broadway Federal Bank, f.s.b. (the “Bank”).  The Company is duly registered with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) as a savings and loan holding company under the Savings and Loan Holding Company Act, as amended, 12 U.S.C. 1467a (the “SLHCA Act”).  As of the date hereof, the Company is a certified “community development financial institution” designated as such under the Community Development Banking and Financial Institutions Act of 1994, as amended (12 U.S.C. Sections 5311 et seq.) and its implementing regulations, as applicable (a “CDFI”).  Following the consummation of the Bank Merger, the Surviving Bank will apply to be designated as (i) a CDFI and (ii) a “minority depository institution” as defined in Section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as interpreted by the FDIC (including as set forth in the FDIC’s Statement of Policy Regarding Minority Depository Institutions dated April 9, 2002) (such minority depository institution status, the “MDI Status”).

(b)     Company Subsidiaries.  As of the date of this Agreement, the Company has Previously Disclosed a true, complete and correct list of each entity in which the Company, directly or indirectly, owns sufficient capital stock or holds a sufficient equity or similar interest such that it is consolidated with the Company in the financial statements of the Company or has the power to elect a majority of the board of directors or other persons performing similar functions (each, a “Company Subsidiary” and, collectively, the “Company Subsidiaries”).

      Except for the Company Subsidiaries and as Previously Disclosed, the Company does not own beneficially or control, directly or indirectly, more than 5% of any class of equity securities or similar interests of any corporation, bank, business
      trust, association or similar organization, and is not, directly or indirectly, a partner in any general partnership or party to any joint venture or similar arrangement.  The Company owns, directly or indirectly, all of its interests in each
      Company Subsidiary free and clear of any and all Liens.  No equity security of any Company Subsidiary is or may be required to be issued by reason of any option, warrant, scrip, preemptive right, right to subscribe to, gross-up right, call or
      commitment of any character whatsoever relating to, or security or right convertible into, shares of any capital stock or other interest of such Company Subsidiary, and there are no contracts, commitments, understandings or arrangements by which
      any Company Subsidiary is bound to issue additional shares of its capital stock or other interest, or any option, warrant or right to purchase or acquire any additional shares of its capital stock.

6

(c)      Capitalization.

(i)         Except as set forth on the Disclosure Schedule, as of the date hereof, the authorized Capital Stock of the Company consists of 50,000,000 shares of Voting Common Stock, par value $0.01 per share (“Voting Common Stock”), 25,000,000 shares of Non-Voting Common Stock, par value $0.01 (“Non-Voting Common Stock”), and 1,000,000 shares of preferred stock, par value $0.01 (“Preferred Stock”).

(ii)        As of the date hereof, before giving effect to the transaction provided for herein, the Merger Transactions and the Concurrent Other Transactions the Company has issued and outstanding: (i) 19,281,758 of shares of Voting Common Stock, including 556,169 shares of Voting Common Stock granted in respect of outstanding restricted stock awards, (ii) 1,637,902 shares of Voting Common Stock held by the trust for the Broadway Federal Bank, f.s.b. Employee Stock Ownership Plan, and (iii) 8,756,396 shares of Non-Voting Common Stock.

(iii)        As of the date hereof, other than in respect of awards outstanding under or issuable pursuant to the Company’s 2008 Long-Term Incentive Plan (the “Company

          Stock Plan”\) consisting of options to purchase an aggregate of 450,000 shares of common stock, and except in connection with this Agreement and the transactions contemplated hereby, the Merger Agreement and the Concurrent Other
      Transactions, the Company has not \(A\) agreed to issue or authorized the issuance after the date hereof of any shares of Common Stock or Preferred Stock, or any securities convertible into or exchangeable or exercisable for shares of Common Stock
      or Preferred Stock, \(B\) reserved for issuance any shares of Capital Stock of the Company or \(C\) repurchased or redeemed, or agreed to or authorized the repurchase or redemption of, any shares of Capital Stock of the Company.

(iv)       All of the issued and outstanding shares of Capital Stock of the Company have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, except for the preemptive rights granted to certain institutional stockholders of the Company identified on Schedule 2.2(c)(iv) of the Company’s Disclosure Schedule.  None of the outstanding shares of Capital Stock or other securities of the Company or any of the Company Subsidiaries was issued, sold or offered by the Company or any Company Subsidiary in violation of the Securities Act of 1933, as amended (the “Securities Act”) or the securities or blue sky laws of any state or jurisdiction, or in violation of any agreement, arrangement or commitment to which the Company was or is a party or subject, or in violation of any preemptive or similar rights of any Person.  No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which the stockholders of the Company may vote (“Voting Debt”) are issued and outstanding.

7

(v)         As of the date of this Agreement, except for the outstanding awards under the Company Stock Plan, the Company does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of, or securities or rights convertible into or exchangeable or exercisable for, any shares of Capital Stock or Voting Debt of the Company.

(d)      Authorization; No Conflicts.

(i)          The Company has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The Board of Directors has approved the transactions contemplated by this Agreement.  This Agreement has been duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery by the Investor, is the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles (whether applied in equity or at law).

(ii)        Neither the execution and delivery by the Company of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by the Company with any of the provisions hereof, will, with or without the passage of time and giving of notice, (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any liens, charges, adverse rights or claims, pledges, covenants, title defects, security interests or other encumbrances of any kind (“Liens”) upon any of the properties or assets of the Company or any Company Subsidiary, under any of the terms, conditions or provisions of (1) the certificate of incorporation or bylaws (or similar governing documents) of the Company and each Company Subsidiary or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any of the Company Subsidiaries is a party or by which it may be bound, or to which the Company or any of the Company Subsidiaries, or any of the properties or assets of the Company or any of the Company Subsidiaries may be subject, or (B) violate any Law applicable to the Company or any of the Company Subsidiaries or any of their respective properties or assets except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(e)       Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of this Agreement or for the sale by the Company of Common Stock to the Investor pursuant to this Agreement.

8

(f)      Litigation and Other Proceedings.  Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, or as would not reasonably be expected to adversely impact the reputation of the Company, the Company Subsidiaries or their respective investors in any material respect, there is no pending or, to the Knowledge of the Company, threatened claim, action, suit, arbitration, complaint, charge or investigation or proceeding (each an “Action”) against the Company or any Company Subsidiary or any of their respective assets, rights or properties, nor is the Company or any Company Subsidiary a party or named as subject to the provisions of any order, writ, injunction, settlement, judgment or decree of any court, arbitrator or government agency, or instrumentality.  There has not been, and to the Knowledge of the Company, there is not pending or contemplated, any investigation or other Action by the SEC involving the Company or any current or former director or officer of the Company in his or her capacity as such.

(g)      Financial Statements.  The audited consolidated balance sheets of the Company and the Company Subsidiaries and the related consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2019 and the unaudited consolidated balance sheets of the Company and the Company Subsidiaries and the related unaudited consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s quarterly reports on Form 10-Q filed with the SEC for the quarterly period ending September 30, 2020 (collectively, the “Company Financial Statements”) (i) have been prepared from, and are in accordance with, the books and records of the Company and the Company Subsidiaries, (ii) complied, as of the date of such filing, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, (iii) have been prepared in accordance with GAAP applied on a consistent basis and (iv) present fairly in all material respects the consolidated financial position of the Company and the Company Subsidiaries at the dates and the consolidated results of operations, changes in stockholders’ equity and cash flows of the Company and the Company Subsidiaries for the periods stated therein.

(h)      Reports.  Since December 31, 2017, the Company and each Company Subsidiary have filed all material reports, registrations, documents, filings, statements and submissions, together with any required amendments thereto, that they were required to file with any Governmental Entity, including all those required under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof (the foregoing, collectively, being referred to herein as the “Company Reports”) and have paid all material fees and assessments due and payable in connection therewith.  As of their respective filing dates, or as subsequently amended prior to the date hereof, the Company Reports complied in all material respects with all statutes and applicable rules and regulations of the applicable Governmental Entities.  As of the date of this Agreement, there are no outstanding comments from the SEC or any other Governmental Entity with respect to any Company Report that were the subject of written correspondence that have not been resolved.  The Company Reports, including the documents incorporated by reference in each of them, each contained all the information required to be included in it and, when it was filed and, as of the date of each such Company Report filed with the SEC, or if amended prior to the date of this Agreement, as of the date of such amendment, did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in it, in light of the circumstances under which they were made, not misleading and complied as to form in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  No executive officer of the Company has failed in any respect to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002.

9

(i)       Internal Accounting and Disclosure Controls.  The records, systems, controls, data and information of the Company and the Company Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of the Company or the Company Subsidiaries (including all means of access thereto and therefrom) or reputable banking industry service providers, except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have an adverse effect on the system of internal accounting controls described below in this Section 2.2(i).  The Company (i) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) intended to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known to the chief executive officer and the chief financial officer of the Company by others within those entities, and (ii) has disclosed, based on its most recent evaluation prior to the date of this Agreement, to the Company’s outside auditors and the audit committee of the Board of Directors (A) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information, and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.  As of the date of this Agreement, the Company has no Knowledge of any reason that its outside auditors and its chief executive and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when due.  Since December 31, 2017, neither the Company nor any Company Subsidiary nor, to the Knowledge of the Company, any director, officer, employee, auditor, accountant or representative of the Company or any Company Subsidiary has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any Company Subsidiary or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any Company Subsidiary has engaged in questionable accounting or auditing practices.

(j)        Data Privacy.

(i)         The Company and the Company Subsidiaries have taken reasonable steps consistent with customary industry practices to protect the confidentiality, integrity, availability and security of the computers, servers, workstations, routers, hubs, switches, circuits, networks and other information technology equipment owned or controlled by them or by any third party and material to the Company and the Company Subsidiaries (the “Company IT Assets”) (and all information and transactions stored or contained therein or transmitted thereby) against any unauthorized use, access, interruption, modification or corruption, and there has been no unauthorized use, access, interruption, modification or corruption of the Company IT Assets.

10

(ii)        In connection with their receipt, purchase, collection, securing, safeguarding, storage, transfer (including any transfer across national borders), disclosure, destruction/disposal, and/or use or other processing of any Personal Information, each of the Company and the Company Subsidiaries, is and has been, in material compliance with all Privacy Laws, their respective privacy policies and the requirements of any contract or codes of conduct to which any of the Company or the Company Subsidiaries is a party.  The privacy policies of the Company are customary for the industry in which the Company operates.  The Company and the Company Subsidiaries have commercially reasonable and appropriate physical, technical, organizational, and administrative security measures and policies in place designed to protect all Personal Information collected by them or on their behalf from and against unauthorized access, use, interruption, modification, corruption, and/or disclosure.  The Company and the Company Subsidiaries have binding written agreements obligating (in accordance with and as required by Privacy Laws (as applicable)) all third parties collecting, accessing, receiving, storing or processing Personal Information on behalf of the Company and the Company Subsidiaries to (i) comply with all applicable Privacy Laws, (ii) take commercially reasonable and appropriate steps to protect and secure such Personal Information from and against unauthorized access, use interruption, modification, corruption, and/or disclosure which are no less stringent than those applied by the Company and the Company Subsidiaries and (iii) promptly notify the Company and the Company Subsidiaries of any unauthorized access, use interruption, modification, corruption, and/or disclosure of Personal Information or Company IT Assets processing Personal Information.  The Company and the Company Subsidiaries are, and since December 31, 2017, have been, in compliance in all material respects with all Privacy Laws and any other applicable Laws in all relevant jurisdictions relating to data loss, theft and breach of security notification obligations.  Since December 31, 2017, none of the Company or any of the Company Subsidiaries has experienced a material breach of its information technology systems or a data loss or theft as defined by the Laws in all relevant jurisdictions.  None of the Company or any of the Company Subsidiaries has been charged with, or received any notice of any claims of, the violation in any material respect of any Privacy Laws or any of their respective privacy policies.  The consummation of the transactions contemplated hereby will not breach or otherwise cause any violation of any Privacy Law.

(iii)        For the purposes of this Section 2.2(j):

(1)           “Personal Information” means, in addition to any definition provided by applicable law or by the Company and the Company Subsidiaries in any of their respective privacy policies, contracts, or other public-facing statements for any similar term (e.g., “personally identifiable information” or “PII”), all information identifying, regarding or capable of being associated with an individual person or device.  Personal Information may relate to any individual, including a current, prospective or former client (or a client’s customer or end user) or employee of any Person, and includes information in any form, including paper, electronic and other forms.

11

(2)           “Privacy Laws” means all applicable laws, legal requirements, and self-regulatory guidelines and principles relating to privacy, data security, and Personal Information and similar applicable consumer protection laws, including with respect to the receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security, disposal, destruction, disclosure or transfer of Personal Information and any and all applicable laws governing breach notification in connection with Personal Information.  As used in this Agreement, “Privacy Laws” shall include the California Consumer Privacy Act, General Data Protection Regulation and the rules and regulations promulgated thereunder, and applicable state laws.

(k)     No Undisclosed Liabilities.  There are no liabilities of the Company or any of the Company Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, except for (i) liabilities adequately reflected or reserved against in accordance with GAAP in the Company’s audited balance sheet as of December 31, 2019 and (ii) liabilities that have arisen in the ordinary and usual course of business and consistent with past practice since December 31, 2019 and that have not or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(l)      Mortgage Lending.  The Company and each of the Company Subsidiaries have complied in all material respects with, and all documentation in connection with the origination, processing, underwriting and credit approval of any mortgage loan originated, purchased or serviced by the Company or any Company Subsidiary has satisfied, in all material respects (i) all Laws with respect to the origination, insuring, purchase, sale, servicing, or filing of claims in connection with mortgage loans, including all Laws relating to real estate settlement procedures, consumer credit protection, truth in lending laws, usury limitations, fair housing, transfers of servicing, collection practices, equal credit opportunity and adjustable rate mortgages, (ii) the responsibilities and obligations relating to mortgage loans set forth in any agreement between the Company and any Agency, Loan Investor or Insurer, (iii) the applicable rules, regulations, guidelines, handbooks and other requirements of any Agency, Loan Investor or Insurer and (iv) the terms and provisions of any mortgage or other collateral documents and other loan documents with respect to each mortgage loan.

(m)     Bank Secrecy Act; Anti-Money Laundering; OFAC; and Customer Information.  The Company is not aware of, has not been advised of, and, to the Knowledge of the Company, has no reason to believe that any facts or circumstances exist that would cause it or any Company Subsidiary to be deemed to be not operating in compliance, in all material respects, with the Bank Secrecy Act of 1970, as amended, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (also known as the USA PATRIOT Act), any order or regulation issued by the Treasury’s Office of Foreign Assets Control (“OFAC”), or any other applicable anti-money laundering or anti-terrorist-financing statute, rule or regulation.  The Company is not aware of any facts or circumstances that would cause it to believe that any nonpublic customer information has been disclosed to or accessed by an unauthorized third party in a manner that would cause it to undertake any material remedial action.  The Company and each of the Company Subsidiaries have adopted and implemented an anti-money laundering program that contains adequate and appropriate customer identification verification procedures that comply with the USA PATRIOT Act and such anti-money laundering program meets the requirements in all material respects of Section 352 of the USA PATRIOT Act and the regulations thereunder, and they have complied in all respects with any requirements to file reports and other necessary documents as required by the USA PATRIOT Act and the regulations thereunder.  The Company will not directly or indirectly use the proceeds of the sale of the Common Stock pursuant to transactions contemplated by this Agreement, or lend, contribute or otherwise make available such proceeds to any Company Subsidiary, joint venture partner or other Person, towards any sales or operations in any country appearing on the OFAC Specially Designated Nationals List (“SDN List”) or for the purpose of financing the activities of any Person currently appearing on the SDN List.

12

(n)      Other Regulatory Matters.

(i)          Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Bank has properly administered all accounts for which it acts as a fiduciary, including accounts for which it serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor, in accordance with the terms of the governing documents, applicable federal and state law and regulation and common law.  Neither the Bank nor any of its directors, officers or employees has committed any breach of trust or fiduciary duty with respect to any such fiduciary account that could reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.  Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the accountings for each such fiduciary account are true and correct and accurately reflect the assets of such fiduciary account.

(ii)        The deposit accounts of the Bank are insured by the Federal Deposit Insurance Corporation (“FDIC”) to the fullest extent permitted by the Federal Deposit Insurance Act, as amended, and the rules and regulations of the FDIC thereunder, and all premiums and assessments required to be paid in connection therewith have been paid when due (after giving effect to any applicable extensions). The Company beneficially owns all of the outstanding capital securities of, and has sole control of, the Bank.

(o)      Certain Payments.  Neither the Company nor any of the Company Subsidiaries, nor any directors, officers, nor to the Knowledge of the Company, employees or any of their Affiliates or any other Person who to the Knowledge of the Company is associated with or acting on behalf of the Company or any of the Company Subsidiaries has directly or indirectly (i) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment in material violation of any Law, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable anti-bribery or anti-corruption laws, to any Person, private or public, regardless of form, whether in money, property, or services (A) to obtain favorable treatment in securing business for the Company or any of the Company Subsidiaries, (B) to pay for favorable treatment for business secured by the Company or any of the Company Subsidiaries, or (C) to obtain special concessions or for special concessions already obtained, for or in respect of the Company or any of the Company Subsidiaries or (ii) established or maintained any fund or asset with respect to the Company or any of the Company Subsidiaries that was required by Law or GAAP to have been recorded and was not recorded in the books and records of the Company or any of the Company Subsidiaries.  Neither the Company nor any Company Subsidiaries has conducted any internal investigation, made any voluntary, directed, or involuntary disclosure to any Governmental Entity, or received any audit report, written communication from a Governmental Entity, or whistleblower or other written complaint, involving alleged violations in any material respect of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable anti-bribery or anti-corruption laws on the part of the Company, any of the Company Subsidiaries, or any Person acting on behalf of the Company or any of the Company Subsidiaries.

13

(p)     Absence of Certain Changes.  Since December 31, 2019 and except as Previously Disclosed or as required or contemplated by the terms of this Agreement, (i) the Company and the Company Subsidiaries have conducted their respective businesses in all material respects in the ordinary and usual course of business consistent with past practices, (ii) through (and including) the date of this Agreement, no fact, event, change, condition, development, circumstance or effect has occurred that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (iii) no material default (or event which, with notice or lapse of time, or both, would constitute a material default) exists on the part of the Company or any Company Subsidiary in the due performance and observance of any term, covenant or condition of any agreement to which the Company or any Company Subsidiary is a party and which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(q)      Compliance with Laws.

(i)          The Company, each Company Subsidiary and each of their officers, agents, representatives and employees possesses, holds and have all material permits, licenses, franchises, authorizations, orders, consents, registrations, accreditations and approvals of, and have made all filings, applications and registrations with, Governmental Entities that are required in order to permit the Company and each Company Subsidiary to own or lease their properties and assets and to carry on their business as presently conducted and that are material to the business of the Company and each Company Subsidiary (collectively, the “Governmental

          Authorizations”\).  The Company and the Company Subsidiaries, and to the Company’s Knowledge, their respective officers, agents, representatives and employees, are not in default under any of such Governmental Authorizations, which
      default\(s\) would be, or be reasonably expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries \(taken as a whole\).  The Company and each Company Subsidiary have complied with and \(A\) are not, and
      since December 31, 2017, have not been, in default or violation in any respect of, \(B\) are not under investigation with respect to, and \(C\) have not been threatened to be charged with or given notice of any material violation of, any applicable
      material domestic \(federal, state or local\) or foreign law, statute, ordinance, license, rule, regulation, policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental Entity \(each, a “Law”\), other than such noncompliance, defaults or violations as would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries \(taken as a whole\).  No
      Governmental Entity has placed any material restriction on the business or properties of the Company or any of the Company Subsidiaries.  As of the date hereof, the Bank has a Community Reinvestment Act rating of “outstanding.”

14

(ii)         Except for normal examinations conducted by a Governmental Entity in the ordinary course of business of the Company and the Company Subsidiaries, (A) no Governmental Entity has initiated or has pending any proceeding or, to the Knowledge of the Company, investigation into the business or operations of the Company or any of the Company Subsidiaries since December 31, 2017, (B) there is no unresolved violation or exception by any Governmental Entity with respect to any report or statement relating to any examinations or inspections of the Company or any of the Company Subsidiaries, and (C) there have been no formal or informal inquiries by, or disagreements or disputes with, any Governmental Entity with respect to the business, operations, policies or procedures of the Company or any of the Company Subsidiaries since December 31, 2017, in each case of clauses (A) through (C), which would reasonably be expected, individually or in the aggregate, to be material to the Company and the Company Subsidiaries (taken as a whole).

(iii)        The Company and the Company Subsidiaries are not, and since December 31, 2017, have not been, in violation or default of any provisions of their respective certification of incorporation or bylaws (or similar governing documents).

(r)       Adequate Capitalization.  As of December 31, 2020, the Bank met or exceeded the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.  As of the Closing and after giving effect to this Agreement, the transactions contemplated hereby and the Concurrent Transactions, the Bank meets or exceeds the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.

(s)     Agreements with Regulatory Agencies.  The Company and the Company Subsidiaries (A) are not subject to any cease-and-desist or other similar order or enforcement action issued by, (B) are not a party to any written agreement, consent agreement or memorandum of understanding with, (C) are not a party to any commitment letter or similar undertaking to, and (D) are not subject to any capital directive by, and since December 31, 2019, neither the Company nor any of the Company Subsidiaries has adopted any board resolutions at the request of any Governmental Entity that currently restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its liquidity and funding policies and practices, its ability to pay dividends, its credit, risk management or compliance policies, its internal controls, its management or its operations or business, nor has the Company nor any of the Company Subsidiaries been advised since December 31, 2019 by any Governmental Entity that it is considering issuing, initiating, ordering, or requesting any of the same.

(t)      Insurance.  The Company and each of the Company Subsidiaries are presently insured, and have been insured for at least the past two years, for reasonable amounts with financially sound and reputable insurance companies against such risks as companies engaged in a similar business would, in accordance with good business practice, customarily be insured.  All of the policies, bonds and other arrangements providing for the foregoing (the “Company Insurance Policies”) are in full force and effect, the premiums due and payable thereon have been or will be timely paid through the Closing Date, and there is no material breach or default (and no condition exists or event has occurred that, with the giving of notice or lapse of time or both, would constitute such a material breach or default) by the Company or any of the Company Subsidiaries under any of the Company Insurance Policies or, to the Knowledge of the Company, by any other party to the Company Insurance Policies.  Neither the Company nor any of the Company Subsidiaries has received any written notice of cancellation or non-renewal of any Company Insurance Policy nor, to the Knowledge of the Company, is the termination of any such policies threatened in writing by the insurer, and there is no material claim for coverage by the Company, or any of the Company Subsidiaries, pending under any of such Company Insurance Policies as to which coverage has been denied or disputed by the underwriters of such Company Insurance Policies or in respect of which such underwriters have reserved their rights.  To the Company’s Knowledge, no facts or circumstances exist that would prevent the Company and the Company Subsidiaries from renewing its existing insurance coverage as and when such coverage expires or to obtain substantially similar coverage from similar insurers as may be necessary to continue its business.

15

(u)      Title.  The Company and the Company Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and valid title to all material personal property owned by them, in each case free and clear of all Liens, except for Liens which do not materially affect the value of such property or do not interfere with the use made and proposed to be made of such property by the Company or any Company Subsidiary.  Any real property and facilities held under lease by the Company or the Company Subsidiaries are leased pursuant to valid, subsisting and enforceable leases with such exceptions that are not material and do not interfere with the use made and proposed to be made of such property and facilities by the Company or the Company Subsidiaries.

(v)      Intellectual

            Property.  The Company and the Company Subsidiaries own or possess adequate rights or licenses to use all trademarks, service marks and all applications and registrations therefor, trade
        names, patents, patent rights, copyrights, original works of authorship, inventions, trade secrets and other intellectual property rights \(collectively, “Intellectual Property Rights”\) used in
        their businesses as conducted on the date of this Agreement, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  To the Knowledge of the Company, no product or service of the Company
        or the Company Subsidiaries infringes the Intellectual Property Rights of others.

(w)     Employee Benefits.

(i)          Section 2.2(v) of the Disclosure Schedule sets forth a correct and complete list of each “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including, without limitation, multiemployer plans within the meaning of Section 3(37) of ERISA), and all stock purchase, stock option, severance, employment, change-in-control, fringe benefit, bonus, incentive, deferred compensation and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transactions contemplated by this Agreement or otherwise), whether formal or informal, oral or written, under which (A) any current or former employee or director of the Company or any of the Company Subsidiaries (the “Company Employees”) has any present or future right to benefits and which are contributed to, sponsored by or maintained by the Company or any of the Company Subsidiaries or (B) the Company or any Company Subsidiary has had or has any present or future liability. All such plans, agreements, programs, policies and arrangements are collectively referred herein to as the “Benefit Plans.”

16

(ii)         (A) Each Benefit Plan has been established and administered in all material respects in accordance with its terms, and in compliance with the applicable provisions of ERISA, the Code and other Laws; (B) no “reportable event” (as such term is defined in Section 4043 of ERISA) that could reasonably be expected to result in material liability has occurred with respect to any Benefit Plan, and (C) no non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) has been engaged in by the Company or any Company Subsidiary with respect to any Benefit Plan that has or is expected to result in any material liability or “accumulated funding deficiency” (as such term is defined in Section 302 of ERISA and Section 412 of the Code (whether or not waived)).

(iii)        The Company and the Company Subsidiaries will be in compliance, as of the Closing Date, with Sections 111 and 302 of the Emergency Economic Stabilization Act of 2008, as amended by the U.S. American Recovery and Reinvestment Act of 2009, including all guidance issued thereunder by a Governmental Entity (collectively “EESA”).

(iv)       None of the Company or any Company Subsidiary or any trade or business, whether or not incorporated (an “ERISA Affiliate”), all of which together with the Company or any Company Subsidiary would be deemed a “single employer” within the meaning of Section 4001 of ERISA, has, at any time during the last six years, contributed to or been obligated to contribute to any plan that is (i) subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code or (ii) a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA (a “Multiemployer Plan”) or a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA; and none of Company and the Company Subsidiaries nor any of their respective ERISA Affiliates has incurred any liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as those terms are defined in Part I of Subtitle E of Title IV of ERISA.

(v)         Neither the Company nor any Company Subsidiary has any material unfunded liabilities existing under or in connection with any Benefit Plan, and each such Benefit Plan has been established and administered in all respects in accordance with its terms, and in compliance with applicable law, except where failure to be in compliance would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.

(vi)        Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby could (either alone or in conjunction with any other event) reasonably be expected to result in, cause the accelerated vesting, funding or delivery of, or increase the amount or value of, any payment or benefit to any employee, officer or director of the Company or any Company Subsidiary.

17

(x)      Taxes.  All material Tax Returns required to be filed by, or on behalf of, the Company or the Company Subsidiaries have been timely filed, or will be timely filed, in accordance with all Laws, and all such Tax Returns are, or will be at the time of filing, complete and correct in all material respects.  The Company and the Company Subsidiaries have timely paid all material Taxes due and payable (whether or not shown on such Tax Returns), or, where payment is not yet due, have made adequate financial statement provisions therefor in accordance with GAAP.  There are no Liens with respect to Taxes upon any of the assets or properties of either the Company or the Company Subsidiaries other than with respect to Taxes not yet due and payable.  As of the date of this Agreement, there are not pending or threatened in writing, any audits, examinations, investigations or other proceedings initiated by the Internal Revenue Service in respect of U.S. federal income tax matters.  None of the Company or any of the Company Subsidiaries has been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the date hereof that was purported or intended to be governed by Section 355 of the Code (or any similar provision of state, local or foreign Law).  The Company and each Company Subsidiary is, and has been since the date of its formation, a corporation for U.S. federal income tax purposes, and neither the Company nor any Company Subsidiary has elected pursuant to the Code to be treated as a Subchapter S corporation pursuant to Section 1362(a) of the Code, nor has it made any other elections pursuant to the Code (other than elections that relate solely to methods of accounting, depreciation or amortization) that would have, or be reasonably expected to result in, individually or in the aggregate, a Material Adverse Effect.

(y)      Labor.

(i)         Employees of the Company and the Company Subsidiaries are not represented by any labor union nor are any collective bargaining agreements otherwise in effect with respect to such employees.  No labor organization or group of employees of the Company or any Company Subsidiary has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions presently pending or threatened to be brought or filed with the National Labor Relations Board or any other labor relations tribunal or authority, nor have there been in the last three years.  There are no strikes, work stoppages, slowdowns, labor picketing lockouts, material arbitrations or material grievances, or other material labor disputes pending or, to the Knowledge of the Company, threatened against or involving the Company or any Company Subsidiary, nor have there been any in the past year.

(ii)         Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company and the Company Subsidiaries are in compliance with all federal and state Laws and requirements respecting employment and employment practices, terms and conditions of employment, collective bargaining, disability, immigration, health and safety, wages, hours and benefits, non-discrimination in employment, workers’ compensation and the collection and payment of withholding and/or payroll taxes and similar taxes.

(iii)      There is no charge or complaint pending or threatened before any Governmental Entity alleging unlawful discrimination in employment practices, unfair labor practices or other unlawful employment practices by the Company or any Company Subsidiary.

(iv)        To the Knowledge of the Company, since December 31, 2017, (i) no allegations of sexual harassment or misconduct have been made against (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000, and (ii) neither the Company nor any of the Company Subsidiaries has entered into any settlement agreements related to allegations of sexual harassment or misconduct by (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000.

18

(z)      Brokers and Finders.  Except as Previously Disclosed, neither the Company nor any of its officers, directors, employees or agents has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Company in connection with this Agreement or the transactions contemplated hereby, the fees of which would be payable by the Investor.

(aa)    Offering of Securities.

(i)          Neither the Company nor any Person acting on its behalf has taken any action (including any offering of any securities of the Company under circumstances which would require the integration of such offering with the offering of any of the Shares to be issued pursuant to this Agreement under the Securities Act and the rules and regulations of the SEC promulgated thereunder) which would subject the offering, issuance or sale of any of the Shares to be issued pursuant to this Agreement to be subject to the registration requirements of the Securities Act.  Neither the Company nor any Person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Shares pursuant to the transactions contemplated by this Agreement.  Assuming the accuracy of the Investor’s representations and warranties set forth in this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investor.

(ii)         The Company is not disqualified from relying on Rule 506 of Regulation D (“Rule 506”) under the Securities Act for any of the reasons stated in Rule 506(d) (each such reason, a “Disqualification Event”) in connection with the issuance and sale of the Shares to the Investor.  The Company has furnished the Investor, a reasonable time prior to the date hereof, a description in writing of any matters that would have triggered disqualification under Rule 506(d) but which occurred before September 23, 2013, in each case, in compliance with the disclosure requirements of Rule 506(e).

(bb)    Affiliate Transactions.  No officer, director, five percent (5%) stockholder or other Affiliate of the Company (or any Company Subsidiary), or any individual who, to the Knowledge of the Company, is related by marriage or adoption to or shares the same home as any such Person, or any entity which, to the Knowledge of the Company, is controlled by any such Person (collectively, an “Insider”), is a party to any contract or transaction with the Company (or any Company Subsidiary) which pertains to the business of the Company (or any Company Subsidiary) or has any interest in any property, real or personal or mixed, tangible or intangible, used in or pertaining to the business of the Company or any Company Subsidiary.  The foregoing representation and warranty does not include deposit accounts of an Insider at the Company or any Company Subsidiary or loans of $250,000 or less made in the ordinary course of business to Insiders in compliance with Regulation O and other applicable Law.

19

(cc)    Private Placement.  Assuming the accuracy of the Investor’s representations and warranties set forth in Section 2.3 of this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investor.  Assuming the Stockholder Approval is obtained (if required), the issuance and sale of the Shares hereunder does not contravene the rules and regulations of the Nasdaq Stock Market.

(dd)    Listing and Maintenance Requirements.  The Company’s Voting Common Stock is (and at the Closing, the Class A Common Stock will be) registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to terminate the registration of the Voting Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received written notice from the Nasdaq Stock Market to the effect that the Company is not in compliance with the listing or maintenance requirements of the Nasdaq Stock Market.

(ee)    Investment Company.  Neither the Company nor any of the Company Subsidiaries is required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

(ff)     Acknowledgment Regarding the Investor’s Purchase of Shares.  The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby.  The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions and any advice given by the Investor or any of its representatives or agents in connection with this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions is merely incidental to Investor’s purchase of the Shares.

(gg)    No General Solicitation or General Advertising.  Neither the Company nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Shares.

(hh)    Shell Company Status.  The Company is not, and has never been, an issuer identified in Rule 144(i)(1) under the Securities Act.

(ii)      Valid Issuance of Shares.  The Shares sold and delivered in accordance with the terms hereof for the consideration expressed herein will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws.  Assuming the accuracy of the representations and warranties of the Investor set forth in Section 2.3, the Shares will be issued in compliance with all applicable federal and state securities laws.

2.3     Representations

          and Warranties of the Investor.   Except as Previously Disclosed, the Investor hereby represents and warrants to the Company, as of the date hereof and as of the Closing Date \(except for the representations and warranties that are
      as of a specific date which are made as of that date\) that:

20

(a)      Organization and Authority.  The Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and where failure to be so qualified would be reasonably expected to materially and adversely impair or delay its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

(b)      Authorization; No Conflicts.

(i)         The Investor has the necessary power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by its board of directors, general partner or managing members, investment committee, investment adviser or other authorized person, as the case may be, and no further approval or authorization by any of its stockholders, partners or other equity owners, as the case may be, is required.  This Agreement has been duly and validly executed and delivered by the Investor and, assuming due authorization, execution and delivery by the Company is the valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

(ii)         Neither the execution, delivery and performance by the Investor of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by the Investor with any of the provisions hereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any Liens upon any of the properties or assets of the Investor under any of the terms, conditions or provisions of (1) its articles of incorporation or bylaws, its certificate of limited partnership or partnership agreement or its similar governing documents or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Investor is a party or by which the Investor may be bound, or to which the Investor or any of the properties or assets of the Investor may be subject, or (B) violate any Law applicable to the Investor or any of its properties or assets, except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to materially adversely affect the Investor’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

(c)       Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of this Agreement or for the purchase by the Investor of the Shares pursuant to this Agreement.

21

(d)      Purchase for Investment; Accredited Investor Status; Pre-Existing Relationship.  The Investor acknowledges that the Shares to be purchased by the Investor pursuant to this Agreement have not been registered under the Securities Act or under any state securities laws and may not be resold or transferred by the Investor without such registration or appropriate reliance on any available exemption from such requirements.  The Investor (i) is acquiring the Shares pursuant to an exemption from the registration requirements of the Securities Act and other applicable securities laws solely for investment with no present intention to distribute any of the Shares to any Person, (ii) will not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, (iii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Shares and of making an informed investment decision and (iv) is an “accredited investor” (as that term is defined by Rule 501 under the Securities Act), (vi) is aware that the Company has entered into the Merger Agreement pursuant to which it is required to file with the SEC a Registration Statement on Form S-4 (the “Registration Statement”), and (vi) began discussions regarding the potential for the Investment by this Agreement with representatives of the Company before the Registration Statement was filed with the SEC and Investor’s purchase of the Shares was not solicited by the Registration Statement or any other filing made by the Company with the SEC.

(e)      Brokers and Finders.  Neither the Investor, nor its Affiliates nor any of their respective officers or directors, has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Investor in connection with this Agreement or the transactions contemplated hereby.

(f)      Access to Information.  The Investor acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and the Company Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the Investment; and (iv) the opportunity to ask questions of management of the Company.

(g)     No Reliance.  The Investor has not relied on any representation or warranty made by any Person by or on behalf of the Company, including, without limitation, the Placement Agents, in connection with the Investment other than those contained in this Agreement.

(h)      Placement Agents.  The Investor acknowledges that the Placement Agents have not performed any due diligence review on behalf of the Investor.  Furthermore, the Investor will purchase the Shares directly from the Company and not from the Placement Agents and understands that neither the Placement Agents nor any other broker or dealer has any obligation to make a market in the Common Stock.

22

(i)     Accuracy of Representations.  The Investor understands that each of the Placement Agents and the Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements in connection with the transactions contemplated by this Agreement and agrees that if any of the representations or acknowledgements made by it are no longer accurate as of the Closing Date, or if any of the agreements made by it are breached on or prior to the Closing Date, it shall promptly notify the Placement Agents and the Company.

ARTICLE 3.

COVENANTS

3.1      Conduct

          of Business Prior to Closing.  Except as otherwise expressly required or contemplated by this Agreement or applicable Law, or with the prior written consent of the Investor, between the date of this Agreement and the Closing, the
      Company shall, and the Company shall cause each Company Subsidiary to:

(a)       use commercially reasonable efforts to conduct its business only in the ordinary course of business consistent with past practice; and

(b)      use commercially reasonable efforts to (i) preserve the present business operations, organization (including officers and employees) and goodwill of the Company and any Company Subsidiary and (ii) preserve business relationships with customers, suppliers, consultants and others having business dealings with the Company; provided, however, that nothing in this clause (b) shall place any limit on the ability of the Board of Directors to act in accordance with, or require any actions that the Board of Directors may, in good faith, determine to be inconsistent with, its duties or the Company’s obligations under applicable Law or imposed by any Governmental Entity.

3.2      Use of Proceeds.

      The proceeds received by the Company from the sale of the Shares contemplated hereunder \(net of any applicable costs and expenses\) will be used in a manner consistent in all material respects with the capital
      deployment plan provided by the Company to the Investor prior to the execution of this Agreement.

3.3      Regulatory Filings.  The Company shall make all filings pursuant to any applicable state securities laws and Regulation D of the Securities Act that are required to be made in connection with the Closing.

3.4      Confidentiality.

      The Investor acknowledges that the information being provided to it in connection with the transactions contemplated hereby includes confidential information that has not been publicly disclosed and agrees to maintain the confidentiality of the
      information with the same degree of care that it uses to protect its own confidential information.

23

3.5     Publicity.  The Company shall not publicly disclose the financial or other terms of the transactions contemplated hereby or the name of any Investor or any Affiliate or investment adviser of any Investor, or include the name of any Investor or any Affiliate or investment adviser of any Investor in any press release or filing with the SEC or the Nasdaq Stock Market and shall not use any names, trademarks, service marks or trade names of the Investor or its Affiliates in any form of advertising and publicity or public statements, without the prior written consent of such Investor, except (i) as required by federal securities law in connection with the filing of final transaction documents with the SEC or (ii) to the extent such disclosure is required by applicable law, at the request of the staff of the SEC or at the request of the Nasdaq Stock Market regulations, in which case the Company shall provide each such Investor with prior written notice of such disclosure and the form of such disclosure shall be subject to the approval of such Investor, such approval not to be unreasonably withheld or delayed.

3.6     Commercially

          Reasonable Efforts.  Upon the terms and subject to the conditions herein provided, except as otherwise provided in this Agreement, each of the Parties hereto agrees to use its commercially reasonable efforts to take or cause to be
      taken all action, to do or cause to be done and to assist and cooperate with the other Party in doing all things necessary, proper or advisable under applicable Laws to consummate and make effective the transactions contemplated hereby, including
      but not limited to: \(a\) the satisfaction of the conditions precedent to the obligations of the Parties; \(b\) the obtaining of applicable Governmental Consents, and consents, waivers and approvals of any other third parties; \(c\) defending of any
      claim, action, suit, investigation or proceeding, whether judicial or administrative, challenging this Agreement or the performance of the obligations hereunder; and \(d\) the execution and delivery of such instruments, and the taking of such other
      actions as the other Party may reasonably request in order to carry out the intent of this Agreement.  Notwithstanding the foregoing, under no circumstances will the Investor be required to disclose to the Company, the Company Subsidiaries or any
      third party any information the disclosure of which is prohibited by Law, nor shall it be required to agree to any restrictions, conditions or commitments imposed or otherwise required by any Government Entity that are determined by the Investor
      in its sole discretion to be unduly burdensome, other than customary passivity commitments, in order to consummate and make effective the transactions contemplated hereby.

3.7      Legend.

(a)       The Investor agrees that all certificates or other instruments representing the Shares subject to this Agreement shall bear legends substantially to the following effect, until such time as they are not required under Section 3.7(b)

“THE SHARES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.”

24

(b)      Upon request of the Investor, the Company shall promptly cause such legends to be removed from any certificate for any Shares to be so transferred if such Shares are being transferred pursuant to an exemption from the registration securities requirements of the Securities Act and applicable state Laws, subject to receipt by the Company of an opinion of counsel for the Investor reasonably satisfactory to the Company to the effect that such legend is no longer required under the Securities Act and applicable state Laws.  The Investor acknowledges that the sale of the Shares provided for herein has not been registered under the Securities Act or under any state securities Laws and agrees that it shall not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities Laws.

3.8      Exchange Listing.  The Company shall use its reasonable best efforts to cause the Shares to be approved for listing on the Nasdaq Stock Market as promptly as possible.

3.9      Authorized Shares.  The Company shall at all times reserve, free of any preemptive or similar rights of stockholders of the Company, a number of unissued shares of Class A Common Stock, sufficient to convert automatically, in accordance with the terms of the certificate of incorporation of the Company, all of the shares of Class C Common Stock then outstanding.

3.10   Rule

          144 Reporting.  With a view to making available to the Investor the benefits of certain rules and regulations of the SEC which may permit the sale of the Shares by the Investor without registration under the Securities Act upon
      compliance with the initial holding period and other applicable requirements of Rule 144 under the Securities Act, the Company agrees to use its reasonable best efforts to:

(a)      make and keep adequate current public information with respect to the Company available, as those terms are understood and defined in Rule 144(c)(1) or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of this Agreement;

(b)      so long as the Investor owns any of the Shares, furnish to the Investor forthwith upon request: (A) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 under the Securities Act, and of the Exchange Act; (B) a copy of the most recent annual or quarterly report of the Company; and (C) such other reports and documents as the Investor may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any of the Shares without registration; and

(c)      to take such further action as the Investor may reasonably request, all to the extent required from time to time to enable the Investor to sell Shares without registration under the Securities Act.

25

3.11    Access to Information.  For so long as the Investor holds at least 50% of the Shares, the Company shall (a) furnish to the Investor the following, as soon as reasonably practicable after they become available (and in any event, no later than concurrently with the delivery of any such information to the other holders of the Shares), unless available on the United States Securities and Exchange Commission’s EDGAR site or successor system: (i) an audited consolidated balance sheet of the Company as of the end of the fiscal year in each year after December 31, 2020 and the related audited consolidated statements of income, changes in shareholders’ equity and cash flow for the fiscal year then ended, including the notes thereto prepared in accordance with GAAP, together with the report thereon of an independent certified public accountant and (ii) an unaudited consolidated balance sheet of the Company as of the end of each fiscal quarter ending after December 31, 2020 (other than those ending on December 31) and the related unaudited consolidated statements of income, changes in shareholders’ equity and cash flow for the interim period then ended and (b) provide the Investor reasonable access, during normal business hours, upon reasonable notice and in a manner that is not disruptive to the normal course of the Company’s business, to the Company’s management to discuss the Company’s and the Surviving Bank’s operations and developments, including regulatory developments.  To the extent that delivering any of the foregoing information to the Investor pursuant to this Section 3.11 would result in the Investor receiving material non-public information, the Company shall notify the Investor that such information qualifies as material non-public information and (i) prior to and as a condition to disclosing such information, the Company and the Investor shall execute a customary confidentiality agreement relating thereto and (ii) the Investor shall abide by applicable federal or state securities laws applicable to receipt of material non-public information. Notwithstanding anything in the contrary in this Section 3.12, the Company shall have no obligation to disclose information (x) that constitutes confidential supervisory information or that is reasonably considers to be confidential competitive information, or (y) the disclosure of which (1) it reasonably determines will violate applicable Law (including applicable bank secrecy Laws and similar legislation), (2) would result in the loss of any legal privilege or (3) would expose the Company to risk of liability for disclosure of personal information.

3.12    BHC Act Control.

(a)     Neither the Company nor any Company Subsidiary shall take any action (including any redemption, repurchase, or recapitalization of Voting Securities or Nonvoting Securities of the Company, or securities or rights, options or warrants to purchase Voting Securities or Nonvoting Securities of the Company, or securities of any type whatsoever that are, or may become, convertible into or exchangeable into or exercisable for Voting Securities or Nonvoting Securities of the Company, except where, solely with respect to any such redemption, repurchase or recapitalization of the Common Stock, the Investor is given the right to participate in such redemption, repurchase or recapitalization to the extent of the Investor’s pro rata proportion), that would cause the Investor’s total aggregate ownership percentage of (i) Voting Securities of the Company to exceed 4.9% of the issued and outstanding Voting Securities of the Company and (ii) Voting Securities and Nonvoting Securities of the Company together to exceed 24.9% of the total issued and outstanding equity of the Company, in each case consistent with the restrictions set forth in the guidance promulgated by the Board of Governors of the Federal Reserve (the “Federal Reserve”) for non-controlling equity investments, without the prior written consent of the Investor (which consent shall not be unreasonably withheld, conditioned or delayed); provided, that in the event of a sale, merger, consolidation or other similar transaction involving the Company following the Closing, the Company shall not take any action that would cause the Investor to own more than (i) 4.99% of the total issued and outstanding Voting Securities or (ii) 24.9% of the total issued and outstanding equity, in each case, of the acquirer or surviving company, as applicable, following consummation of any such transaction. For the purposes of this Agreement, “Voting Securities” shall have such meaning as defined in 12 C.F.R. 225.2(q)(1) and “Nonvoting Securities” shall have such meaning as defined in 12 C.F.R. 225.2(q)(2), as may be amended or modified from time to time.

26

(b)      In the event that the Company breaches its obligations under Section 3.12(a) or believes that it is reasonably likely to breach such obligations, it shall notify the Investor as promptly as practicable and shall cooperate in good faith with the Investor to modify any ownership or other arrangements or take any other action, in each case, as is necessary to cure or avoid such breach, in accordance with Sections 3.12(c) and 3.12(d).

(c)     In the event of (i) a determination by the Investor, based on advice of counsel (including internal counsel) that (A) it is impermissible under the Bank Holding Company Act of 1956, as amended (the “BHC Act”) or other applicable law or regulatory or supervisory guidance for the Investor to continue to hold, directly or indirectly, any Shares (or a type, class or series of such Shares), or (B) such continued holding of the Shares (or a type, class or series of such Shares) would be reasonably likely to result in the imposition of conditions or restrictions on the Investor’s activities or regulatory or supervisory requirements on the Investor arising under the BHC Act or other applicable law or regulatory or supervisory guidance (including any requirement that the Investor obtain an approval under the BHC Act); or (ii) the occurrence of any of the following: (A) a determination by the Federal Reserve that the Investor “controls” the Company (as “control” is used for purposes of the BHC Act), or an affirmative indication that the Federal Reserve would likely take such a view (through published guidance or other supervisory communications); (B) any other regulatory requirement, instruction or request by a Governmental Entity having jurisdiction over the Investor that the Investor divest or reduce its equity interest in the Company; or (B) a determination by the Investor, based on the advice of counsel (including internal counsel) that divesting or reducing its equity interest in the Company is necessary or advisable to satisfy legal and/or regulatory requirements or supervisory expectations) (any occurrence referred to in clause (i) or (ii) above, a “Regulatory Trigger Event”), then the Company shall use its commercially reasonable efforts to consult and cooperate with the Investor in order to restructure the Investor’s investment in the Company in a manner that avoids or remediates the matters giving rise to the Regulatory Trigger Event to the reasonable satisfaction of the Investor, taking account of legal or regulatory restrictions applicable to the Company. If any such avoidance or remediation involves the sale by the Investor of all or a portion of the Shares to a third party, then the Company shall use commercially reasonable efforts to facilitate such sale and transfer, including by making the Company’s management reasonably available during normal business hours to the prospective purchaser(s) of the Shares and providing customary due diligence material, subject to customary confidentiality undertakings.

(d)      The Investor may, at any time following a Regulatory Trigger Event, elect to voluntarily surrender to the Company any or all of the Shares (a “Voluntary

          Tender”\). The Company shall, upon written notice of the Investor’s intention to effect a Voluntary Tender, accept the tender of such Shares as a contribution to the Company for no consideration on the part of the Investor. The
      Company shall accept all such Shares specified in such Voluntary Tender as soon as practicable; provided, that to the extent that the Board of Directors determines that the acceptance of such Voluntary Tender would have a Material Adverse Effect
      or cause any other shareholder of the Company to be in violation of any applicable law, regulation or supervisory guidance, then the Company, the relevant shareholder \(if applicable\) and the Investor shall consult and cooperate to find a mutually
      agreeable solution to effect the Voluntary Tender or otherwise avoid or remediate the relevant Regulatory Trigger Event as promptly as practicable. The exercise of a Voluntary Tender shall be within the Investor’s sole and exclusive discretion
      and shall be in addition to, and not in lieu of, any other remedies available to the Investor under this Agreement.

27

ARTICLE 4.

TERMINATION

4.1      Termination.

      This Agreement may be terminated prior to the Closing:

(a)      by mutual written agreement of the Company and the Investor;

(b)     by either Party, upon written notice to the other Party in the event that the Closing does not occur on or before September 1, 2021; provided, however, that the right to terminate this Agreement pursuant to this Section 4.1(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;

(c)      by either Party, upon written notice to the other Party, (i) in the event that Stockholder Approval is required under applicable Law or the rules and regulations of the Nasdaq Stock Market, but has not been obtained on or prior to the closing date of the Merger or (ii) the Authorized Shares Increase Approval has not been obtained on or prior to the closing date of the Merger;

(d)      by the Investor, upon written notice to the Company, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Company in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(ii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in the absence of such breach or condition; provided that this Section 4.1(d) shall only apply if the Investor is not in material breach of any of the terms of this Agreement;

(e)      by the Company, upon written notice to the Investor, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Investor in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(iii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in absence of such breach or condition; provided that this Section 4.1(e) shall only apply if the Company is not in material breach of any of the terms of this Agreement; or

(f)       by any Party, upon written notice to the other Party, in the event that any Governmental Entity shall have issued any order, decree or injunction or taken any other action restraining, enjoining or prohibiting any of the transactions contemplated by this Agreement, and such order, decree, injunction or other action shall have become final and non-appealable.

4.2     Effects

          of Termination.  In the event of any termination of this Agreement as provided in Section 4.1, this Agreement \(other than Section 3.4, this Article 4 and Article 6 of this Agreement, which shall remain in full force and effect\)
      shall forthwith become wholly void and of no further force and effect; provided, that nothing herein shall relieve any Party from liability for fraud or willful breach of this Agreement.

28

ARTICLE 5.

INDEMNITY

5.1      Indemnification

          by the Company.

(a)      After the Closing, and subject to Sections 5.1(b), 5.3 and 5.4, the Company shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Investor and its Affiliates, and their respective successors and assigns, officers, directors, partners, members and employees, as applicable, (the “Investor Indemnified Parties”) against and from, and reimburse any of the Investor Indemnified Parties for, all Losses that any of the Investor Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Company in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by the Company to perform any of its covenants or agreements contained in this Agreement.  Notwithstanding anything herein to the contrary, the obligations of the Company under this Section 5.1(a) shall not be applicable to or inure to the benefit of any transferee of the Common Stock sold pursuant to this Agreement who is not an Affiliate of the Investor.

(b)      Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless any of the Investor Indemnified Parties against, or reimburse any of the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) (other than Losses arising out of the inaccuracy or breach of any Company Specified Representations) until the aggregate amount of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a) exceeds $100,000 (the “Threshold Amount”), upon the occurrence of which the Company shall be obligated for all of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a).  Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless the Investor Indemnified Parties against, or reimburse the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1.

(c)      For purposes of Section 5.1(a), in determining whether there has been a breach of a representation or warranty, the Parties hereto shall ignore any “materiality,” “Material Adverse Effect” or similar qualifications.

5.2      Indemnification

          by the Investor.

29

(a)      After the Closing, and subject to Sections 5.2(b), 5.3 and 5.4, the Investor shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Company and its respective Affiliates and their respective successors and assigns, officers, directors, partners, members, employees, representatives and agents (collectively, the “Company Indemnified Parties”) against and from, and reimburse any of the Company Indemnified Parties for, all Losses that the Company Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Investor in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by such Investor to perform any of its covenants or agreements contained in this Agreement.

(b)      Notwithstanding anything to the contrary contained herein, the Investor shall not be required to indemnify, defend or hold harmless any of the Company Indemnified Parties against, or reimburse any of the Company Indemnified Parties for any Losses pursuant to Section 5.2(a)(1) until the aggregate amount of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a) exceeds the Threshold Amount, upon the occurrence of which the Investor shall be obligated for all of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a)(1).  Notwithstanding anything to the contrary contained herein, the Investor shall not be required to indemnify, defend or hold harmless the Company Indemnified Parties against, or reimburse the Company Indemnified Parties for, any Losses pursuant to Section 5.2(a)(1) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1 hereof.

(c)      For purposes of Section 5.2(a), in determining whether there has been a breach of a representation or warranty, the Parties shall ignore any “materiality” or similar qualifications.

5.3      Notification of Claims.

(a)      Any Person that may be entitled to be indemnified under this Article 5 (the “Indemnified Party”) shall promptly notify the party or parties liable for such indemnification (the “Indemnifying Party”) in writing of any claim in respect of which indemnity may be sought hereunder, including any pending or threatened claim or demand by a third party that the Indemnified Party has determined has given or could reasonably give rise to a right of indemnification under this Agreement (including a pending or threatened claim or demand asserted by a third party against the Indemnified Party) (each, a “Third Party Claim”), describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or demand; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Agreement except to the extent that the Indemnifying Party is materially prejudiced by such failure.  The Parties agree that notices for claims in respect of a breach of a representation, warranty, covenant or agreement must be delivered prior to the expiration of any applicable survival period specified in Section 6.1 for such representation, warranty, covenant or agreement; provided, that if, prior to such applicable date, a Party hereto shall have notified the other Party hereto in accordance with the requirements of this Section 5.3(a) of a claim for indemnification under this Agreement (whether or not formal legal action shall have been commenced based upon such claim), such claim shall continue to be subject to indemnification in accordance with this Agreement notwithstanding the passing of such applicable date.

30

(b)      Upon receipt of a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) in respect of a Third Party Claim, the Indemnifying Party may, by notice to the Indemnified Party delivered within twenty (20) Business Days of the receipt of notice of such Third Party Claim, assume the defense and control of any Third Party Claim, with its own counsel reasonably acceptable to the Indemnified Party and at its own expense.  The Indemnified Party shall have the right to employ counsel on its own behalf for, and otherwise participate in the defense of, any such Third Party Claim, but the fees and expenses of its counsel will be at its own expense unless (A) the employment of counsel by the Indemnified Party at the Indemnifying Party’s expense has been authorized in writing by the Indemnifying Party, (B) the Indemnified Party reasonably believes there may be a conflict of interest between the Indemnified Party and the Indemnifying Party in the conduct of the defense of such Third Party Claim, (C) the Indemnified Party reasonably believes there are legal defenses available to it that are different from, additional to or inconsistent with those available to the Indemnifying Party, or (D) the Indemnifying Party has not in fact employed counsel to assume the defense of such Third Party Claim within a reasonable time after receipt of notice of the commencement of such Third Party Claim, in each of which cases the fees and expenses of such Indemnified Party’s counsel shall be at the expense of the Indemnifying Party; provided, however, that in the event that the Company is required to assume the fees and expenses of such Investor Indemnified Party’s counsel in accordance with the foregoing and such Investor Indemnified Party is similarly situated with any other “Investor Indemnified Party” under any of the other stock purchase agreements with respect to any Third Party Claim, and does not have any conflict of interest with such Person in the conduct of the defense of such Third Party Claim or have legal defenses available to it that are different from, additional to or inconsistent with those available to such Person, such Investor Indemnified Party shall be required to employ the same counsel as such Person and the Company shall be responsible for the fees and expenses of only one such counsel for such Investor Indemnified Party and such other Person or Persons (assuming any of clauses (A) through (D) above is satisfied).  The Indemnified Party may take any actions reasonably necessary to defend such Third Party Claim prior to the time that it receives a notice from the Indemnifying Party as contemplated by the immediately preceding sentence.  The Indemnified Party shall, and shall cause each of its Affiliates and representatives to, use reasonable best efforts to cooperate with the Indemnifying Party in the defense of any Third Party Claim.  The Indemnifying Party shall not, without the prior written consent of the Indemnified Party (which shall not be unreasonably withheld or delayed), consent to a settlement, compromise or discharge of, or the entry of any judgment arising from, any Third Party Claim, unless such settlement, compromise, discharge or entry of any judgment does not involve any statement, finding or admission of any fault, culpability, failure to act, violation of Law or admission of any wrongdoing by or on behalf of the Indemnified Party, and the Indemnifying Party shall (i) pay or cause to be paid all amounts arising out of such settlement or judgment concurrently with the effectiveness of such settlement or judgment (unless otherwise provided in such judgment), (ii) not encumber any of the assets of any Indemnified Party or agree to any restriction or condition that would apply to or materially adversely affect any Indemnified Party or the conduct of any Indemnified Party’s business and (iii) obtain, as a condition of any settlement, compromise, discharge, entry of judgment (if applicable), or other resolution, a complete and unconditional release of each Indemnified Party in form and substance reasonably satisfactory to such Indemnified Party from any and all liabilities in respect of such Third Party Claim.  An Indemnified Party shall not settle, compromise or consent to the entry of any judgment with respect to any claim or demand for which it is seeking indemnification from the Indemnifying Party or admit to any liability with respect to such claim or demand without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed); provided, that such consent shall not be required if the Indemnifying Party has not fulfilled any material obligations under this Section 5.3(b).

31

(c)      In the event any Indemnifying Party receives a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) that does not involve a Third Party Claim, the Indemnifying Party shall notify the Indemnified Party within twenty (20) Business Days following its receipt of such notice whether the Indemnifying Party disputes its liability to the Indemnified Party under this Agreement.  The Indemnified Party shall reasonably cooperate with and assist the Indemnifying Party in determining the validity of any such claim for indemnity by the Indemnified Party.

5.4     Indemnification

          Payment.  In the event a claim or any Action for indemnification hereunder has been finally determined, the amount of such final determination shall be paid by the Indemnifying Party to the Indemnified Party on demand in
      immediately available funds.  A claim or an Action, and the liability for and amount of damages therefor, shall be deemed to be “finally determined” for purposes of this Agreement when the Parties have so determined by mutual agreement or,
      if disputed, when a final non-appealable judicial order has been entered into with respect to such claim or Action.

5.5     Exclusive

          Remedies.  Subject to Section 6.14, each Party acknowledges and agrees that following the Closing, the indemnification provisions hereunder shall be the sole and exclusive remedies of the Parties for any breach of the
      representations, warranties or covenants contained in this Agreement.  No investigation of the Company by the Investor, or of the Investor by the Company, whether prior to or after the date of this Agreement, shall limit any Indemnified Party’s
      exercise of any right hereunder or be deemed to be a waiver of any such right.  The Parties agree that any indemnification payment made pursuant to this Agreement shall be treated as an adjustment to the Purchase Price for Tax purposes, unless
      otherwise required by Law.

ARTICLE 6.

MISCELLANEOUS

6.1      Survival.

      The representations and warranties of the Parties contained in this Agreement shall survive in full force and effect until the date that is fifteen \(15\) months after the Closing Date \(or until final resolution of any claim or action arising from
      the breach of any such representation and warranty, if notice of such breach was provided prior to the end of such period\), at which time they shall terminate and no claims shall be made for indemnification under Section 5.1 or Section 5.2, as
      applicable, for breaches of representations or warranties thereafter, except the Company Specified Representations \(other than the representations and warranties made in Section 2.2\(v\), which shall survive until the expiration of the applicable
      statute of limitations\) and the Investor Specified Representations shall survive the Closing indefinitely.  The covenants and agreements set forth in this Agreement shall survive until the expiration of any applicable statute of limitations or
      until performed or no longer operative in accordance with their respective terms.  Notwithstanding the foregoing, the Company Specified Representations shall survive for the period of the applicable statute of limitations.

32

6.2     Other

          Definitions.  Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa, and references to any
      agreement, document or instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time.  In addition, the following terms shall have the meanings assigned to them below:

(a)      the term “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person provided that no security holder of the Company shall be deemed to be an Affiliate of any other security holder or of the Company or any of the Company Subsidiaries solely by reason of any investment in the Company and, for purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under 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 or policies of such Person, whether through the ownership of voting securities, by contract or otherwise;

(b)     the term “Agency” means the Federal Housing Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home Administration (now known as Rural Housing and Community Development Services), the Federal National Mortgage Association, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture or any other federal or state agency with authority to (i) determine any investment, origination, lending or servicing requirements with regard to mortgage loans originated, purchased or serviced by the Company or (ii) originate, purchase, or service mortgage loans, or otherwise promote mortgage lending, including state and local housing finance authorities;

(c)      the term “Board of Directors” means the Board of Directors of the Company;

(d)     the term “Business Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York or in the State of California generally are authorized or required by Law or other governmental actions to close;

(e)      the term “Capital Stock” means the capital stock or other applicable type of equity interest in a Person;

(f)       the term “Code” means the Internal Revenue Code of 1986, as amended;

(g)      the term “Company Specified Representations” means the representations and warranties made in Section 2.2(a), Section 2.2(b), Section 2.2(c), Section 2.2(d), Section 2.2(x), Section 2.2(z) and Section 2.2(hh);

33

(h)      the term “Disclosure Schedule” shall mean a schedule delivered, on or prior to the date of this Agreement, by (i) the Investor to the Company and (ii) the Company to the Investor setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in Section 2.2 with respect to the Company, or in Section 2.3 with respect to the Investor, or to one or more covenants contained in Article 3;

(i)       the term “GAAP” means United States generally accepted accounting principles and practices as in effect from time to time;

(j)       the term “Governmental Consent” means any notice to, registration, qualification, designation, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Entity, or the expiration or termination of any statutory waiting periods;

(k)      the term “Governmental Entity” means any court, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign, and any applicable industry self-regulatory organization or securities exchange;

(l)       the term “Insurer” means a Person who insures or guarantees for the benefit of the mortgagee all or any portion of the risk of loss upon borrower default on any of the mortgage loans originated, purchased or serviced by the Bank, including the Federal Housing Administration, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any private mortgage insurer, and providers of hazard, title or other insurance with respect to such mortgage loans or the related collateral;

(m)     the term “Investor Specified Representations” means the representations and warranties made in Section 2.3(b)(i), Section 2.3(d) and Section 2.3(f);

(n)      the term “Knowledge” of the Company and words of similar import mean the knowledge of any directors or executive officers of the Company listed on the Disclosure Schedule hereto;

(o)      the term “Loan Investor” means any Person (including an Agency) having a beneficial interest in any mortgage loan originated, purchased or serviced by the Bank or a security backed by or representing an interest in any such mortgage loan;

(p)      the term “Losses” means any and all losses, damages, reasonable costs, reasonable expenses (including reasonable attorneys’ fees and disbursements), liabilities, settlement payments, awards, judgments, fines, obligations, claims, and deficiencies of any kind, excluding special, consequential, exemplary and punitive damages;

(q)     the term “Person” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, Governmental Entity or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity;

34

(r)     the term “Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company or other entity (x) of which such Person or a Subsidiary of such Person is a general partner or (y) of which a majority of the voting securities or other voting interests, or 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;

(s)      the term “Tax” or “Taxes” means all United States federal, state, local or foreign income, profits, estimated, gross receipts, windfall profits, severance, property, intangible property, occupation, production, sales, use, license, excise, emergency excise, franchise, capital gains, capital stock, employment, withholding, transfer, stamp, payroll, goods and services, value added, alternative or add-on minimum tax, or any other tax, custom, duty or governmental fee, or other like assessment or charge of any kind whatsoever, together with any interest, penalties, fines, related liabilities or additions to tax that may become payable in respect thereof imposed by any Governmental Entity, whether or not disputed;

(t)      the term “Tax Return” means any return, declaration, report or similar statement required to be filed with respect to any Taxes (including any attached schedules), including, without limitation, any information return, claim or refund, amended return and declaration of estimated Tax;

(u)      the term “Voting Securities” means at any time shares of any class of Capital Stock of the Company, including but not limited to Voting Common Stock (or, after giving effect to the Merger Transactions, Class A Common Stock), and Voting Debt that are then entitled to vote generally in the election of directors;

(v)      the word “or” is not exclusive;

(w)     the words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”;

(x)      the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision; and

(y)      all article, section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit and schedule references not attributed to a particular document shall be references to such exhibits and schedules to this Agreement.

6.3     Amendment

          and Waivers.  The conditions to each Party’s obligation to consummate the Closing are for the sole benefit of such Party and may be waived by such Party in whole or in part to the extent permitted by Law.  No amendment or waiver of
      any provision of this Agreement will be effective against any Party unless it is in a writing signed by a duly authorized officer of such Party.

35

6.4     Counterparts

          and Facsimile.  For the convenience of the Parties, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together
      constitute the same agreement.  Executed signature pages to this Agreement may be delivered by facsimile and such facsimiles shall be deemed as sufficient as if manually signed signature pages had been delivered.

6.5      Governing Law.  This Agreement will be governed by and construed in accordance with the Laws of the State of California applicable to contracts made and to be performed entirely within such State.

6.6      WAIVER

          OF JURY TRIAL.  TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, INVESTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS AGREEMENT, THE
      TRANSACTIONS CONTEMPLATED HEREBY WHETHER BASED ON CONTRACT, EQUITY, TORT OR ANY OTHER THEORY.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN BY INVESTOR, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

6.7     Notices.

      Any notice, request, instruction or other document to be given hereunder by any Party to the other will be in writing and will be deemed to have been duly given \(a\) on the date of delivery if delivered personally or by telecopy or facsimile, upon
      confirmation of receipt, \(b\) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or \(c\) on the third Business Day following the date of mailing if delivered by registered or certified
      mail, return receipt requested, postage prepaid, provided that any such notice, request, instruction or other document to be given hereunder shall not be deemed to have been duly given unless and until it is sent via electronic mail to the
      recipient thereof.  All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice.

(a)      If to the Investor, to the address set forth on the Investor’s signature page to this Agreement.

(b)      If to the Company:

Broadway Financial Corporation

5055 Wilshire Boulevard, Suite 500

Los Angeles, California 90036

Attn: Brenda Battey,

Chief Financial Officer

Email: bbattey@broadwayfederalbank.com

with a copy (which copy shall not constitute notice) to:

Arnold & Porter LLP

777 South Figueroa Street,

44th Floor

Los Angeles, California 90017

Attn: James R. Walther, Esq.

Fax: (213) 243-4199

Email: James.Walther@arnoldporter.com

36

6.8      Entire Agreement.

      This Agreement constitutes the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, inducements or conditions, both written and oral, among the Parties, with respect to the subject matter
      hereof and thereof.

6.9      Successors

          and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns, including any purchasers of the Common Stock to be issued pursuant to this Agreement.  The
      Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor.  The Investor may assign some or all of its rights hereunder or thereunder without the consent of the Company to any
      Affiliate of the Investor, and such assignee shall be deemed to be an Investor hereunder with respect to such assigned rights and shall be bound by the terms and conditions of this Agreement that apply to the Investor.

6.10    Captions.

      The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.

6.11    Severability.

      If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such
      provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal
      substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon 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.

6.12    Third

          Party Beneficiaries.  Nothing contained in this Agreement, expressed or implied, is intended to confer upon any Person other than the Parties, any benefit right or remedies, except that the Placement Agents may rely on the
      representations and warranties contained herein to the same extent as if they were party to this Agreement and the provisions of Sections 5.1 and 5.2 shall inure to the benefit of the Persons referred to in such Sections.

6.13   Public

          Announcements.  The Investor will not make \(and will use its reasonable best efforts to ensure that its Affiliates and representatives do not make\) any news release or public disclosure with respect to this Agreement and any of the
      transactions contemplated hereby, without first consulting with the Company and, in each case, also receiving the Company’s consent \(which shall not be unreasonably withheld, conditioned or delayed\).

6.14    Specific Performance.  The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms.  It is accordingly agreed that the Parties shall be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity.

37

6.15    No Recourse to Other Persons.  This Agreement may only be enforced against the named Parties.  All claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may be made only against the entities that are expressly identified as Parties or that are subject to the terms hereof, and no past, present or future director, officer, employee, incorporator, member, manager, partner, stockholder, Affiliate, agent, attorney or representative of any Party (including any person negotiating or executing this Agreement on behalf of a Party) shall have any liability or obligation with respect to this Agreement or with respect to any claim or cause of action, whether in tort, contract or otherwise, that may arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement and the transactions contemplated hereby.

[signature page follows]

38

IN WITNESS WHEREOF, the Parties 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:
---
Name: Wayne-Kent A. Bradshaw
--- ---
Title: President and Chief Executive Officer

[Stock Purchase Agreement]

CITICORP BANKING CORPORATION
By:
Name:
Title:
Address for notices:
---
Citicorp Banking Corporation
1 Penns Way
New Castle, DE 19721
Attention: Michael Brisgone
Email: michael.f.brisgone@citi.com
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
Attention: Ariel Deckelbaum
Email: ajdeckelbaum@paulweiss.com

[Stock Purchase Agreement]

EXECUTION VERSION

Exhibit 10.27

BROADWAY FINANCIAL CORPORATION

STOCK PURCHASE AGREEMENT

February 19, 2021

TABLE OF CONTENTS

Page
ARTICLE 1. PURCHASE; CLOSING 2
1.1 Issuance, Sale and Purchase 2
1.2 Closing; Deliverables for the Closing; Conditions to the Closing 2
ARTICLE 2. REPRESENTATIONS AND WARRANTIES 5
2.1 Certain Terms 5
2.2 Representations and Warranties of the Company 6
2.3 Representations and Warranties of the Investor 20
ARTICLE 3. COVENANTS 22
3.1 Conduct of Business Prior to Closing 22
3.2 Use of Proceeds 23
3.3 Regulatory Filings 23
3.4 Confidentiality 23
3.5 Publicity 23
3.6 Commercially Reasonable Efforts 24
3.7 Legend. 24
3.8 Exchange Listing 24
3.9 Authorized Shares 24
3.10 Rule 144 Reporting 25
3.11 Exchange Rights; Co-Redemption Rights 25
ARTICLE 4. TERMINATION 26
4.1 Termination 26
4.2 Effects of Termination 27
ARTICLE 5. INDEMNITY 27
5.1 Indemnification by the Company 27
5.2 Indemnification by the Investor 28
5.3 Notification of Claims 29
5.4 Indemnification Payment 31
5.5 Exclusive Remedies 31
ARTICLE 6. MISCELLANEOUS 31
6.1 Survival 31
6.2 Other Definitions 31

i

6.3 Amendment and Waivers 34
6.4 Counterparts and Facsimile 34
6.5 Governing Law 34
6.6 WAIVER OF JURY TRIAL 34
6.7 Notices 35
6.8 Entire Agreement 35
6.9 Successors and Assigns 36
6.10 Captions 36
6.11 Severability 36
6.12 Third Party Beneficiaries 36
6.13 Public Announcements 36
6.14 Specific Performance 36
6.15 No Recourse to Other Persons 36

INDEX OF DEFINED TERMS

Page
Action 9
Affiliate 32
Agency 32
Agreement 1
Authorized Shares Increase Approval 3
Bank 6
Bank Merger 1
Benefit Plans 16
Board of Directors 32
Business Day 32
Capital Stock 32
CDFI 6
CFB 1
CFB Sub 1
Class A Common Stock 1
Class B Common Stock 1
Class C Common Stock 1
Closing 2
Closing Date 2
Code 32
Common Stock 1
Company 1

ii

Company Employees 16
Company Financial Statements 9
Company Indemnified Parties 28
Company Insurance Policies 15
Company IT Assets 11
Company Reports 9
Company Specified Representations 32
Company Stock Plan 7
Company Subsidiaries 6
Company Subsidiary 6
Concurrent Other Transactions 1
control 32
controlled by 32
controlling 32
Disclosure Schedule 32
Disqualification Event 19
EESA 16
ERISA 16
ERISA Affiliate 17
Exchange Act 9
FDIC 6
Federal Reserve 6
GAAP 32
Governmental Authorizations 14
Governmental Consent 32
Governmental Entity 33
Indemnified Party 29
Indemnifying Party 29
Insider 19
Insurer 33
Intellectual Property Rights 16
Investment 1
Investor 1
Investor Indemnified Parties 27
Investor Specified Representations 33
Knowledge 33
Law 14
Liens 8
Loan Investor 33
Losses 33
Material Adverse Effect 5
Merger 1
Merger Agreement 1
Merger Transactions 1
Multiemployer Plan 17

iii

Non-Voting Common Stock 7
OFAC 12
Parties 1
Per Share Purchase Price 2
Person 33
Personal Information 11
Placement Agents 1
Preferred Stock 7
Previously Disclosed 5
Privacy Laws 12
Purchase Price 2
Registration Statement 21
Rule 506 19
SEC 5
Securities Act 7
Shares 2
SLHCA Act 6
Stockholder Approval 3
Subsidiary 33
Surviving Bank 1
Tax 33
Tax Return 34
Taxes 33
Third Party Claim 29
Threshold Amount 28
under common control with 32
Voting Common Stock 7
Voting Debt 7
Voting Securities 34

iv

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Agreement”)

      is dated as of February 19, 2021, and is entered into by and among Broadway Financial Corporation, a Delaware corporation \(the “Company”\), and First Republic Bank, a
      California state chartered bank \(the “Investor”, and together with the Company, the “Parties”\)

RECITALS

WHEREAS, the Company is a party to that certain Agreement and Plan of Merger (the “Merger Agreement”) with CFBanc Corporation, a District of Columbia benefit corporation (“CFB”) which provides, among other things and subject to the terms and conditions of the Merger Agreement, for (i) the merger of CFB with and into the Company, with the Company continuing as the surviving entity in the Merger (the “Merger”), (ii) immediately following the Merger, Broadway Federal Bank, f.s.b., a wholly owned subsidiary of the Company, will merge with and into City First Bank of D.C., National Association (“CFB Sub”), a wholly owned subsidiary of CFB (the “Bank Merger” and together with the Merger and the other transactions contemplated by the Merger Agreement, the “Merger Transactions”), with CFB Sub continuing as the surviving entity (the “Surviving Bank”), and (iii) the Company’s voting common stock, par value $0.01 per share, will be renamed Class A Common Stock (“Class A Common Stock”), a new class of non-voting common stock of the Company, par value $0.01 per share, will be created which will be named Class B Common Stock (“Class B Common Stock”) and the Company’s currently authorized non-voting common stock, par value $0.01 per share, will be renamed Class C Common Stock (the “Class C Common Stock” and collectively, the “Common Stock”);

WHEREAS, the Company has engaged Raymond James & Associates, Inc. and Keefe, Bruyette & Woods, Inc. as co-placement agents (the “Placement Agents”) for the offering of the Common Stock.

WHEREAS, the Company desires to issue and sell to the Investor, and the Investor desires to purchase from the Company, on the terms and conditions described herein, shares of Class A Common Stock at the Per Share Purchase Price specified herein (the “Investment”);

WHEREAS, the Investment is proposed to be made subject to completion of the Merger Transactions;

WHEREAS, it is proposed that the Company and the Investor enter into that certain investor’s rights agreement, dated as of the Closing Date, in the form of Exhibit A attached hereto (the “Investor’s Rights Agreement” and together with this Agreement, the “Transaction Agreements”);

WHEREAS, the Investment is proposed to be made concurrently with the sale by the Company of shares of Class A Common Stock and Class C Common Stock at the Per Share Purchase Price via private placement to certain other investors (the “Concurrent Other Transactions”); and

1

NOW, THEREFORE, in consideration of the premises, and of the respective representations, warranties, covenants and other agreements of the Parties set forth herein, the Parties hereby agree as follows:

ARTICLE 1.

      PURCHASE; CLOSING

1.1        Issuance, Sale and Purchase.  On the terms and subject to the conditions set forth herein, the Company agrees to issue and sell to the Investor, and the Investor agrees to purchase from the Company, free and clear of any Liens, 1,135,955 shares of Class A Common Stock (the “Shares”) at a per share purchase price equal to the lower of (i) $1.78 and (ii) the lowest per share price paid by any Person who acquires shares (or enters into any agreement to acquire shares) of Class A Common Stock, Class C Common Stock (or any other similar shares of voting or non-voting common stock of the Company or equivalent shares of preferred stock of the Company) after the date of this Agreement and prior to, or substantially contemporaneous with, the Closing (the lower of (i) or (ii), the “Per Share Purchase Price”), payable to the Company in immediately available funds at the Closing; provided, however, that the number of shares of Class A Common Stock that the Investor is required to purchase pursuant to this Section 1.1 shall be reduced, if and to the extent necessary to cause the percentage of the Company’s Class A Common Stock held by the Investor as of immediately following the Closing and the closing of the Concurrent Other Transactions (which, for the avoidance of doubt, shall include any shares of the Company’s Class A Common Stock held by the Investor that are not a part of the Shares to be purchased by the Investor pursuant to this Agreement) not to exceed 4.50% of the total number of shares of Class A Common Stock outstanding immediately following the Closing and the closing of the Concurrent Other Transactions.  The aggregate purchase price payable pursuant to this Section 1.1 is referred to herein as the “Purchase Price”).

1.2         Closing; Deliverables for the Closing; Conditions to the Closing.

(a)         Closing.  Unless this Agreement has been terminated pursuant to Article 4, and subject to the satisfaction or, to the extent permitted by Law and this Agreement, the written waiver of the conditions set forth in Section 1.2(c), the closing of the transaction contemplated by this Agreement (the “Closing”) shall take place at the offices of Arnold & Porter LLP, located at 777 South Figueroa Street, 44th Floor, Los Angeles, California 90017, or remotely via the electronic or other exchange of documents and signature pages, at 9:00 a.m. Pacific Time on the second Business Day after the satisfaction or, if permissible, waiver of the conditions set forth in Section 1.2(c) (other than those which by their nature are to be satisfied at Closing, but subject to the satisfaction or waiver of such conditions), or at such other place or such other date as may be agreed to by the Parties (the “Closing Date”).

(b)          Closing Deliverables.  Subject to the satisfaction or permitted waiver of the conditions to the Closing set forth in Section 1.2(c), at the Closing the Parties shall make the following deliveries:

(i)          the Company shall deliver to the Investor one or more certificates evidencing the Shares registered in the name of the Investor (or if the Shares are to be uncertificated, the Company shall deliver appropriate evidence of such registration of the Shares in the name of the Investor);

2

(ii)         the Company shall deliver to the Investor a schedule setting forth the aggregate number of shares of each class of Capital Stock outstanding immediately after giving effect to the Merger Transactions, the Concurrent Other Transactions and the transactions contemplated hereby; and

(iii)      the Investor shall deliver the Purchase Price by wire transfer of immediately available funds to the account specified by the Company for this purpose by notice to the Investor prior to the Closing.

(c)           Closing Conditions.

(i)          The obligations of the Investor, on the one hand, and the Company, on the other hand, to consummate the purchase and sale of the Shares provided for in this Agreement are each subject to the satisfaction or, to the extent permitted by Law and this Agreement, the waiver by the Company or the Investor, as applicable, of the following conditions to the Closing under this Agreement:

(A)     All Governmental Consents required to have been obtained at or prior to the Closing Date in connection with the execution, delivery or performance of this Agreement and the consummation of the transactions contemplated hereby shall have been obtained and shall be in full force and effect.

(B)     The Merger Transactions shall have been consummated in accordance with the Merger Agreement, including the approval of the Merger Agreement by the stockholders of each of the Company and CFB;

(C)       If required under applicable Law or the rules and regulations of the Nasdaq Stock Market, the approval by stockholders of the Company of resolutions providing for the Company’s issuance of the maximum number of shares of Common Stock to be issued under this Agreement and in the Concurrent Other Transactions in accordance with this Agreement, the definitive documentation relating to the Concurrent Other Transactions, and applicable Law and the rules and regulations of the Nasdaq Stock Market (such approval being referred to herein as the “Stockholder Approval”) shall have been obtained;

(D)      No provision of any Law in effect shall prohibit the Closing or shall prohibit or restrict the Investor from owning or voting any Shares to be purchased by the Investor hereunder.

(E)       Approval by the stockholders of the Company to increase in the authorized number of shares of Voting Common Stock (which will become Class A Common Stock upon completion of the Merger) from 50,000,000 shares to 75,000,000 shares, to be effected by the filing of an amended and restated certificate of incorporation of the Company (the “Authorized Shares Increase Approval”), shall have been obtained.

3

(ii)       The obligation of the Investor to consummate the purchase of Shares provided for in this Agreement is also subject to the satisfaction or waiver by the Investor of the following conditions to the Closing:

(A)     (i) The  Company Specified Representations shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date and (ii) the other representations and warranties of the Company set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except, in the case of this clause (ii) only, to the extent that the failure to be true and correct (without regard to any materiality or Material Adverse Effect qualifications contained therein), would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and except, in the case of clauses (i) and (ii), that representations and warranties made as of a specified date shall be true and correct as of such date;

(B)     The Company shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date;

(C)       The Investor shall have received a certificate, dated as of the Closing Date, signed on behalf of the Company by a senior executive officer certifying to the effect that the conditions set forth in Section 1.2(c)(ii)(A), Section 1.2(c)(ii)(B) and Section 1.2(c)(ii)(D) have been satisfied on and as of the Closing Date;

(D)      Since the date of this Agreement, no Material Adverse Effect shall have occurred and no change or other event shall have occurred that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect

(E)        The Company shall have executed and delivered a counterpart signature page to the Investor’s Rights Agreement;

(iii)      The obligation of the Company to consummate the sale of the Shares provided for in this Agreement is also subject to the satisfaction or written waiver by the Company of the following conditions to the Closing:

(A)       The representations and warranties of the Investor set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except to the extent that the failure to be true and correct (without regard to any materiality qualifications contained therein) would not materially adversely affect the ability of the Investor to perform its obligations hereunder and except that (1) representations and warranties made as of a specified date shall be true and correct as of such date and (2) the representations and warranties of the Investor set forth in Sections 2.3(d) and 2.3(f) shall be true and correct in all respects;

(B)       The Investor shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date; and

4

(C)       The Company shall have received a certificate, dated as of the Closing Date, signed on behalf of the Investor by a duly authorized person certifying to the effect that the conditions set forth in Section 1.2(c)(iii)(A) and Section 1.2(c)(iii)(B) have been satisfied on and as of the Closing Date.

ARTICLE 2.

      REPRESENTATIONS AND WARRANTIES

2.1          Certain Terms.

(a)         As used in this Agreement, the term “Material Adverse Effect” means any circumstance, event, change, development or effect that, individually or in the aggregate, would reasonably be expected to (i) result in a material adverse effect on the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole, or (ii) materially impair or delay the ability of the Company or any of the Company Subsidiaries to perform its or their obligations under this Agreement to consummate the Closing or any of the transactions contemplated hereby; provided, however, that in determining whether a Material Adverse Effect has occurred under clause (i), there shall be excluded any circumstance, event, change, development or effect to the extent resulting from (A) actions or omissions of the Company or any Company Subsidiary expressly required or contemplated by the terms of this Agreement, (B) changes after the date hereof in general economic conditions in the United States, including financial market volatility or downturns, or in the markets in which the Company and the Company Subsidiaries operate, (C) changes after the date hereof affecting the banking industry generally, (D) any changes after the date hereof in applicable Laws or accounting rules or principles, including changes in GAAP, (E) changes in the market price or trading volume of the Common Stock or the Company’s other outstanding securities (but not the underlying causes of such changes), (F) any epidemic, pandemic or disease outbreak (including the Covid-19 virus) including any worsening of such conditions; or (G) any failure by the Company or any of the Company Subsidiaries to meet any internal projections or forecasts with regard to the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole (but not the underlying causes of such failure), in each case to the extent that such circumstance, event, change, development or effect referred to in clauses (B), (C), (D) and (F) do not have a disproportionate effect on the Company and the Company Subsidiaries compared to other participants in the industries or markets in which the Company and the Company Subsidiaries operate.

(b)         As used in this Agreement, the term “Previously Disclosed” (i) with regard to any Party, means information set forth in its Disclosure Schedule under Section references corresponding with the provision of this Agreement to which such information relates (including, in the case of the Company, information identified in the Company’s Disclosure Schedule); provided, however, that if such information is disclosed in such a way as to make its relevance or applicability to another provision of this Agreement reasonably apparent on its face, such information shall be deemed to be responsive to such other provision of this Agreement and (ii) with regard to the Company, includes information publicly disclosed by the Company in any reports, schedules, forms, statements and other documents filed or furnished by the Company under the Securities Act and the Exchange Act with the Securities and Exchange Commission (the “SEC”), including pursuant to Section 13(a) or 15(d) thereof, since December 31, 2017, in each case available prior to the date of this Agreement (excluding any risk factor disclosures contained in such documents under the heading “Risk Factors” and any disclosure of risks included in any “forward-looking statements” disclaimer or other statements that are similarly non-specific and are predictive or forward-looking in nature). Notwithstanding anything in this Agreement to the contrary, the mere inclusion of an item in a Disclosure Schedule shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5

2.2         Representations and Warranties of the Company.  Except as Previously Disclosed, the Company hereby represents and warrants to the Investor, as of the date of this Agreement and as of the Closing Date (except for the representations and warranties that are as of a specific date, which are made as of that date) that:

(a)         Organization and Authority.  Each of the Company and the Company Subsidiaries is a corporation or other entity duly organized and validly existing under the laws of the jurisdiction of its incorporation or organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, except where any failure to be so qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and has the corporate or other organizational power and authority to own its properties and assets and to carry on its business as it is now being conducted.  The Company has Previously Disclosed correct and complete copies of the certificate of incorporation and bylaws (or similar governing documents) as amended through the date of this Agreement for the Company and Broadway Federal Bank, f.s.b. (the “Bank”).  The Company is duly registered with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) as a savings and loan holding company under the Savings and Loan Holding Company Act, as amended, 12 U.S.C. 1467a (the “SLHCA Act”).  As of the date hereof, the Company is a certified “community development financial institution” designated as such under the Community Development Banking and Financial Institutions Act of 1994, as amended (12 U.S.C. Sections 5311 et seq.) and its implementing regulations, as applicable (a “CDFI”).  Following the consummation of the Bank Merger, the Surviving Bank will apply to be designated as a CDFI.

(b)         Company Subsidiaries.  As of the date of this Agreement, the Company has Previously Disclosed a true, complete and correct list of each entity in which the Company, directly or indirectly, owns sufficient capital stock or holds a sufficient equity or similar interest such that it is consolidated with the Company in the financial statements of the Company or has the power to elect a majority of the board of directors or other persons performing similar functions (each, a “Company Subsidiary” and, collectively, the “Company Subsidiaries”).

      Except for the Company Subsidiaries, the Company does not own beneficially or control, directly or indirectly, more than 5% of any class of equity securities or similar interests of any corporation, bank, business trust, association or similar
      organization, and, except as Previously Disclosed, is not, directly or indirectly, a partner in any general partnership or party to any joint venture or similar arrangement.  The Company owns, directly or indirectly, all of its interests in each
      Company Subsidiary free and clear of any and all Liens.  No equity security of any Company Subsidiary is or may be required to be issued by reason of any option, warrant, scrip, preemptive right, right to subscribe to, gross-up right, call or
      commitment of any character whatsoever relating to, or security or right convertible into, shares of any capital stock or other interest of such Company Subsidiary, and there are no contracts, commitments, understandings or arrangements by which
      any Company Subsidiary is bound to issue additional shares of its capital stock or other interest, or any option, warrant or right to purchase or acquire any additional shares of its capital stock.  The deposit accounts of the Bank are insured by
      the Federal Deposit Insurance Corporation \(“FDIC”\) to the fullest extent permitted by the Federal Deposit Insurance Act, as amended, and the rules and regulations of the FDIC thereunder, and all
      premiums and assessments required to be paid in connection therewith have been paid when due \(after giving effect to any applicable extensions\). The Company beneficially owns all of the outstanding capital securities of, and has sole control of,
      the Bank.

6

(c)          Capitalization.

(i)          Except as set forth on the Disclosure Schedule, as of the date hereof, the authorized Capital Stock of the Company consists of 50,000,000 shares of Voting Common Stock, par value $0.01 per share (“Voting Common Stock”), 25,000,000 shares of Non-Voting Common Stock, par value $0.01 (“Non-Voting Common Stock”), and 1,000,000 shares of preferred stock, par value $0.01 (“Preferred Stock”).

(ii)        As of the date hereof, before giving effect to the transaction provided for herein, the Merger Transactions and the Concurrent Other Transactions the Company has issued and outstanding: (i) 19,281,758 of shares of Voting Common Stock, including 556,169 shares of Voting Common Stock granted in respect of outstanding restricted stock awards, (ii) 1,637,902 shares of Voting Common Stock held by the trust for the Broadway Federal Bank, f.s.b. Employee Stock Ownership Plan, (iii) 8,756,396 shares of Non-Voting Common Stock and (iv) no shares of Preferred Stock.  Schedule 2.2(c)(ii) of the Company’s Disclosure Schedule sets forth the pro forma shares of each class of Capital Stock of the Company as of the date hereof, after giving effect to the transaction provided for herein, the Merger and the Concurrent Other Transactions.

(iii)       As of the date hereof, other than in respect of awards outstanding under or issuable pursuant to the Company’s 2008 Long-Term Incentive Plan (the “Company

          Stock Plan”\) consisting of options to purchase an aggregate of 450,000 shares of common stock, and except in connection with this Agreement and the transactions contemplated hereby, the Merger Agreement and the Concurrent Other
      Transactions, the Company has not \(A\) agreed to issue or authorized the issuance after the date hereof of any shares of Common Stock or Preferred Stock, or any securities convertible into or exchangeable or exercisable for shares of Common Stock
      or Preferred Stock, \(B\) reserved for issuance any shares of Capital Stock of the Company or \(C\) repurchased or redeemed, or agreed to or authorized the repurchase or redemption of, any shares of Capital Stock of the Company.

(iv)        All of the issued and outstanding shares of Capital Stock of the Company have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, except for the preemptive rights granted to certain institutional stockholders of the Company identified on Schedule 2.2(c)(iv) of the Company’s Disclosure Schedule.  None of the outstanding shares of Capital Stock or other securities of the Company or any of the Company Subsidiaries was issued, sold or offered by the Company or any Company Subsidiary in violation of the Securities Act of 1933, as amended (the “Securities Act”) or the securities or blue sky laws of any state or jurisdiction, or in violation of any agreement, arrangement or commitment to which the Company was or is a party or subject, or in violation of any preemptive or similar rights of any Person.  No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which the stockholders of the Company may vote (“Voting Debt”) are issued and outstanding.

7

(v)        As of the date of this Agreement, except for the outstanding awards under the Company Stock Plan, the Company does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of, or securities or rights convertible into or exchangeable or exercisable for, any shares of Capital Stock or Voting Debt of the Company.

(d)          Authorization; No Conflicts.

(i)        The Company has the corporate power and authority to execute and deliver the Transaction Agreements and to perform its obligations hereunder and thereunder.  The Board of Directors has approved the transactions contemplated by the Transaction Agreements.  This Agreement has been, and the Investor’s Rights Agreement will be, when executed and delivered by the Company, duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery by the Investor, is, and the Investor’s Rights Agreement will be, the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles (whether applied in equity or at law).

(ii)        Neither the execution and delivery by the Company of the Transaction Agreements nor the consummation of the transactions contemplated hereby and thereby, nor compliance by the Company with any of the provisions hereof, will, with or without the passage of time and giving of notice, (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any liens, charges, adverse rights or claims, pledges, covenants, title defects, security interests or other encumbrances of any kind (“Liens”)

      upon any of the properties or assets of the Company or any Company Subsidiary, under any of the terms, conditions or provisions of \(1\) the certificate of incorporation or bylaws \(or similar governing documents\) of the Company and each Company
      Subsidiary or \(2\) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any of the Company Subsidiaries is a party or by which it may be bound, or to which the
      Company or any of the Company Subsidiaries, or any of the properties or assets of the Company or any of the Company Subsidiaries may be subject, or \(B\) violate any Law applicable to the Company or any of the Company Subsidiaries or any of their
      respective properties or assets except in the case of clauses \(A\)\(2\) and \(B\) for such violations, conflicts and breaches as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

8

(e)         Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of this Agreement or for the sale by the Company of Common Stock to the Investor pursuant to this Agreement.

(f)          Litigation and Other Proceedings.  Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, or as would not reasonably be expected to adversely impact the reputation of the Company, the Company Subsidiaries or their respective investors in any material respect, there is no pending or, to the Knowledge of the Company, threatened claim, action, suit, arbitration, complaint, charge or investigation or proceeding (each an “Action”) against the Company or any Company Subsidiary or any of their respective assets, rights or properties, nor is the Company or any Company Subsidiary a party or named as subject to the provisions of any order, writ, injunction, settlement, judgment or decree of any court, arbitrator or government agency, or instrumentality.  There has not been, and to the Knowledge of the Company, there is not pending or contemplated, any investigation or other Action by the SEC involving the Company or any current or former director or officer of the Company in his or her capacity as such.

(g)       Financial Statements.  The audited consolidated balance sheets of the Company and the Company Subsidiaries and the related consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2019 and the unaudited consolidated balance sheets of the Company and the Company Subsidiaries and the related unaudited consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s quarterly reports on Form 10-Q filed with the SEC for the quarterly period ending September 30, 2020 (the “Company Financial Statements”) (i) have been prepared from, and are in accordance with, the books and records of the Company and the Company Subsidiaries, (ii) complied, as of the date of such filing, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, (iii) have been prepared in accordance with GAAP applied on a consistent basis and (iv) present fairly in all material respects the consolidated financial position of the Company and the Company Subsidiaries at the dates and the consolidated results of operations, changes in stockholders’ equity and cash flows of the Company and the Company Subsidiaries for the periods stated therein.

(h)        Reports.  Since December 31, 2017, the Company and each Company Subsidiary have filed all material reports, registrations, documents, filings, statements and submissions, together with any required amendments thereto, that they were required to file with any Governmental Entity, including all those required under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof (the foregoing, collectively, being referred to herein as the “Company Reports”) and have paid all material fees and assessments due and payable in connection therewith.  As of their respective filing dates, or as subsequently amended prior to the date hereof, the Company Reports complied in all material respects with all statutes and applicable rules and regulations of the applicable Governmental Entities.  As of the date of this Agreement, there are no outstanding comments from the SEC or any other Governmental Entity with respect to any Company Report that were the subject of written correspondence that have not been resolved.  The Company Reports, including the documents incorporated by reference in each of them, each contained all the information required to be included in it and, when it was filed and, as of the date of each such Company Report filed with the SEC, or if amended prior to the date of this Agreement, as of the date of such amendment, did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in it, in light of the circumstances under which they were made, not misleading and complied as to form in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  No executive officer of the Company has failed in any respect to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002.

9

(i)           Internal Accounting and Disclosure Controls.  The records, systems, controls, data and information of the Company and the Company Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of the Company or the Company Subsidiaries (including all means of access thereto and therefrom) or reputable banking industry service providers, except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have an adverse effect on the system of internal accounting controls described below in this Section 2.2(i).  The Company (i) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) intended to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known to the chief executive officer and the chief financial officer of the Company by others within those entities, and (ii) has disclosed, based on its most recent evaluation prior to the date of this Agreement, to the Company’s outside auditors and the audit committee of the Board of Directors (A) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information, and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.  As of the date of this Agreement, the Company has no Knowledge of any reason that its outside auditors and its chief executive and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when due.  Since December 31, 2017, neither the Company nor any Company Subsidiary nor, to the Knowledge of the Company, any director, officer, employee, auditor, accountant or representative of the Company or any Company Subsidiary has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any Company Subsidiary or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any Company Subsidiary has engaged in questionable accounting or auditing practices.

(j)           Data Privacy.

10

(i)          The Company and the Company Subsidiaries have taken reasonable steps consistent with customary industry practices to protect the confidentiality, integrity, availability and security of the computers, servers, workstations, routers, hubs, switches, circuits, networks and other information technology equipment owned or controlled by them or by any third party and material to the Company and the Company Subsidiaries (the “Company IT Assets”) (and all information and transactions stored or contained therein or transmitted thereby) against any unauthorized use, access, interruption, modification or corruption, and there has been no unauthorized use, access, interruption, modification or corruption of the Company IT Assets.

(ii)       In connection with their receipt, purchase, collection, securing, safeguarding, storage, transfer (including any transfer across national borders), disclosure, destruction/disposal, and/or use or other processing of any Personal Information, each of the Company and the Company Subsidiaries, is and has been, in material compliance with all Privacy Laws, their respective privacy policies and the requirements of any contract or codes of conduct to which any of the Company or the Company Subsidiaries is a party.  The privacy policies of the Company are customary for the industry in which the Company operates.  The Company and the Company Subsidiaries have commercially reasonable and appropriate physical, technical, organizational, and administrative security measures and policies in place designed to protect all Personal Information collected by them or on their behalf from and against unauthorized access, use, interruption, modification, corruption, and/or disclosure.  The Company and the Company Subsidiaries have binding written agreements obligating (in accordance with and as required by Privacy Laws (as applicable)) all third parties collecting, accessing, receiving, storing or processing Personal Information on behalf of the Company and the Company Subsidiaries to (i) comply with all applicable Privacy Laws, (ii) take commercially reasonable and appropriate steps to protect and secure such Personal Information from and against unauthorized access, use interruption, modification, corruption, and/or disclosure which are no less stringent than those applied by the Company and the Company Subsidiaries and (iii) promptly notify the Company and the Company Subsidiaries of any unauthorized access, use interruption, modification, corruption, and/or disclosure of Personal Information or Company IT Assets processing Personal Information.  The Company and the Company Subsidiaries are, and since December 31, 2017, have been, in compliance in all material respects with all Privacy Laws and any other applicable Laws in all relevant jurisdictions relating to data loss, theft and breach of security notification obligations.  Since December 31, 2017, none of the Company or any of the Company Subsidiaries has experienced a material breach of its information technology systems or a data loss or theft as defined by the Laws in all relevant jurisdictions.  None of the Company or any of the Company Subsidiaries has been charged with, or received any notice of any claims of, the violation in any material respect of any Privacy Laws or any of their respective privacy policies.  The consummation of the transactions contemplated hereby will not breach or otherwise cause any violation of any Privacy Law.

(iii)        For the purposes of this Section 2.2(j):

(1)       “Personal Information” means, in addition to any definition provided by applicable law or by the Company and the Company Subsidiaries in any of their respective privacy policies, contracts, or other public-facing statements for any similar term (e.g., “personally identifiable information” or “PII”), all information identifying, regarding or capable of being associated with an individual person or device.  Personal Information may relate to any individual, including a current, prospective or former client (or a client’s customer or end user) or employee of any Person, and includes information in any form, including paper, electronic and other forms.

11

(2)        “Privacy Laws” means all applicable laws, legal requirements, and self-regulatory guidelines and principles relating to privacy, data security, and Personal Information and similar applicable consumer protection laws, including with respect to the receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security, disposal, destruction, disclosure or transfer of Personal Information and any and all applicable laws governing breach notification in connection with Personal Information.  As used in this Agreement, “Privacy Laws” shall include the California Consumer Privacy Act, General Data Protection Regulation and the rules and regulations promulgated thereunder, and applicable state laws.

(k)         No Undisclosed Liabilities.  There are no liabilities of the Company or any of the Company Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, except for (i) liabilities adequately reflected or reserved against in accordance with GAAP in the Company’s audited balance sheet as of December 31, 2019 and (ii) liabilities that have arisen in the ordinary and usual course of business and consistent with past practice since December 31, 2019 and that have not or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(l)        Mortgage Lending.  The Company and each of the Company Subsidiaries have complied in all material respects with, and all documentation in connection with the origination, processing, underwriting and credit approval of any mortgage loan originated, purchased or serviced by the Company or any Company Subsidiary has satisfied, in all material respects (i) all Laws with respect to the origination, insuring, purchase, sale, servicing, or filing of claims in connection with mortgage loans, including all Laws relating to real estate settlement procedures, consumer credit protection, truth in lending laws, usury limitations, fair housing, transfers of servicing, collection practices, equal credit opportunity and adjustable rate mortgages, (ii) the responsibilities and obligations relating to mortgage loans set forth in any agreement between the Company and any Agency, Loan Investor or Insurer, (iii) the applicable rules, regulations, guidelines, handbooks and other requirements of any Agency, Loan Investor or Insurer and (iv) the terms and provisions of any mortgage or other collateral documents and other loan documents with respect to each mortgage loan.

(m)       Bank Secrecy Act; Anti-Money Laundering; OFAC; and Customer Information.  The Company is not aware of, has not been advised of, and, to the Knowledge of the Company, has no reason to believe that any facts or circumstances exist that would cause it or any Company Subsidiary to be deemed to be not operating in compliance, in all material respects, with the Bank Secrecy Act of 1970, as amended, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (also known as the USA PATRIOT Act), any order or regulation issued by the Treasury’s Office of Foreign Assets Control (“OFAC”), or any other applicable anti-money laundering or anti-terrorist-financing statute, rule or regulation.  The Company is not aware of any facts or circumstances that would cause it to believe that any nonpublic customer information has been disclosed to or accessed by an unauthorized third party in a manner that would cause it to undertake any material remedial action.  The Company and each of the Company Subsidiaries have adopted and implemented an anti-money laundering program that contains adequate and appropriate customer identification verification procedures that comply with the USA PATRIOT Act and such anti-money laundering program meets the requirements in all material respects of Section 352 of the USA PATRIOT Act and the regulations thereunder, and they have complied in all respects with any requirements to file reports and other necessary documents as required by the USA PATRIOT Act and the regulations thereunder.  The Company will not directly or indirectly use the proceeds of the sale of the Common Stock pursuant to transactions contemplated by this Agreement, or lend, contribute or otherwise make available such proceeds to any Company Subsidiary, joint venture partner or other Person, towards any sales or operations in any country appearing on the OFAC Specially Designated Nationals List (“SDN List”) or for the purpose of financing the activities of any Person currently appearing on the SDN List.

12

(n)          Certain Payments.  Neither the Company nor any of the Company Subsidiaries, nor any directors, officers, nor to the Knowledge of the Company, employees or any of their Affiliates or any other Person who to the Knowledge of the Company is associated with or acting on behalf of the Company or any of the Company Subsidiaries has directly or indirectly (i) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment in material violation of any Law, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable anti-bribery or anti-corruption laws, to any Person, private or public, regardless of form, whether in money, property, or services (A) to obtain favorable treatment in securing business for the Company or any of the Company Subsidiaries, (B) to pay for favorable treatment for business secured by the Company or any of the Company Subsidiaries, or (C) to obtain special concessions or for special concessions already obtained, for or in respect of the Company or any of the Company Subsidiaries or (ii) established or maintained any fund or asset with respect to the Company or any of the Company Subsidiaries that was required by Law or GAAP to have been recorded and was not recorded in the books and records of the Company or any of the Company Subsidiaries.  Neither the Company nor any Company Subsidiaries has conducted any internal investigation, made any voluntary, directed, or involuntary disclosure to any Governmental Entity, or received any audit report, written communication from a Governmental Entity, or whistleblower or other written complaint, involving alleged violations in any material respect of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable anti-bribery or anti-corruption laws on the part of the Company, any of the Company Subsidiaries, or any Person acting on behalf of the Company or any of the Company Subsidiaries.

(o)         Absence of Certain Changes.  Since December 31, 2019 and except as Previously Disclosed or as required or contemplated by the terms of this Agreement, (i) the Company and the Company Subsidiaries have conducted their respective businesses in all material respects in the ordinary and usual course of business consistent with past practices, (ii) through (and including) the date of this Agreement, no fact, event, change, condition, development, circumstance or effect has occurred that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (iii) no material default (or event which, with notice or lapse of time, or both, would constitute a material default) exists on the part of the Company or any Company Subsidiary in the due performance and observance of any term, covenant or condition of any agreement to which the Company or any Company Subsidiary is a party and which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

13

(p)          Compliance with Laws.

(i)          The Company, each Company Subsidiary and each of their officers, agents, representatives and employees possesses, holds and have all material permits, licenses, franchises, authorizations, orders, consents, registrations, accreditations and approvals of, and have made all filings, applications and registrations with, Governmental Entities that are required in order to permit the Company and each Company Subsidiary to own or lease their properties and assets and to carry on their business as presently conducted and that are material to the business of the Company and each Company Subsidiary (collectively, the “Governmental

          Authorizations”\).  The Company and the Company Subsidiaries, and to the Company’s Knowledge, their respective officers, agents, representatives and employees, are not in default under any of such Governmental Authorizations, which
      default\(s\) would be, or be reasonably expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries \(taken as a whole\).  The Company and each Company Subsidiary have complied with and \(A\) are not, and
      since December 31, 2017, have not been, in default or violation in any respect of, \(B\) are not under investigation with respect to, and \(C\) have not been threatened to be charged with or given notice of any material violation of, any applicable
      material domestic \(federal, state or local\) or foreign law, statute, ordinance, license, rule, regulation, policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental Entity \(each, a “Law”\), other than such noncompliance, defaults or violations as would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries \(taken as a whole\).  No
      Governmental Entity has placed any material restriction on the business or properties of the Company or any of the Company Subsidiaries.  As of the date hereof, the Bank has a Community Reinvestment Act rating of “outstanding.”

(ii)         Except for normal examinations conducted by a Governmental Entity in the ordinary course of business of the Company and the Company Subsidiaries, (A) no Governmental Entity has initiated or has pending any proceeding or, to the Knowledge of the Company, investigation into the business or operations of the Company or any of the Company Subsidiaries since December 31, 2017, (B) there is no unresolved violation or exception by any Governmental Entity with respect to any report or statement relating to any examinations or inspections of the Company or any of the Company Subsidiaries, and (C) there have been no formal or informal inquiries by, or disagreements or disputes with, any Governmental Entity with respect to the business, operations, policies or procedures of the Company or any of the Company Subsidiaries since December 31, 2017, in each case of clauses (A) through (C), which would reasonably be expected, individually or in the aggregate, to be material to the Company and the Company Subsidiaries (taken as a whole).

(iii)        The Company and the Company Subsidiaries are not, and since December 31, 2017, have not been, in violation or default of any provisions of their respective certification of incorporation or bylaws (or similar governing documents).

14

(q)         Adequate Capitalization.  As of September 30, 2020, the Bank met or exceeded the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.  As of the Closing and after giving effect to this Agreement, the transactions contemplated hereby and the Concurrent Transactions, the Bank meets or exceeds the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.

(r)         Agreements with Regulatory Agencies.  The Company and the Company Subsidiaries (A) are not subject to any cease-and-desist or other similar order or enforcement action issued by, (B) are not a party to any written agreement, consent agreement or memorandum of understanding with, (C) are not a party to any commitment letter or similar undertaking to, and (D) are not subject to any capital directive by, and since December 31, 2019, neither the Company nor any of the Company Subsidiaries has adopted any board resolutions at the request of any Governmental Entity that currently restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its liquidity and funding policies and practices, its ability to pay dividends, its credit, risk management or compliance policies, its internal controls, its management or its operations or business, nor has the Company nor any of the Company Subsidiaries been advised since December 31, 2019 by any Governmental Entity that it is considering issuing, initiating, ordering, or requesting any of the same.

(s)          Insurance.  The Company and each of the Company Subsidiaries are presently insured, and have been insured for at least the past two years, for reasonable amounts with financially sound and reputable insurance companies against such risks as companies engaged in a similar business would, in accordance with good business practice, customarily be insured.  All of the policies, bonds and other arrangements providing for the foregoing (the “Company Insurance Policies”) are in full force and effect, the premiums due and payable thereon have been or will be timely paid through the Closing Date, and there is no material breach or default (and no condition exists or event has occurred that, with the giving of notice or lapse of time or both, would constitute such a material breach or default) by the Company or any of the Company Subsidiaries under any of the Company Insurance Policies or, to the Knowledge of the Company, by any other party to the Company Insurance Policies.  Neither the Company nor any of the Company Subsidiaries has received any written notice of cancellation or non-renewal of any Company Insurance Policy nor, to the Knowledge of the Company, is the termination of any such policies threatened in writing by the insurer, and there is no material claim for coverage by the Company, or any of the Company Subsidiaries, pending under any of such Company Insurance Policies as to which coverage has been denied or disputed by the underwriters of such Company Insurance Policies or in respect of which such underwriters have reserved their rights.

(t)           Title.  The Company and the Company Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and valid title to all material personal property owned by them, in each case free and clear of all Liens, except for Liens which do not materially affect the value of such property or do not interfere with the use made and proposed to be made of such property by the Company or any Company Subsidiary.  Any real property and facilities held under lease by the Company or the Company Subsidiaries are leased pursuant to valid, subsisting and enforceable leases with such exceptions that are not material and do not interfere with the use made and proposed to be made of such property and facilities by the Company or the Company Subsidiaries.

15

(u)         Intellectual Property.  The Company and the Company Subsidiaries own or possess adequate rights or licenses to use all trademarks, service marks and all applications and registrations therefor, trade names, patents, patent rights, copyrights, original works of authorship, inventions, trade secrets and other intellectual property rights (collectively, “Intellectual Property Rights”) used in their businesses as conducted on the date of this Agreement, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  To the Knowledge of the Company, no product or service of the Company or the Company Subsidiaries infringes the Intellectual Property Rights of others.

(v)          Employee Benefits.

(i)        Section 2.2(v) of the Disclosure Schedule sets forth a correct and complete list of each “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including, without limitation, multiemployer plans within the meaning of Section 3(37) of ERISA), and all stock purchase, stock option, severance, employment, change-in-control, fringe benefit, bonus, incentive, deferred compensation and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transactions contemplated by this Agreement or otherwise), whether formal or informal, oral or written, under which (A) any current or former employee or director of the Company or any of the Company Subsidiaries (the “Company Employees”) has any present or future right to benefits and which are contributed to, sponsored by or maintained by the Company or any of the Company Subsidiaries or (B) the Company or any Company Subsidiary has had or has any present or future liability. All such plans, agreements, programs, policies and arrangements are collectively referred herein to as the “Benefit

          Plans.”

(ii)       (A) Each Benefit Plan has been established and administered in all material respects in accordance with its terms, and in compliance with the applicable provisions of ERISA, the Code and other Laws; (B) no “reportable event” (as such term is defined in Section 4043 of ERISA) that could reasonably be expected to result in material liability has occurred with respect to any Benefit Plan, and (C) no non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) has been engaged in by the Company or any Company Subsidiary with respect to any Benefit Plan that has or is expected to result in any material liability or “accumulated funding deficiency” (as such term is defined in Section 302 of ERISA and Section 412 of the Code (whether or not waived)).

(iii)       The Company and the Company Subsidiaries will be in compliance, as of the Closing Date, with Sections 111 and 302 of the Emergency Economic Stabilization Act of 2008, as amended by the U.S. American Recovery and Reinvestment Act of 2009, including all guidance issued thereunder by a Governmental Entity (collectively “EESA”).

16

(iv)      None of the Company or any Company Subsidiary or any trade or business, whether or not incorporated (an “ERISA Affiliate”), all of which together with the Company or any Company Subsidiary would be deemed a “single employer” within the meaning of Section 4001 of ERISA, has, at any time during the last six years, contributed to or been obligated to contribute to any plan that is (i) subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code or (ii) a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA (a “Multiemployer Plan”) or a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA; and none of Company and the Company Subsidiaries nor any of their respective ERISA Affiliates has incurred any liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as those terms are defined in Part I of Subtitle E of Title IV of ERISA.

(v)        Neither the Company nor any Company Subsidiary has any material unfunded liabilities existing under or in connection with any Benefit Plan, and each such Benefit Plan has been established and administered in all respects in accordance with its terms, and in compliance with applicable law, except where failure to be in compliance would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.

(vi)       Neither the execution of the Transaction Agreements nor the consummation of the transactions contemplated hereby and thereby could (either alone or in conjunction with any other event) reasonably be expected to result in, cause the accelerated vesting, funding or delivery of, or increase the amount or value of, any payment or benefit to any employee, officer or director of the Company or any Company Subsidiary.

(w)        Taxes.  All material Tax Returns required to be filed by, or on behalf of, the Company or the Company Subsidiaries have been timely filed, or will be timely filed, in accordance with all Laws, and all such Tax Returns are, or will be at the time of filing, complete and correct in all material respects.  The Company and the Company Subsidiaries have timely paid all material Taxes due and payable (whether or not shown on such Tax Returns), or, where payment is not yet due, have made adequate financial statement provisions therefor in accordance with GAAP.  Neither the Company nor any of the Company subsidiaries has participated in any “listed transactions” within the meaning of Treasury Regulations Section 1.6011-4.  There are no Liens with respect to Taxes upon any of the assets or properties of either the Company or the Company Subsidiaries other than with respect to Taxes not yet due and payable.  As of the date of this Agreement, there are not pending or threatened in writing, any audits, examinations, investigations or other proceedings initiated by the Internal Revenue Service in respect of U.S. federal income tax matters.  None of the Company or any of the Company Subsidiaries has been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the date hereof that was purported or intended to be governed by Section 355 of the Code (or any similar provision of state, local or foreign Law).  The Company and each Company Subsidiary is, and has been since the date of its formation, a corporation for U.S. federal income tax purposes, and neither the Company nor any Company Subsidiary has elected pursuant to the Code to be treated as a Subchapter S corporation pursuant to Section 1362(a) of the Code, nor has it made any other elections pursuant to the Code (other than elections that relate solely to methods of accounting, depreciation or amortization) that would have, or be reasonably expected to result in, individually or in the aggregate, a Material Adverse Effect.

17

(x)          Labor.

(i)       Employees of the Company and the Company Subsidiaries are not represented by any labor union nor are any collective bargaining agreements otherwise in effect with respect to such employees.  No labor organization or group of employees of the Company or any Company Subsidiary has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions presently pending or threatened to be brought or filed with the National Labor Relations Board or any other labor relations tribunal or authority, nor have there been in the last three years.  There are no strikes, work stoppages, slowdowns, labor picketing lockouts, material arbitrations or material grievances, or other material labor disputes pending or, to the Knowledge of the Company, threatened against or involving the Company or any Company Subsidiary, nor have there been any in the past year.

(ii)         Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company and the Company Subsidiaries are in compliance with all federal and state Laws and requirements respecting employment and employment practices, terms and conditions of employment, collective bargaining, disability, immigration, health and safety, wages, hours and benefits, non-discrimination in employment, workers’ compensation and the collection and payment of withholding and/or payroll taxes and similar taxes.

(iii)      There is no charge or complaint pending or threatened before any Governmental Entity alleging unlawful discrimination in employment practices, unfair labor practices or other unlawful employment practices by the Company or any Company Subsidiary.

(iv)        To the Knowledge of the Company, since December 31, 2017, (i) no allegations of sexual harassment or misconduct have been made against (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000 and (ii) neither the Company nor any of the Company Subsidiaries has entered into any settlement agreements related to allegations of sexual harassment or misconduct by (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000.

(y)         Brokers and Finders.  Except as Previously Disclosed, neither the Company nor any of its officers, directors, employees or agents has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Company in connection with this Agreement or the transactions contemplated hereby.

(z)          Offering of Securities.

(i)         Neither the Company nor any Person acting on its behalf has taken any action (including any offering of any securities of the Company under circumstances which would require the integration of such offering with the offering of any of the Shares to be issued pursuant to this Agreement under the Securities Act and the rules and regulations of the SEC promulgated thereunder) which would subject the offering, issuance or sale of any of the Shares to be issued pursuant to this Agreement to be subject to the registration requirements of the Securities Act.  Neither the Company nor any Person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Shares pursuant to the transactions contemplated by this Agreement.  Assuming the accuracy of the Investor’s representations and warranties set forth in this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investor.

18

(ii)         The Company is not disqualified from relying on Rule 506 of Regulation D (“Rule 506”) under the Securities Act for any of the reasons stated in Rule 506(d) (each such reason, a “Disqualification Event”) in connection with the issuance and sale of the Shares to the Investor.  The Company has furnished the Investor, a reasonable time prior to the date hereof, a description in writing of any matters that would have triggered disqualification under Rule 506(d) but which occurred before September 23, 2013, in each case, in compliance with the disclosure requirements of Rule 506(e).

(aa)      Affiliate Transactions.  No officer, director, five percent (5%) stockholder or other Affiliate of the Company (or any Company Subsidiary), or any individual who, to the Knowledge of the Company, is related by marriage or adoption to or shares the same home as any such Person, or any entity which, to the Knowledge of the Company, is controlled by any such Person (collectively, an “Insider”), is a party to any contract or transaction with the Company (or any Company Subsidiary) which pertains to the business of the Company (or any Company Subsidiary) or has any interest in any property, real or personal or mixed, tangible or intangible, used in or pertaining to the business of the Company or any Company Subsidiary.  The foregoing representation and warranty does not include deposit accounts of an Insider at the Company or any Company Subsidiary or loans of $250,000 or less made in the ordinary course of business to Insiders in compliance with Regulation O and other applicable Law.

(bb)        Private Placement.  Assuming the accuracy of the Investor’s representations and warranties set forth in Section 2.3 of this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investor.  Assuming the Stockholder Approval is obtained (if required), the issuance and sale of the Shares hereunder does not contravene the rules and regulations of the Nasdaq Stock Market.

(cc)        Listing and Maintenance Requirements.  The Company’s Voting Common Stock is (and at the Closing, the Class A Common Stock will be) registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to terminate the registration of the Voting Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received written notice from the Nasdaq Stock Market to the effect that the Company is not in compliance with the listing or maintenance requirements of the Nasdaq Stock Market.

(dd)        Investment Company.  Neither the Company nor any of the Company Subsidiaries is required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

19

(ee)        Acknowledgment Regarding the Investor’s Purchase of Shares.  The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby.  The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions and any advice given by the Investor or any of its representatives or agents in connection with this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions is merely incidental to Investor’s purchase of the Shares.

(ff)         No General Solicitation or General Advertising.  Neither the Company nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Shares.

(gg)        Shell Company Status.  The Company is not, and has never been, an issuer identified in Rule 144(i)(1) under the Securities Act.

(hh)        Valid Issuance of Shares.  The Shares sold and delivered in accordance with the terms hereof for the consideration expressed herein will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws.  Assuming the accuracy of the representations and warranties of the Investor set forth in Section 2.3, the Shares will be issued in compliance with all applicable federal and state securities laws.

(ii)        No Reliance.  The Company has not relied on any representation or warranty in connection with the Investment other than those contained in this Agreement.

2.3         Representations and Warranties of the Investor.   Except as Previously Disclosed, the Investor hereby represents and warrants to the Company, as of the date hereof and as of the Closing Date (except for the representations and warranties that are as of a specific date which are made as of that date) that:

(a)          Organization and Authority.  The Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and where failure to be so qualified would be reasonably expected to materially and adversely impair or delay its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

(b)          Authorization; No Conflicts.

(i)       The Investor has the necessary power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by its board of directors, general partner or managing members, investment committee, investment adviser or other authorized person, as the case may be, and no further approval or authorization by any of its stockholders, partners or other equity owners, as the case may be, is required.  This Agreement has been duly and validly executed and delivered by the Investor and, assuming due authorization, execution and delivery by the Company is the valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

20

(ii)        Neither the execution, delivery and performance by the Investor of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by the Investor with any of the provisions hereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any Liens upon any of the properties or assets of the Investor under any of the terms, conditions or provisions of (1) its articles of incorporation or bylaws, its certificate of limited partnership or partnership agreement or its similar governing documents or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Investor is a party or by which the Investor may be bound, or to which the Investor or any of the properties or assets of the Investor may be subject, or (B) violate any Law applicable to the Investor or any of its properties or assets, except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to materially adversely affect the Investor’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

(c)          Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of this Agreement or for the purchase by the Investor of the Shares pursuant to this Agreement.

(d)         Purchase for Investment; Accredited Investor Status; Pre-Existing Relationship.  The Investor acknowledges that the Shares to be purchased by the Investor pursuant to this Agreement have not been registered under the Securities Act or under any state securities laws and may not be resold or transferred by the Investor without such registration or appropriate reliance on any available exemption from such requirements.  The Investor (i) is acquiring the Shares pursuant to an exemption from the registration requirements of the Securities Act and other applicable securities laws solely for investment with no present intention to distribute any of the Shares to any Person, (ii) will not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, (iii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Shares and of making an informed investment decision and (iv) is an “accredited investor” (as that term is defined by Rule 501 under the Securities Act), (vi) is aware that the Company has entered into the Merger Agreement pursuant to which it is required to file with the SEC a Registration Statement on Form S-4 (the “Registration Statement”), and (vi) began discussions regarding the potential for the Investment by this Agreement with representatives of the Company before the Registration Statement was filed with the SEC and Investor’s purchase of the Shares was not solicited by the Registration Statement or any other filing made by the Company with the SEC.

21

(e)          Brokers and Finders.  Neither the Investor, nor its Affiliates nor any of their respective officers or directors, has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Investor in connection with this Agreement or the transactions contemplated hereby.

(f)          Access to Information.  The Investor acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and the Company Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the Investment; and (iv) the opportunity to ask questions of management of the Company.

(g)        No Reliance.  The Investor has not relied on any representation or warranty made by any Person by or on behalf of the Company, including, without limitation, the Placement Agents, in connection with the Investment other than those contained in this Agreement.

(h)          Placement Agents.  The Investor acknowledges that the Placement Agents have not performed any due diligence review on behalf of the Investor.  Furthermore, the Investor will purchase the Shares directly from the Company and not from the Placement Agents and understands that neither the Placement Agents nor any other broker or dealer has any obligation to make a market in the Common Stock.

(i)          Accuracy of Representations.  The Investor understands that each of the Placement Agents and the Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements in connection with the transactions contemplated by this Agreement and agrees that if any of the representations or acknowledgements made by it are no longer accurate as of the Closing Date, or if any of the agreements made by it are breached on or prior to the Closing Date, it shall promptly notify the Placement Agents and the Company.

ARTICLE 3.

      COVENANTS

3.1        Conduct of Business Prior to Closing.  Except as otherwise expressly required or contemplated by this Agreement or applicable Law, or with the prior written consent of the Investor, between the date of this Agreement and the Closing, the Company shall, and the Company shall cause each Company Subsidiary to:

22

(a)           use commercially reasonable efforts to conduct its business only in the ordinary course of business consistent with past practice; and

(b)         use commercially reasonable efforts to (i) preserve the present business operations, organization (including officers and employees) and goodwill of the Company and any Company Subsidiary and (ii) preserve business relationships with customers, suppliers, consultants and others having business dealings with the Company; provided, however, that nothing in this clause (b) shall place any limit on the ability of the Board of Directors to act in accordance with, or require any actions that the Board of Directors may, in good faith, determine to be inconsistent with, its duties or the Company’s obligations under applicable Law or imposed by any Governmental Entity.

3.2         Use of Proceeds.

      The proceeds received by the Company from the sale of the Shares contemplated hereunder \(net of any applicable costs and expenses\) will be used in a manner consistent in all material respects with the capital
      deployment plan provided by the Company to the Investor prior to the execution of this Agreement; provided that the Company shall not use such proceeds to repurchase or redeem any Capital Stock held by other existing shareholders of the Company
      or any Company Subsidiary.

3.3       Regulatory Filings.  The Company shall make all filings pursuant to any applicable state securities laws and Regulation D of the Securities Act that are required to be made in connection with the Closing.

3.4         Confidentiality.

      The Investor acknowledges that the information being provided to it in connection with the transactions contemplated hereby includes confidential information that has not been publicly disclosed and agrees to maintain the confidentiality of the
      information with the same degree of care that it uses to protect its own confidential information.

3.5         Publicity.  The Company shall not publicly disclose the financial or other terms of the transactions contemplated hereby or the name of any Investor or any Affiliate or investment adviser of any Investor, or include the name of any Investor or any Affiliate or investment adviser of any Investor in any press release or filing with the SEC or the Nasdaq Stock Market and shall not use any names, trademarks, service marks or trade names of the Investor or its Affiliates in any form of advertising and publicity or public statements, without the prior written consent of such Investor, except (i) as required by federal securities law in connection with the filing of final transaction documents with the SEC or (ii) to the extent such disclosure is required by applicable law, at the request of the staff of the SEC or at the request of the Nasdaq Stock Market regulations, in which case the Company shall provide each such Investor with prior written notice of such disclosure and the form of such disclosure shall be subject to the approval of such Investor, such approval not to be unreasonably withheld or delayed.

23

3.6         Commercially Reasonable Efforts.  Upon the terms and subject to the conditions herein provided, except as otherwise provided in this Agreement, each of the Parties hereto agrees to use its commercially reasonable efforts to take or cause to be taken all action, to do or cause to be done and to assist and cooperate with the other Party in doing all things necessary, proper or advisable under applicable Laws to consummate and make effective the transactions contemplated hereby, including but not limited to: (a) the satisfaction of the conditions precedent to the obligations of the Parties; (b) the obtaining of applicable Governmental Consents, and consents, waivers and approvals of any other third parties; (c) defending of any claim, action, suit, investigation or proceeding, whether judicial or administrative, challenging this Agreement or the performance of the obligations hereunder; and (d) the execution and delivery of such instruments, and the taking of such other actions as the other Party may reasonably request in order to carry out the intent of this Agreement.  Notwithstanding the foregoing, under no circumstances will the Investor be required to disclose to the Company, the Company Subsidiaries or any third party any information the disclosure of which is prohibited by Law, nor shall it be required to agree to any restrictions, conditions or commitments imposed or otherwise required by any Government Entity that are determined by the Investor in its sole discretion to be unduly burdensome, other than customary passivity commitments, in order to consummate and make effective the transactions contemplated hereby.

3.7          Legend.

(a)        The Investor agrees that all certificates or other instruments representing the Shares subject to this Agreement shall bear legends substantially to the following effect, until such time as they are not required under Section 3.7(b)

“THE SHARES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.”

(b)          Upon request of the Investor, the Company shall promptly cause such legends to be removed from any certificate for any Shares to be so transferred if such Shares are being transferred pursuant to an exemption from the registration securities requirements of the Securities Act and applicable state Laws, subject to receipt by the Company of an opinion of counsel for the Investor reasonably satisfactory to the Company to the effect that such legend is no longer required under the Securities Act and applicable state Laws.  The Investor acknowledges that the sale of the Shares provided for herein has not been registered under the Securities Act or under any state securities Laws and agrees that it shall not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities Laws.

3.8         Exchange Listing.

      The Company shall use its reasonable best efforts to cause the Shares to be approved for listing on the Nasdaq Stock Market as promptly as possible.

3.9         Authorized Shares.

      The Company will at all times reserve, free of any preemptive or similar rights of stockholders of the Company, a number of unissued shares of Class A Common Stock, sufficient to convert automatically, in accordance with the terms of the
      certificate of incorporation of the Company, all of the shares of Class C Common Stock then outstanding.

24

3.10       Rule 144 Reporting.

      With a view to making available to the Investor the benefits of certain rules and regulations of the SEC which may permit the sale of the Shares by the Investor without registration under the Securities Act upon compliance with the initial
      holding period and other applicable requirements of Rule 144 under the Securities Act, the Company agrees to use its reasonable best efforts to:

(i)         make and keep adequate current public information with respect to the Company available, as those terms are understood and defined in Rule 144(c)(1) or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of this Agreement;

(ii)        so long as the Investor owns any of the Shares, furnish to the Investor forthwith upon request: (A) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 under the Securities Act, and of the Exchange Act; (B) a copy of the most recent annual or quarterly report of the Company; and (C) such other reports and documents as the Investor may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any of the Shares without registration; and

(iii)       to take such further action as the Investor may reasonably request, all to the extent required from time to time to enable the Investor to sell Shares without registration under the Securities Act.

3.11        Exchange Rights; Co-Redemption Rights.

(a)         The Investor shall have the right from time to time to exchange any of the shares of Class A Common Stock acquired by the Investor hereunder for Class C Common Stock in order to reduce its ownership of voting common stock to less than 4.50% of the then outstanding shares of Class A Common Stock.  If the Investor transfers shares of Class C Common Stock held by the Investor to a Person other than the Investor or an Affiliate of the Investor in a transaction that complies with the applicable terms and conditions set forth in the Company’s certificate of incorporation, including the restrictions on transfer contained therein that are intended to cause such shares to qualify as non-voting shares under the applicable requirements and policies of the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation or any other regulatory body having jurisdiction over the Company or the Bank, then such shares shall immediately and without any further action on the part of any Person, automatically convert into shares of Class A Common Stock.  Any shares of Class C Common Stock received by the Investor or any Affiliate of the Investor pursuant to this Section 3.11(a) shall be subject to the restrictions set forth in the provisions of the Company’s certificate of incorporation relating to the Class C Common Stock.

25

(b)          Should the Company at any time and for any reason propose to retire or repurchase shares of its outstanding Class A Common Stock or Class C Common Stock, the Company shall give the Investor thirty (30) days’ prior written notice of such proposed action.  Such notice shall specify the number of outstanding shares of Class A Common Stock or Class C Common Stock, as applicable, prior to such retirement or repurchase, and the number of outstanding shares of Class A Common Stock or Class C Common Stock, as applicable, that would be outstanding after giving effect to such retirement or repurchase.  Upon receipt of such notice, the Investor shall have the right to sell to the Company, at the same price per share as that at which the Company proposes to retire or repurchase its other outstanding shares of Class A Common Stock or Class C Common Stock, the minimum number of shares of Class A Common Stock and Class C Common Stock, as applicable, that would result in the Investor and its Affiliates owning less than 4.50% of the then outstanding shares of Class A Common Stock and less than 10% of the total stockholders’ equity of the Company, as applicable, after giving effect to such retirement or repurchase and such sale by the Investor to the Company; provided, that (i) the Company shall not be required hereby to purchase from the Investor more shares of Class A Common Stock and Class C Common Stock, as applicable, than were indicated in its notice of desired purchase sent to the Investor, (ii) the Company may decide, after having given such a notice, not to repurchase or retire any shares of Class A Common Stock or Class C Common Stock, as applicable, and (iii) the Investor’s right to sell shares of Class A Common Stock and Class C Common Stock, as applicable, pursuant hereto shall be subject to pro rata reduction to the extent that CJA Private Equity Financial Restructuring Master Fund I L.P. and its affiliates, and National Community Investment Fund and its Affiliates, exercise the similar sale rights granted to them by the Company pursuant to agreements that are in effect as of the date hereof, based on the respective numbers of shares of Class A Common Stock or Class C Common Stock, as applicable, requested to be sold by each.  Within ten (10) days after the receipt of such notice by the Investor, the Investor shall notify the Company in writing of its intention to exercise its rights to sell shares of Class A Common Stock and Class C Common Stock, as applicable, to the Company pursuant to this Section 3.11(b), which shall include the number of shares of Class A Common Stock and Class C Common Stock to be sold by the Investor to the Company in accordance with this Section 3.11, the record and beneficial owner of such shares and the proposed closing date, which date, unless otherwise agreed by the Company, shall be no later than the business day preceding the date of the retirement or repurchase.  The rights of the Investor provided in this Section 3.11(b) shall remain in effect for so long as the Investor and its Affiliates have beneficial ownership of any shares of the Company’s outstanding Class A Common Stock or Class C Common Stock.  The provisions of this Section 3.11 shall apply on an as-converted basis to any Class C Common Stock theretofore issued in exchange for Class A Common Stock at the request of the Investor.

ARTICLE 4.

      TERMINATION

4.1          Termination.

      This Agreement may be terminated prior to the Closing:

(a)          by mutual written agreement of the Company and the Investor;

26

(b)        by either Party, upon written notice to the other Party in the event that the Closing does not occur on or before September 1, 2021; provided, however, that the right to terminate this Agreement pursuant to this Section 4.1(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;

(c)          by either Party, upon written notice to the other Party, (i) in the event that Stockholder Approval is required under applicable Law or the rules and regulations of the Nasdaq Stock Market, but has not been obtained on or prior to the closing date of the Merger or (ii) the Authorized Shares Increase Approval has not been obtained on or prior to the closing date of the Merger;

(d)          by the Investor, upon written notice to the Company, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Company in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(ii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in the absence of such breach or condition; provided that this Section 4.1(d) shall only apply if the Investor is not in material breach of any of the terms of this Agreement;

(e)          by the Company, upon written notice to the Investor, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Investor in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(iii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in absence of such breach or condition; provided that this Section 4.1(e) shall only apply if the Company is not in material breach of any of the terms of this Agreement; or

(f)         by any Party, upon written notice to the other Party, in the event that any Governmental Entity shall have issued any order, decree or injunction or taken any other action restraining, enjoining or prohibiting any of the transactions contemplated by this Agreement, and such order, decree, injunction or other action shall have become final and non-appealable.

4.2        Effects of Termination.

      In the event of any termination of this Agreement as provided in Section 4.1, this Agreement \(other than Section 3.4, this Article 4 and Article 6 of this Agreement, which shall remain in full force and effect\) shall forthwith become wholly void
      and of no further force and effect; provided, that nothing herein shall relieve any Party from liability for fraud or willful breach of this Agreement.

ARTICLE 5.

      INDEMNITY

5.1          Indemnification by the Company.

(a)         After the Closing, and subject to Sections 5.1(b), 5.3 and 5.4, the Company shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Investor and its Affiliates, and their respective successors and assigns, officers, directors, partners, members and employees, as applicable, (the “Investor Indemnified Parties”) against and from, and reimburse any of the Investor Indemnified Parties for, all Losses that any of the Investor Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Company in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by the Company to perform any of its covenants or agreements contained in this Agreement.  Notwithstanding anything herein to the contrary, the obligations of the Company under this Section 5.1(a) shall not be applicable to or inure to the benefit of any transferee of the Common Stock sold pursuant to this Agreement who is not an Affiliate of the Investor.

27

(b)          Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless any of the Investor Indemnified Parties against, or reimburse any of the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) (other than Losses arising out of the inaccuracy or breach of any Company Specified Representations) until the aggregate amount of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a) exceeds $100,000 (the “Threshold Amount”), upon the occurrence of which the Company shall be obligated for all of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a).  Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless the Investor Indemnified Parties against, or reimburse the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1.

(c)         For purposes of Section 5.1(a), in determining whether there has been a breach of a representation or warranty, the Parties hereto shall ignore any “materiality,” “Material Adverse Effect” or similar qualifications.

5.2          Indemnification by the Investor.

(a)          After the Closing, and subject to Sections 5.2(b), 5.3 and 5.4, the Investor shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Company and its respective Affiliates and their respective successors and assigns, officers, directors, partners, members, employees, representatives and agents (collectively, the “Company Indemnified Parties”) against and from, and reimburse any of the Company Indemnified Parties for, all Losses that the Company Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Investor in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by such Investor to perform any of its covenants or agreements contained in this Agreement.

(b)          Notwithstanding anything to the contrary contained herein, the Investor shall not be required to indemnify, defend or hold harmless any of the Company Indemnified Parties against, or reimburse any of the Company Indemnified Parties for any Losses pursuant to Section 5.2(a)(1) until the aggregate amount of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a) exceeds the Threshold Amount, upon the occurrence of which the Investor shall be obligated for all of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a)(1).  Notwithstanding anything to the contrary contained herein, the Investor shall not be required to indemnify, defend or hold harmless the Company Indemnified Parties against, or reimburse the Company Indemnified Parties for, any Losses pursuant to Section 5.2(a)(1) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1 hereof.

28

(c)          For purposes of Section 5.2(a), in determining whether there has been a breach of a representation or warranty, the Parties shall ignore any “materiality” or similar qualifications.

5.3          Notification of Claims.

(a)         Any Person that may be entitled to be indemnified under this Article 5 (the “Indemnified Party”) shall promptly notify the party or parties liable for such indemnification (the “Indemnifying Party”) in writing of any claim in respect of which indemnity may be sought hereunder, including any pending or threatened claim or demand by a third party that the Indemnified Party has determined has given or could reasonably give rise to a right of indemnification under this Agreement (including a pending or threatened claim or demand asserted by a third party against the Indemnified Party) (each, a “Third Party Claim”), describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or demand; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Agreement except to the extent that the Indemnifying Party is materially prejudiced by such failure.  The Parties agree that notices for claims in respect of a breach of a representation, warranty, covenant or agreement must be delivered prior to the expiration of any applicable survival period specified in Section 6.1 for such representation, warranty, covenant or agreement; provided, that if, prior to such applicable date, a Party hereto shall have notified the other Party hereto in accordance with the requirements of this Section 5.3(a) of a claim for indemnification under this Agreement (whether or not formal legal action shall have been commenced based upon such claim), such claim shall continue to be subject to indemnification in accordance with this Agreement notwithstanding the passing of such applicable date.

29

(b)          Upon receipt of a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) in respect of a Third Party Claim, the Indemnifying Party may, by notice to the Indemnified Party delivered within twenty (20) Business Days of the receipt of notice of such Third Party Claim, assume the defense and control of any Third Party Claim, with its own counsel reasonably acceptable to the Indemnified Party and at its own expense.  The Indemnified Party shall have the right to employ counsel on its own behalf for, and otherwise participate in the defense of, any such Third Party Claim, but the fees and expenses of its counsel will be at its own expense unless (A) the employment of counsel by the Indemnified Party at the Indemnifying Party’s expense has been authorized in writing by the Indemnifying Party, (B) the Indemnified Party reasonably believes there may be a conflict of interest between the Indemnified Party and the Indemnifying Party in the conduct of the defense of such Third Party Claim, (C) the Indemnified Party reasonably believes there are legal defenses available to it that are different from, additional to or inconsistent with those available to the Indemnifying Party, or (D) the Indemnifying Party has not in fact employed counsel to assume the defense of such Third Party Claim within a reasonable time after receipt of notice of the commencement of such Third Party Claim, in each of which cases the fees and expenses of such Indemnified Party’s counsel shall be at the expense of the Indemnifying Party; provided, however, that in the event that the Company is required to assume the fees and expenses of such Investor Indemnified Party’s counsel in accordance with the foregoing and such Investor Indemnified Party is similarly situated with any other “Investor Indemnified Party” under any of the other stock purchase agreements with respect to any Third Party Claim, and does not have any conflict of interest with such Person in the conduct of the defense of such Third Party Claim or have legal defenses available to it that are different from, additional to or inconsistent with those available to such Person, such Investor Indemnified Party shall be required to employ the same counsel as such Person and the Company shall be responsible for the fees and expenses of only one such counsel for such Investor Indemnified Party and such other Person or Persons (assuming any of clauses (A) through (D) above is satisfied).  The Indemnified Party may take any actions reasonably necessary to defend such Third Party Claim prior to the time that it receives a notice from the Indemnifying Party as contemplated by the immediately preceding sentence.  The Indemnified Party shall, and shall cause each of its Affiliates and representatives to, use reasonable best efforts to cooperate with the Indemnifying Party in the defense of any Third Party Claim.  The Indemnifying Party shall not, without the prior written consent of the Indemnified Party (which shall not be unreasonably withheld or delayed), consent to a settlement, compromise or discharge of, or the entry of any judgment arising from, any Third Party Claim, unless such settlement, compromise, discharge or entry of any judgment does not involve any statement, finding or admission of any fault, culpability, failure to act, violation of Law or admission of any wrongdoing by or on behalf of the Indemnified Party, and the Indemnifying Party shall (i) pay or cause to be paid all amounts arising out of such settlement or judgment concurrently with the effectiveness of such settlement or judgment (unless otherwise provided in such judgment), (ii) not encumber any of the assets of any Indemnified Party or agree to any restriction or condition that would apply to or materially adversely affect any Indemnified Party or the conduct of any Indemnified Party’s business and (iii) obtain, as a condition of any settlement, compromise, discharge, entry of judgment (if applicable), or other resolution, a complete and unconditional release of each Indemnified Party in form and substance reasonably satisfactory to such Indemnified Party from any and all liabilities in respect of such Third Party Claim.  An Indemnified Party shall not settle, compromise or consent to the entry of any judgment with respect to any claim or demand for which it is seeking indemnification from the Indemnifying Party or admit to any liability with respect to such claim or demand without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed); provided, that such consent shall not be required if the Indemnifying Party has not fulfilled any material obligations under this Section 5.3(b).

(c)          In the event any Indemnifying Party receives a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) that does not involve a Third Party Claim, the Indemnifying Party shall notify the Indemnified Party within twenty (20) Business Days following its receipt of such notice whether the Indemnifying Party disputes its liability to the Indemnified Party under this Agreement.  The Indemnified Party shall reasonably cooperate with and assist the Indemnifying Party in determining the validity of any such claim for indemnity by the Indemnified Party.

30

5.4         Indemnification Payment.  In the event a claim or any Action for indemnification hereunder has been finally determined, the amount of such final determination shall be paid by the Indemnifying Party to the Indemnified Party on demand in immediately available funds.  A claim or an Action, and the liability for and amount of damages therefor, shall be deemed to be “finally determined” for purposes of this Agreement when the Parties have so determined by mutual agreement or, if disputed, when a final non-appealable judicial order has been entered into with respect to such claim or Action.

5.5        Exclusive Remedies.

      Subject to Section 6.14, each Party acknowledges and agrees that following the Closing, the indemnification provisions hereunder shall be the sole and exclusive remedies of the Parties for any breach of the representations, warranties or
      covenants contained in this Agreement.  No investigation of the Company by the Investor, or of the Investor by the Company, whether prior to or after the date of this Agreement, shall limit any Indemnified Party’s exercise of any right hereunder
      or be deemed to be a waiver of any such right.  The Parties agree that any indemnification payment made pursuant to this Agreement shall be treated as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

ARTICLE 6.

      MISCELLANEOUS

6.1         Survival.  The representations and warranties of the Parties contained in this Agreement shall survive in full force and effect until the date that is fifteen (15) months after the Closing Date (or until final resolution of any claim or action arising from the breach of any such representation and warranty, if notice of such breach was provided prior to the end of such period), at which time they shall terminate and no claims shall be made for indemnification under Section 5.1 or Section 5.2, as applicable, for breaches of representations or warranties thereafter, except the Company Specified Representations (other than the representations and warranties made in Section 2.2(v), which shall survive until the expiration of the applicable statute of limitations) and the Investor Specified Representations shall survive the Closing indefinitely.  The covenants and agreements set forth in this Agreement shall survive until the expiration of any applicable statute of limitations or until performed or no longer operative in accordance with their respective terms.  Notwithstanding the foregoing, the Company Specified Representations shall survive for the period of the applicable statute of limitations.

6.2        Other Definitions.

      Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa, and references to any agreement, document or
      instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time.  In addition, the following terms shall have the meanings assigned to them below:

31

(a)         the term “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person provided that no security holder of the Company shall be deemed to be an Affiliate of any other security holder or of the Company or any of the Company Subsidiaries solely by reason of any investment in the Company and, for purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled

          by” and “under 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 or policies
      of such Person, whether through the ownership of voting securities, by contract or otherwise;

(b)        the term “Agency” means the Federal Housing Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home Administration (now known as Rural Housing and Community Development Services), the Federal National Mortgage Association, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture or any other federal or state agency with authority to (i) determine any investment, origination, lending or servicing requirements with regard to mortgage loans originated, purchased or serviced by the Company or (ii) originate, purchase, or service mortgage loans, or otherwise promote mortgage lending, including state and local housing finance authorities;

(c)          the term “Board of Directors” means the Board of Directors of the Company;

(d)          the term “Business Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York or in the State of California generally are authorized or required by Law or other governmental actions to close;

(e)          the term “Capital Stock” means the capital stock or other applicable type of equity interest in a Person;

(f)           the term “Code” means the Internal Revenue Code of 1986, as amended;

(g)        the term “Company Specified Representations” means the representations and warranties made in Section 2.2(a), Section 2.2(b), Section 2.2(c), Section 2.2(d), Section 2.2(x), Section 2.2(z) and Section 2.2(hh);

(h)        the term “Disclosure Schedule” shall mean a schedule delivered, on or prior to the date of this Agreement, by (i) the Investor to the Company and (ii) the Company to the Investor setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in Section 2.2 with respect to the Company, or in Section 2.3 with respect to the Investor, or to one or more covenants contained in Article 3;

(i)           the term “GAAP” means United States generally accepted accounting principles and practices as in effect from time to time;

(j)           the term “Governmental Consent” means any notice to, registration, qualification, designation, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Entity, or the expiration or termination of any statutory waiting periods;

32

(k)      the term “Governmental Entity” means any court, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign, and any applicable industry self-regulatory organization or securities exchange;

(l)          the term “Insurer” means a Person who insures or guarantees for the benefit of the mortgagee all or any portion of the risk of loss upon borrower default on any of the mortgage loans originated, purchased or serviced by the Bank, including the Federal Housing Administration, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any private mortgage insurer, and providers of hazard, title or other insurance with respect to such mortgage loans or the related collateral;

(m)        the term “Investor Specified Representations” means the representations and warranties made in Section 2.3(b)(i), Section 2.3(d) and Section 2.3(f);

(n)         the term “Knowledge” of the Company and words of similar import mean the knowledge of any directors or executive officers of the Company listed on the Disclosure Schedule hereto;

(o)       the term “Loan Investor” means any Person (including an Agency) having a beneficial interest in any mortgage loan originated, purchased or serviced by the Bank or a security backed by or representing an interest in any such mortgage loan;

(p)         the term “Losses” means any and all losses, damages, reasonable costs, reasonable expenses (including reasonable attorneys’ fees and disbursements), liabilities, settlement payments, awards, judgments, fines, obligations, claims, and deficiencies of any kind, excluding special, consequential, exemplary and punitive damages;

(q)         the term “Person” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, Governmental Entity or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity;

(r)          the term “Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company or other entity (x) of which such Person or a Subsidiary of such Person is a general partner or (y) of which a majority of the voting securities or other voting interests, or 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;

(s)         the term “Tax” or “Taxes” means all United States federal, state, local or foreign income, profits, estimated, gross receipts, windfall profits, severance, property, intangible property, occupation, production, sales, use, license, excise, emergency excise, franchise, capital gains, capital stock, employment, withholding, transfer, stamp, payroll, goods and services, value added, alternative or add-on minimum tax, or any other tax, custom, duty or governmental fee, or other like assessment or charge of any kind whatsoever, together with any interest, penalties, fines, related liabilities or additions to tax that may become payable in respect thereof imposed by any Governmental Entity, whether or not disputed;

33

(t)          the term “Tax Return” means any return, declaration, report or similar statement required to be filed with respect to any Taxes (including any attached schedules), including, without limitation, any information return, claim or refund, amended return and declaration of estimated Tax;

(u)          the term “Voting Securities” means at any time shares of any class of Capital Stock of the Company, including but not limited to Voting Common Stock (or, after giving effect to the Merger Transactions, Class A Common Stock), and Voting Debt that are then entitled to vote generally in the election of directors;

(v)          the word “or” is not exclusive;

(w)         the words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”;

(x)        the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision; and

(y)       all article, section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit and schedule references not attributed to a particular document shall be references to such exhibits and schedules to this Agreement.

6.3         Amendment and Waivers.

      The conditions to each Party’s obligation to consummate the Closing are for the sole benefit of such Party and may be waived by such Party in whole or in part to the extent permitted by Law.  No amendment or waiver of any provision of this
      Agreement will be effective against any Party unless it is in a writing signed by a duly authorized officer of such Party.

6.4      Counterparts and Facsimile.  For the convenience of the Parties, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement.  Executed signature pages to this Agreement may be delivered by facsimile and such facsimiles shall be deemed as sufficient as if manually signed signature pages had been delivered.

6.5         Governing Law.

      This Agreement will be governed by and construed in accordance with the Laws of the State of California applicable to contracts made and to be performed entirely within such State.

6.6      WAIVER OF JURY TRIAL.

      TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, INVESTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY WHETHER
      BASED ON CONTRACT, EQUITY, TORT OR ANY OTHER THEORY.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN BY INVESTOR, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

34

6.7         Notices.  Any notice, request, instruction or other document to be given hereunder by any Party to the other will be in writing and will be deemed to have been duly given (a) on the date of delivery if delivered personally or by telecopy or facsimile, upon confirmation of receipt, (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid, provided that any such notice, request, instruction or other document to be given hereunder shall not be deemed to have been duly given unless and until it is sent via electronic mail to the recipient thereof.  All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice.

(a)          If to the Investor:

First Republic Bank

      Attn: Michael J. Roffler

      111 Pine Street

San Francisco, CA 94111

(b)          If to the Company:

Broadway Financial Corporation

      5055 Wilshire Boulevard, Suite 500

      Los Angeles, California 90036

      Attn: Brenda Battey,

Chief Financial Officer

Email: bbattey@broadwayfederalbank.com

with a copy (which copy shall not constitute notice) to:

Arnold & Porter LLP

777 South Figueroa Street,

      44th Floor

Los Angeles, California 90017

      Attn: James R. Walther, Esq.

      Fax: \(213\) 243-4199

Email: James.Walther@arnoldporter.com

6.8      Entire Agreement.

      This Agreement constitutes the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, inducements or conditions, both written and oral, among the Parties, with respect to the subject matter
      hereof and thereof.

35

6.9         Successors and Assigns.

      This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns, including any purchasers of the Common Stock to be issued pursuant to this Agreement.  The Company shall not assign this
      Agreement or any rights or obligations hereunder without the prior written consent of the Investor.  The Investor may assign some or all of its rights hereunder or thereunder without the consent of the Company to any Affiliate of the Investor,
      and such assignee shall be deemed to be an Investor hereunder with respect to such assigned rights and shall be bound by the terms and conditions of this Agreement that apply to the Investor.

6.10       Captions.  The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.

6.11       Severability.

      If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such
      provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal
      substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon 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.

6.12       Third Party Beneficiaries.  Nothing contained in this Agreement, expressed or implied, is intended to confer upon any Person other than the Parties, any benefit right or remedies, except that the Placement Agents may rely on the representations and warranties contained herein to the same extent as if they were party to this Agreement and the provisions of Sections 5.1 and 5.2 shall inure to the benefit of the Persons referred to in such Sections.

6.13     Public Announcements.

      The Investor will not make \(and will use its reasonable best efforts to ensure that its Affiliates and representatives do not make\) any news release or public disclosure with respect to this Agreement and any of the transactions contemplated
      hereby, without first consulting with the Company and, in each case, also receiving the Company’s consent \(which shall not be unreasonably withheld, conditioned or delayed\).

6.14       Specific Performance.  The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms.  It is accordingly agreed that the Parties shall be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity.

6.15       No Recourse to Other Persons.  This Agreement may only be enforced against the named Parties.  All claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may be made only against the entities that are expressly identified as Parties or that are subject to the terms hereof, and no past, present or future director, officer, employee, incorporator, member, manager, partner, stockholder, Affiliate, agent, attorney or representative of any Party (including any person negotiating or executing this Agreement on behalf of a Party) shall have any liability or obligation with respect to this Agreement or with respect to any claim or cause of action, whether in tort, contract or otherwise, that may arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement and the transactions contemplated hereby.

[signature page follows]

36

IN WITNESS WHEREOF, the Parties 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:
Name: Wayne-Kent A. Bradshaw
Title: President and Chief Executive Officer

[Stock Purchase Agreement]

FIRST REPUBLIC BANK
By:
Name:
Title:
Address for notices:
---
First Republic Bank
Attn: Michael J. Roffler
111 Pine Street
San Francisco, CA 94111

[Stock Purchase Agreement]

EXECUTION VERSION

INVESTOR’S RIGHTS LETTER AGREEMENT

April 6, 2021

Broadway Financial Corporation

5055 Wilshire Boulevard

Suite 500

Los Angeles, CA 90036

Attn: Brenda J. Battey

Executive Vice President & Chief Financial Officer

Re:      Investor’s Rights

Ladies and Gentlemen:

Reference is made to that certain Stock Purchase Agreement, dated as of February 19, 2021 (the “Stock Purchase Agreement”), by and between Broadway Financial Corporation, a Delaware public benefit corporation (the “Company”) and First Republic Bank, a California state chartered bank (the “Investor”), pursuant to which the Company has issued and delivered to the Investor 1,123,708 shares of Class A Common Stock, par value $0.01 per share (the “Class A Common Shares” and, together with the Company’s Class C Common Shares, the “Common Shares”) for the Per Share Purchase Price.  This letter agreement memorializes our agreement concerning certain legal compliance matters and certain governance rights that the Company will grant to the Investor effective as of the date hereof in respect of the Investor’s ownership of the Common Shares.  Any capitalized terms used herein but not otherwise defined herein shall have their respective meanings as set forth in the Stock Purchase Agreement.

1.          Inspection; Information Rights.

(a)          For so long as the Investor holds an amount of Common Shares equal to at least 50% of the Common Shares acquired by the Investor at the Closing of the Stock Purchase Agreement, the Company shall permit the Investor, in a manner designed to not interfere with the normal business operations of the Company, to visit and inspect the Company’s properties, to examine its books of account and records and, for so long as the Investor holds any Common Shares, the Company shall permit the Investor to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times during normal business hours as may be requested by the Investor upon reasonable advance notice, and subject to any limitations required by applicable law or this letter agreement.

(b)          For so long as the Investor holds any Common Shares, the Company shall deliver to the Investor copies of the Company’s annual CDFI Fund impact metrics reports as soon as reasonably practicable after such reports become available.

(c)          For so long as the Investor holds any Common Shares, the Company shall deliver to the Investor the following, unless already available on the United States Securities and Exchange Commission’s EDGAR site or successor system:

1

(i)          as soon as reasonably practicable, but in any event within 90 days after the end of each fiscal year of the Company, an audited consolidated income statement, statement of cash flows and statement of shareholder’s equity and an audited consolidated balance sheet of the Company, together with all related financial notes thereto, in each case prepared in accordance with GAAP;

(ii)       as soon as practicable, but in any event within 45 days after the end of each quarter of each fiscal year of the Company (excluding the fourth quarter of each fiscal year), an unaudited consolidated income statement and statement of cash flows and an unaudited consolidated balance sheet as of the end of such fiscal quarter, in each case prepared in accordance with GAAP; and

(iii)        a statement of the total number of outstanding shares of Common Stock of the Company (a “Share Count Statement”) (A) as soon as practicable, but in any event within 45 days of the end of each fiscal quarter of the Company (including the fourth fiscal quarter), or at any time as the Investor may reasonably request from time to time, and (B) within 5 business days following any change in the number of outstanding shares of Common Stock of the Company (excluding outstanding restricted stock awards) of more than 1% as compared to the most recent Share Count Statement delivered to the Investor.

(iv)        as soon as reasonably practicable reasonably detailed reports with respect to (A) material legal, regulatory or compliance matters of which the Company or the Company Subsidiaries is, or is reasonably expected to become, a party or otherwise subject, or any other matters that may reasonably be expected to adversely impact the reputation of the Company or its investors (any such event, an “Adverse Compliance/Reputational Matter”) and (B) any event that has caused, or may reasonably be expected to cause, the Company to fail to qualify as a “minority depository institution” (as defined under applicable law);

Notwithstanding anything in this letter agreement to the contrary, the Company shall not be obligated pursuant to Sections 1(a), 1(b) or 1(c)(ii) or (iv) to provide information (1) that it reasonably considers to be confidential competitive information or confidential supervisory information, (2) the disclosure of which it  reasonably determines will violate applicable Law (including applicable bank secrecy laws and similar legislation), result in the loss of any legal privilege or expose the Company to risk of liability for disclosure of personal information; provided, however, that if the foregoing applies the Company shall use reasonable efforts to make substitute disclosure arrangements (including redacting information or making substitute disclosure arrangements) that would enable the provision of such information without disclosing such competitive information, violating such Law or losing such privilege, (3) that would be materially adverse to the interests of the Company or any of its Subsidiaries in any pending or threatened Action or (4) that would constitute material non-public information for so long as the Company is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act, unless the Company and the Investor execute a customary confidentiality agreement relating thereto.

2

2.           OFAC Compliance.  As of and after the date hereof, the Company shall not (and shall cause each Company Subsidiary not to) knowingly directly or indirectly use the proceeds of the sale of the Common Shares pursuant to the Stock Purchase Agreement, or lend, contribute or otherwise make available such proceeds to any Company Subsidiary, joint venture partner or other Person for direct or indirect use, in connection with any sales or operations in any country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC.

3.           Avoidance of Control.

(a)          Neither the Company nor any Company Subsidiary shall take any action (including any redemption, repurchase, or recapitalization of Common Stock or other Voting Securities of the Company, or securities or rights, options or warrants to purchase Common Stock or other Voting Securities of the Company, or securities of any type whatsoever that are, or may become, convertible into or exchangeable into or exercisable for Common Stock or other Voting Securities of the Company, except where, solely with respect to any such redemption, repurchase or recapitalization of the Common Stock, the Investor is given the right to participate in such redemption, repurchase or recapitalization to the extent of the Investor’s pro rata proportion), that would cause (i) the Voting Securities “owned” or “controlled,” directly or indirectly, by the Investor or any Affiliate of the Investor for purposes of the Bank Holding Company Act, as amended (the “BHC Act”) and its implementing regulations (for the avoidance of doubt, excluding any securities owned or controlled in a fiduciary capacity, solely for trading purposes, pursuant to an underwriting commitment, in inventory in connection with market making activities, received in lieu of a debt previously contracted if disposed of within the time required by applicable law, and such other holdings as may not constitute ownership or control for purposes of the BHC Act, as determined from time to time by interpretations or guidance from the staff of the Board of Governors of the Federal Reserve (the “Federal Reserve Board”)) to increase above 4.99% of  the Company’s Voting Securities, or (ii) the Investor’s total aggregate ownership of Voting Securities and Nonvoting Securities of the Company to exceed 24.9% of the Total Equity of the Company, consistent with the restrictions set forth in the Federal Reserve Board’s guidance for non-controlling equity investments, without the prior written consent of the Investor; provided, further, that in the event of a sale, merger, consolidation or other similar transaction involving the Company following the Closing Date, the Company shall not take any action that would cause the Investor to own more than 4.99% of the total Voting Securities, or more than 24.9% of the total issued and outstanding equity, of the acquiror or surviving company, as applicable, following consummation of any such transaction.  For the purposes of this letter agreement, “Voting Securities” shall have such meaning as defined in 12 CFR 225.2(q)(1); “Nonvoting Securities” shall have such meaning as defined in 12 CFR 225.2(q)(2); and “Total Equity” shall have such meaning as defined in 12 CFR 225.34, in each case, as may be amended or modified from time to time.

(b)        In the event that the Company breaches its obligations under this Section 3 or believes that it is reasonably likely to breach such obligations, it shall notify the Investor as promptly as practicable and shall cooperate in good faith with the Investor to modify any ownership or other arrangements or take any other action, in each case, as is necessary to cure or avoid such breach.

3

4.           Transfer Rights.  Notwithstanding anything to the contrary in this letter agreement, the Investor may at any time and from time to time transfer all or any part of its Common Shares to any third party.  Any such transfer will be made in accordance with applicable federal and state securities laws and the Company will provide the Investor with reasonable assistance in effecting any such transfer.

5.           Further Assurances.  The Company and the Investor each agree to execute and deliver, or cause its respective Affiliates to execute and deliver, such further documents and instruments and to take such further actions as may be necessary or desirable and reasonably requested by the other party to carry out the provisions of this letter agreement and perform the obligations herein in compliance with applicable law.

6.           Assignment.  This letter agreement may not be assigned (in whole or in part) by the Investor without the prior written consent of the Company and any such assignment shall be void and of no force or effect.  Notwithstanding the foregoing, this letter agreement may be assigned (in whole or in part) by the Investor to any of its Affiliates that may hold Common Shares from time to time.

7.           Termination.  This letter agreement shall automatically terminate and be of no further force and effect upon (a) the date the Investor and its Affiliates do not own any Common Shares or (b) the liquidation, dissolution or winding up of the Company, or execution by the Company of a general assignment for the benefit of creditors or the appointment of a receiver or trustee to take passion of the property or assets of the Company.

8.           Miscellaneous.  Sections 6.3 through 6.15 of the Stock Purchase Agreement are incorporated by reference into this letter agreement, mutatis mutandis.

[Signature Page Follows]

4

The parties have executed this letter agreement as of the date first set forth above.

THE COMPANY:
BROADWAY FINANCIAL CORPORATION
By:
---
(Signature)
---
Name:
---
Title:
---

[Signature Page to Broadway Financial IRA]

THE INVESTOR:
FIRST REPUBLIC BANK
By:
---
(Signature)
---
Name:
---
Title:

[Signature Page to Broadway Financial IRA]

Exhibit 10.28

EXECUTION VERSION

BROADWAY FINANCIAL CORPORATION

STOCK PURCHASE AGREEMENT

February 19, 2021

TABLE OF CONTENTS

Page
ARTICLE 1. PURCHASE; CLOSING 2
1.1 Issuance, Sale and Purchase 2
1.2 Closing; Deliverables for the Closing; Conditions to the Closing 2
ARTICLE 2. REPRESENTATIONS AND WARRANTIES 4
2.1 Certain Terms 4
2.2 Representations and Warranties of the Company 5
2.3 Representations and Warranties of the Investor 20
ARTICLE 3. COVENANTS 22
3.1 Conduct of Business Prior to Closing 22
3.2 Use of Proceeds 22
3.3 Regulatory Filings 22
3.4 Confidentiality 22
3.5 Publicity 23
3.6 Commercially Reasonable Efforts 23
3.7 Legend. 23
3.8 Exchange Listing 24
3.9 Authorized Shares 24
3.10 Rule 144 Reporting 24
ARTICLE 4. TERMINATION 25
4.1 Termination 25
4.2 Effects of Termination 25
ARTICLE 5. INDEMNITY 26
5.1 Indemnification by the Company 26
5.2 Indemnification by the Investor 26
5.3 Notification of Claims 27
5.4 Indemnification Payment 29
5.5 Exclusive Remedies 29
ARTICLE 6. MISCELLANEOUS 29
6.1 Survival 29
6.2 Other Definitions 29

i

6.3 Amendment and Waivers 32
6.4 Counterparts and Facsimile 32
6.5 Governing Law 33
6.6 WAIVER OF JURY TRIAL 33
6.7 Notices 33
6.8 Entire Agreement 34
6.9 Successors and Assigns 34
6.10 Captions 34
6.11 Severability 34
6.12 Third Party Beneficiaries 34
6.13 Public Announcements 34
6.14 Specific Performance 34
6.15 No Recourse to Other Persons 35

INDEX OF DEFINED TERMS

Page
Action 8
Affiliate 30
Agency 30
Agreement 1
Authorized Shares Increase Approval 3
Bank 6
Bank Merger 1
Benefit Plans 16
Board of Directors 30
Business Day 30
Capital Stock 30
CDFI 6
CFB 1
Class A Common Stock 1
Class B Common Stock 1
Class C Common Stock 1
Closing 2
Closing Date 2
Code 30
Company 1
Company Employees 16
Company Financial Statements 9

ii

Company Indemnified Parties 26
Company Insurance Policies 15
Company IT Assets 10
Company Reports 9
Company Specified Representations 30
Company Stock Plan 7
Company Subsidiaries 6
Company Subsidiary 6
Concurrent Other Transactions 1
control 30
controlled by 30
controlling 30
Disclosure Schedule 30
Disqualification Event 18
EESA 16
ERISA 16
ERISA Affiliate 16
Exchange Act 9
FDIC 6
GAAP 30
Governmental Authorizations 13
Governmental Consent 31
Governmental Entity 31
Indemnified Party 27
Indemnifying Party 27
Insider 19
Insurer 31
Intellectual Property Rights 15
Investment 1
Investor 1
Investor Indemnified Parties 26
Investor Specified Representations 31
Knowledge 31
Law 13
Liens 8
Loan Investor 31
Losses 31
Material Adverse Effect 4
Merger 1
Merger Agreement 1
Merger Transactions 1
Multiemployer Plan 16
OFAC 12
Parties 1
Per Share Purchase Price 2

iii

Person 31
Placement Agents 1
Preferred Stock 6
Previously Disclosed 5
Purchase Price 2
Rule 506 18
SEC 5
Securities Act 7
Shares 2
SLHCA Act 6
Stockholder Approval 3
Subsidiary 31
Surviving Bank 1
Tax 32
Tax Return 32
Taxes 32
Third Party Claim 27
Threshold Amount 26
under common control with 30
Voting Debt 7
Voting Securities 32

iv

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Agreement”) is dated as of February 19, 2021, and is entered into by and among Broadway Financial Corporation, a Delaware corporation (the “Company”),

      and Gerald I. White, in his individual capacity \(the “Investor”, and together with the Company, the “Parties”\).

RECITALS

WHEREAS, the Company is a party to that certain Agreement and Plan of Merger (the “Merger Agreement”) with CFBanc Corporation, a District of Columbia benefit corporation (“CFB”) which provides, among other things and subject to the terms and conditions of the Merger Agreement, for (i) the merger of CFB with and into the Company, with the Company continuing as the surviving entity in the Merger (the “Merger”), (ii) immediately following the Merger, Broadway Federal Bank, f.s.b., a wholly owned subsidiary of the Company, will merge with and into City First Bank of D.C., National Association (“CFB Sub”), a wholly owned subsidiary of CFB (the “Bank Merger” and together with the Merger and the

    other transactions contemplated by the Merger Agreement, the “Merger Transactions”\), with CFB Sub continuing as the surviving entity \(the “Surviving Bank”\), and \(iii\) the Company’s voting common stock, par value $0.01 per share, will be renamed Class A Common Stock \(“Class A Common Stock”\), a new class of non-voting common stock of the Company, par value $0.01 per share, will be created which will be named Class B Common Stock \(“Class

        B Common Stock”\) and the Company’s currently authorized non-voting common stock, par value $0.01 per share, will be renamed Class C Common Stock \(the “Class C Common Stock” and
    collectively, the “Common Stock” \);

WHEREAS, the Company has engaged Raymond James & Associates, Inc. and Keefe, Bruyette & Woods, Inc. as co-placement agents (the “Placement Agents”) for the offering of the Common Stock.

WHEREAS, the Company desires to issue and sell to the Investor, and the Investor desires to purchase from the Company, on the terms and conditions described herein, shares of Class A Common Stock at the Per Share Purchase Price specified herein (the “Investment”);

WHEREAS, the Investment is proposed to be made subject to completion of the Merger Transactions;

WHEREAS, the Investment is proposed to be made concurrently with the sale by the Company of shares of Class A Common Stock and Class C Common Stock at the Per Share Purchase Price via private placement to certain other investors (the “Concurrent Other Transactions”); and

NOW, THEREFORE, in consideration of the premises, and of the respective representations, warranties, covenants and other agreements of the Parties set forth herein, the Parties hereby agree as follows:

ARTICLE 1.

PURCHASE; CLOSING

1.1         Issuance, Sale and Purchase.  On the terms and subject to the conditions set forth herein, the Company agrees to issue and sell to the Investor, and the Investor agrees to purchase from the Company, free and clear of any Liens, 148,800 shares of Class A Common Stock (the “Shares”) at a per share purchase price of $1.78 (the “Per Share Purchase Price”), payable to the Company in immediately available funds at the Closing.  The aggregate purchase price payable pursuant to this Section 1.1 is referred to herein as the “Purchase Price”).

1.2          Closing; Deliverables for the Closing; Conditions to the Closing

(a)        Closing.  Unless this Agreement has been terminated pursuant to Article 4, and subject to the satisfaction or, to the extent permitted by Law and this Agreement, the written waiver of the conditions set forth in Section 1.2(c), the closing of the transaction contemplated by this Agreement (the “Closing”) shall take place at the offices of Arnold & Porter LLP, located at 777 South Figueroa Street, 44th Floor, Los Angeles, California 90017, or remotely via the electronic or other exchange of documents and signature pages, at 9:00 a.m. Pacific Time on the second Business Day after the satisfaction or, if permissible, waiver of the conditions set forth in Section1.2(c) (other than those which by their nature are to be satisfied at Closing, but subject to the satisfaction or waiver of such conditions), or at such other place or such other date as may be agreed to by the Parties (the “Closing Date”).

(b)           Closing Deliverables.  Subject to the satisfaction or permitted waiver of the conditions to the Closing set forth in Section 1.2(c), at the Closing the Parties shall make the following deliveries:

(i)          the Company shall deliver to the Investor one or more certificates evidencing the Shares registered in the name of the Investor (or if the Shares are to be uncertificated, the Company shall deliver appropriate evidence of such registration of the Shares in the name of the Investor);

(ii)       the Company shall deliver to the Investor a schedule setting forth the aggregate number of shares of each class of Capital Stock outstanding immediately after giving effect to the Merger Transactions, the Concurrent Other Transactions and the transactions contemplated hereby; and

(iii)        the Investor shall deliver the Purchase Price by wire transfer of immediately available funds to the account specified by the Company for this purpose by notice to the Investor prior to the Closing.

(c)          Closing Conditions.

(i)         The obligations of the Investor, on the one hand, and the Company, on the other hand, to consummate the purchase and sale of the Shares provided for in this Agreement are each subject to the satisfaction or, to the extent permitted by Law and this Agreement, the waiver by the Company or the Investor, as applicable, of the following conditions to the Closing under this Agreement:

2

(A)          All Governmental Consents required to have been obtained at or prior to the Closing Date in connection with the execution, delivery or performance of this Agreement and the consummation of the transactions contemplated hereby shall have been obtained and shall be in full force and effect.

(B)          The Merger Transactions shall have been consummated in accordance with the Merger Agreement, including the approval of the Merger Agreement by the stockholders of each of the Company and CFB;

(C)          If required under applicable Law or the rules and regulations of the Nasdaq Stock Market, the approval by stockholders of the Company of resolutions providing for the Company’s issuance of the maximum number of shares of Common Stock to be issued under this Agreement and in the Concurrent Other Transactions in accordance with this Agreement, the definitive documentation relating to the Concurrent Other Transactions, and applicable Law and the rules and regulations of the Nasdaq Stock Market (such approval being referred to herein as the “Stockholder Approval”) shall have been obtained;

(D)          Approval by the stockholders of the Company to increase in the authorized number of shares of Voting Common Stock (which will become Class A Common Stock upon completion of the Merger) from 50,000,000 shares to 75,000,000 shares, to be effected by the filing of an amended and restated certificate of incorporation of the Company (the “Authorized Shares Increase Approval”), shall have been obtained.

(ii)          The obligation of the Investor to consummate the purchase of Shares provided for in this Agreement is also subject to the satisfaction or waiver by the Investor of the following conditions to the Closing:

(A)          (i) The Company Specified Representations shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date and (ii) the other representations and warranties of the Company set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except, in the case of this clause (ii) only, to the extent that the failure to be true and correct (without regard to any materiality or Material Adverse Effect qualifications contained therein), would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and except, in the case of clauses (i) and (ii), that representations and warranties made as of a specified date shall be true and correct as of such date;

(B)          The Company shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date;

(C)          The Investor shall have received a certificate, dated as of the Closing Date, signed on behalf of the Company by a senior executive officer certifying to the effect that the conditions set forth in Section 1.2(c)(ii)(A), Section 1.2(c)(ii)(B) and Section 1.2(c)(ii)(D) have been satisfied on and as of the Closing Date; and

3

(D)          Since the date of this Agreement, no Material Adverse Effect shall have occurred and no change or other event shall have occurred that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(iii)        The obligation of the Company to consummate the sale of the Shares provided for in this Agreement is also subject to the satisfaction or written waiver by the Company of the following conditions to the Closing:

(A)          The representations and warranties of the Investor set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except to the extent that the failure to be true and correct (without regard to any materiality qualifications contained therein) would not materially adversely affect the ability of the Investor to perform its obligations hereunder and except that (1) representations and warranties made as of a specified date shall be true and correct as of such date and (2) the representations and warranties of the Investor set forth in Sections 2.3(d) and 2.3(f) shall be true and correct in all respects;

(B)          The Investor shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date; and

(C)         The Company shall have received a certificate, dated as of the Closing Date, signed by the Investor certifying to the effect that the conditions set forth in Section 1.2(c)(iii)(A) and Section 1.2(c)(iii)(B) have been satisfied on and as of the Closing Date.

ARTICLE 2.

REPRESENTATIONS AND WARRANTIES

2.1          Certain Terms.

(a)          As used in this Agreement, the term “Material Adverse Effect” means any circumstance, event, change, development or effect that, individually or in the aggregate, would reasonably be expected to (i) result in a material adverse effect on the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole, or (ii) materially impair or delay the ability of the Company or any of the Company Subsidiaries to perform its or their obligations under this Agreement to consummate the Closing or any of the transactions contemplated hereby; provided, however, that in determining whether a Material Adverse Effect has occurred under clause (i), there shall be excluded any circumstance, event, change, development or effect to the extent resulting from (A) actions or omissions of the Company or any Company Subsidiary expressly required or contemplated by the terms of this Agreement, (B) changes after the date hereof in general economic conditions in the United States, including financial market volatility or downturns, or in the markets in which the Company and the Company Subsidiaries operate, (C) changes after the date hereof affecting the banking industry generally, (D) any changes after the date hereof in applicable Laws or accounting rules or principles, including changes in GAAP, (E) changes in the market price or trading volume of the Common Stock or the Company’s other outstanding securities (but not the underlying causes of such changes), (F) any epidemic, pandemic or disease outbreak (including the Covid-19 virus) including any worsening of such conditions; or (G) any failure by the Company or any of the Company Subsidiaries to meet any internal projections or forecasts with regard to the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole (but not the underlying causes of such failure), in each case to the extent that such circumstance, event, change, development or effect referred to in clauses (B), (C) and (D) do not have a disproportionate effect on the Company and the Company Subsidiaries compared to other participants in the industries or markets in which the Company and the Company Subsidiaries operate.

4

(b)          As used in this Agreement, the term “Previously Disclosed” (i) with regard to any Party, means information set forth in its Disclosure Schedule under Section references corresponding with the provision of this Agreement to which such information relates (including, in the case of the Company, information identified in the Company’s Disclosure Schedule); provided, however, that if such information is disclosed in such a way as to make its relevance or applicability to another provision of this Agreement reasonably apparent on its face, such information shall be deemed to be responsive to such other provision of this Agreement and (ii) with regard to the Company, includes information publicly disclosed by the Company in any reports, schedules, forms, statements and other documents filed or furnished by the Company under the Securities Act and the Exchange Act with the Securities and Exchange Commission (the “SEC”), including pursuant to Section 13(a) or 15(d) thereof, since December 31, 2017, in each case available prior to the date of this Agreement (excluding any risk factor disclosures contained in such documents under the heading “Risk Factors” and any disclosure of risks included in any “forward-looking statements” disclaimer or other statements that are similarly non-specific and are predictive or forward-looking in nature). Notwithstanding anything in this Agreement to the contrary, the mere inclusion of an item in a Disclosure Schedule shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

2.2        Representations

        and Warranties of the Company      Except as Previously Disclosed, the Company hereby represents and warrants to the Investor, as of the date of this Agreement and as of the Closing Date \(except for the representations and warranties
    that are as of a specific date, which are made as of that date\) that:

5

(a)        Organization and Authority.  Each of the Company and the Company Subsidiaries is a corporation or other entity duly organized and validly existing under the laws of the jurisdiction of its incorporation or organization. Each of the Company and the Company Subsidiaries is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, except where any failure to be so qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  Each of the Company and the Company Subsidiaries has the corporate or other organizational power and authority to own its properties and assets and to carry on its business as it is now being conducted.  The Company has Previously Disclosed correct and complete copies of the certificate of incorporation and bylaws (or similar governing documents) as amended through the date of this Agreement for the Company and Broadway Federal Bank, f.s.b. (the “Bank”).  The Company is duly registered with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) as a savings and loan holding company under the Savings and Loan Holding Company Act, as amended, 12 U.S.C. 1467a (the “SLHCA Act”).  As of the date hereof, the Company is a certified “community development financial institution” designated as such under the Community Development Banking and Financial Institutions Act of 1994, as amended (12 U.S.C. Sections 5311 et seq.) and its implementing regulations, as applicable (a “CDFI”).  Following the consummation of the Bank Merger, the Surviving Bank will apply to be designated as a CDFI.

(b)          Company Subsidiaries.  As of the date of this Agreement, the Company has Previously Disclosed a true, complete and correct list of each entity in which the Company, directly or indirectly, owns sufficient capital stock or holds a sufficient equity or similar interest such that it is consolidated with the Company in the financial statements of the Company or has the power to elect a majority of the board of directors or other persons performing similar functions (each, a “Company Subsidiary” and, collectively, the “Company Subsidiaries”).

    Except for the Company Subsidiaries and as Previously Disclosed, the Company does not own beneficially or control, directly or indirectly, more than 5% of any class of equity securities or similar interests of any corporation, bank, business trust,
    association or similar organization, and is not, directly or indirectly, a partner in any general partnership or party to any joint venture or similar arrangement.  The Company owns, directly or indirectly, all of its interests in each Company
    Subsidiary free and clear of any and all Liens.  No equity security of any Company Subsidiary is or may be required to be issued by reason of any option, warrant, scrip, preemptive right, right to subscribe to, gross-up right, call or commitment of
    any character whatsoever relating to, or security or right convertible into, shares of any capital stock or other interest of such Company Subsidiary, and there are no contracts, commitments, understandings or arrangements by which any Company
    Subsidiary is bound to issue additional shares of its capital stock or other interest, or any option, warrant or right to purchase or acquire any additional shares of its capital stock.  The deposit accounts of the Bank are insured by the Federal
    Deposit Insurance Corporation \(“FDIC”\) to the fullest extent permitted by the Federal Deposit Insurance Act, as amended, and the rules and regulations of the FDIC thereunder, and all premiums and
    assessments required to be paid in connection therewith have been paid when due \(after giving effect to any applicable extensions\). The Company beneficially owns all of the outstanding capital securities of, and has sole control of, the Bank.

(c)           Capitalization.

(i)         Except as set forth on the Disclosure Schedule, as of the date hereof, the authorized Capital Stock of the Company consists of 50,000,000 shares of Voting Common Stock, par value $0.01 per share (“Voting Common Stock”), 25,000,000 shares of Non-Voting Common Stock, par value $0.01 (“Non-Voting Common Stock”), and 1,000,000 shares of preferred stock, par value $0.01 (“Preferred Stock”).

6

(ii)        As of the date hereof, before giving effect to the transaction provided for herein, the Merger Transactions and the Concurrent Other Transactions the Company has issued and outstanding: (i) 19,281,758 of shares of Voting Common Stock, including 556,169 shares of Voting Common Stock granted in respect of outstanding restricted stock awards, (ii) 1,637,902 shares of Voting Common Stock held by the trust for the Broadway Federal Bank, f.s.b. Employee Stock Ownership Plan, and (iii) 8,756,396 shares of Non-Voting Common Stock.

(iii)        As of the date hereof, other than in respect of awards outstanding under or issuable pursuant to the Company’s 2008 Long-Term Incentive Plan (the “Company

        Stock Plan”\) consisting of options to purchase an aggregate of 450,000 shares of common stock, and except in connection with this Agreement and the transactions contemplated hereby, the Merger Agreement and the Concurrent Other
    Transactions, the Company has not \(A\) agreed to issue or authorized the issuance after the date hereof of any shares of Common Stock or Preferred Stock, or any securities convertible into or exchangeable or exercisable for shares of Common Stock or
    Preferred Stock, \(B\) reserved for issuance any shares of Capital Stock of the Company or \(C\) repurchased or redeemed, or agreed to or authorized the repurchase or redemption of, any shares of Capital Stock of the Company.

(iv)       All of the issued and outstanding shares of Capital Stock of the Company have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, except for the preemptive rights granted to certain institutional stockholders of the Company identified on Schedule 2.2(c)(iv) of the Company’s Disclosure Schedule.  None of the outstanding shares of Capital Stock or other securities of the Company or any of the Company Subsidiaries was issued, sold or offered by the Company or any Company Subsidiary in violation of the Securities Act of 1933, as amended (the “Securities Act”) or the securities or blue sky laws of any state or jurisdiction, or in violation of any agreement, arrangement or commitment to which the Company was or is a party or subject, or in violation of any preemptive or similar rights of any Person.  No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which the stockholders of the Company may vote (“Voting Debt”) are issued and outstanding.

(v)        As of the date of this Agreement, except for the outstanding awards under the Company Stock Plan, the Company does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of, or securities or rights convertible into or exchangeable or exercisable for, any shares of Capital Stock or Voting Debt of the Company.

(d)           Authorization; No Conflicts.

(i)          The Company has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The Board of Directors has approved the transactions contemplated by this Agreement.  This Agreement has been duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery by the Investor, is the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles (whether applied in equity or at law).

7

(ii)        Neither the execution and delivery by the Company of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by the Company with any of the provisions hereof, will, with or without the passage of time and giving of notice, (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any liens, charges, adverse rights or claims, pledges, covenants, title defects, security interests or other encumbrances of any kind (“Liens”) upon any of the properties or assets of the Company or any Company Subsidiary, under any of the terms, conditions or provisions of (1) the certificate of incorporation or bylaws (or similar governing documents) of the Company and each Company Subsidiary or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any of the Company Subsidiaries is a party or by which it may be bound, or to which the Company or any of the Company Subsidiaries, or any of the properties or assets of the Company or any of the Company Subsidiaries may be subject, or (B) violate any Law applicable to the Company or any of the Company Subsidiaries or any of their respective properties or assets except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(e)        Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of this Agreement or for the sale by the Company of Common Stock to the Investor pursuant to this Agreement.

(f)         Litigation and Other Proceedings.  Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, or as would not reasonably be expected to adversely impact the reputation of the Company, the Company Subsidiaries or their respective investors in any material respect, there is no pending or, to the Knowledge of the Company, threatened claim, action, suit, arbitration, complaint, charge or investigation or proceeding (each an “Action”) against the Company or any Company Subsidiary or any of their respective assets, rights or properties, nor is the Company or any Company Subsidiary a party or named as subject to the provisions of any order, writ, injunction, settlement, judgment or decree of any court, arbitrator or government agency, or instrumentality.  There has not been, and to the Knowledge of the Company, there is not pending or contemplated, any investigation or other Action by the SEC involving the Company or any current or former director or officer of the Company in his or her capacity as such.

8

(g)          Financial Statements.  The audited consolidated balance sheets of the Company and the Company Subsidiaries and the related consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2019 and the unaudited consolidated balance sheets of the Company and the Company Subsidiaries and the related unaudited consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s quarterly reports on Form 10-Q filed with the SEC for the quarterly period ending September 30, 2020 (the “Company Financial Statements”) (i) have been prepared from, and are in accordance with, the books and records of the Company and the Company Subsidiaries, (ii) complied, as of the date of such filing, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, (iii) have been prepared in accordance with GAAP applied on a consistent basis and (iv) present fairly in all material respects the consolidated financial position of the Company and the Company Subsidiaries at the dates and the consolidated results of operations, changes in stockholders’ equity and cash flows of the Company and the Company Subsidiaries for the periods stated therein.

(h)         Reports.  Since December 31, 2017, the Company and each Company Subsidiary have filed all material reports, registrations, documents, filings, statements and submissions, together with any required amendments thereto, that they were required to file with any Governmental Entity, including all those required under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof (the foregoing, collectively, being referred to herein as the “Company Reports”) and have paid all material fees and assessments due and payable in connection therewith.  As of their respective filing dates, or as subsequently amended prior to the date hereof, the Company Reports complied in all material respects with all statutes and applicable rules and regulations of the applicable Governmental Entities.  As of the date of this Agreement, there are no outstanding comments from the SEC or any other Governmental Entity with respect to any Company Report that were the subject of written correspondence that have not been resolved.  The Company Reports, including the documents incorporated by reference in each of them, each contained all the information required to be included in it and, when it was filed and, as of the date of each such Company Report filed with the SEC, or if amended prior to the date of this Agreement, as of the date of such amendment, did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in it, in light of the circumstances under which they were made, not misleading and complied as to form in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  No executive officer of the Company has failed in any respect to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002.

9

(i)          Internal Accounting and Disclosure Controls.  The records, systems, controls, data and information of the Company and the Company Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of the Company or the Company Subsidiaries (including all means of access thereto and therefrom) or reputable banking industry service providers, except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have an adverse effect on the system of internal accounting controls described below in this Section 2.2(i).  The Company (i) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) intended to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known to the chief executive officer and the chief financial officer of the Company by others within those entities, and (ii) has disclosed, based on its most recent evaluation prior to the date of this Agreement, to the Company’s outside auditors and the audit committee of the Board of Directors (A) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information, and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.  As of the date of this Agreement, the Company has no Knowledge of any reason that its outside auditors and its chief executive and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when due.  Since December 31, 2017, neither the Company nor any Company Subsidiary nor, to the Knowledge of the Company, any director, officer, employee, auditor, accountant or representative of the Company or any Company Subsidiary has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any Company Subsidiary or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any Company Subsidiary has engaged in questionable accounting or auditing practices.

(j)            Data Privacy.

(i)       The Company and the Company Subsidiaries have taken commercially reasonable steps consistent with customary industry practices to protect the confidentiality, integrity, availability and security of the computers, servers, workstations, routers, hubs, switches, circuits, networks and other information technology equipment owned or controlled by them or by any third party and material to the Company and the Company Subsidiaries (the “Company IT Assets”) (and all information and transactions stored or contained therein or transmitted thereby) against any unauthorized use, access, interruption, modification or corruption, and there has been no unauthorized use, access, interruption, modification or corruption of the Company IT Assets.

10

(ii)        In connection with their receipt, purchase, collection, securing, safeguarding, storage, transfer (including any transfer across national borders), disclosure, destruction/disposal, and/or use or other processing of any Personal Information, each of the Company and the Company Subsidiaries, is and has been, in material compliance with all Privacy Laws, their respective privacy policies and the requirements of any contract or codes of conduct to which any of the Company or the Company Subsidiaries is a party.  The privacy policies of the Company are customary for the industry in which the Company operates.  The Company and the Company Subsidiaries have commercially reasonable and appropriate physical, technical, organizational, and administrative security measures and policies in place designed to protect all Personal Information collected by them or on their behalf from and against unauthorized access, use, interruption, modification, corruption, and/or disclosure.  The Company and the Company Subsidiaries have binding written agreements obligating (in accordance with and as required by Privacy Laws (as applicable)) all third parties collecting, accessing, receiving, storing or processing Personal Information on behalf of the Company and the Company Subsidiaries to (i) comply with all applicable Privacy Laws, (ii) take commercially reasonable and appropriate steps to protect and secure such Personal Information from and against unauthorized access, use interruption, modification, corruption, and/or disclosure which are no less stringent than those applied by the Company and the Company Subsidiaries and (iii) promptly notify the Company and the Company Subsidiaries of any unauthorized access, use interruption, modification, corruption, and/or disclosure of Personal Information or Company IT Assets processing Personal Information.  The Company and the Company Subsidiaries are, and since December 31, 2017, have been, in compliance in all material respects with all Privacy Laws and any other applicable Laws in all relevant jurisdictions relating to data loss, theft and breach of security notification obligations.  Since December 31, 2017, none of the Company or any of the Company Subsidiaries has experienced a material breach of its information technology systems or a data loss or theft as defined by the Laws in all relevant jurisdictions.  None of the Company or any of the Company Subsidiaries has been charged with, or received any notice of any claims of, the violation in any material respect of any Privacy Laws or any of their respective privacy policies.  The consummation of the transactions contemplated hereby will not breach or otherwise cause any violation of any Privacy Law.

(iii)        For the purposes of this Section 2.2(j):

(1)          “Personal Information” means, in addition to any definition provided by applicable law or by the Company and the Company Subsidiaries in any of their respective privacy policies, contracts, or other public-facing statements for any similar term (e.g., “personally identifiable information” or “PII”), all information identifying, regarding or capable of being associated with an individual person or device.  Personal Information may relate to any individual, including a current, prospective or former client (or a client’s customer or end user) or employee of any Person, and includes information in any form, including paper, electronic and other forms.

(2)          “Privacy Laws” means all applicable laws, legal requirements, and self-regulatory guidelines and principles relating to privacy, data security, and Personal Information and similar applicable consumer protection laws, including with respect to the receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security, disposal, destruction, disclosure or transfer of Personal Information and any and all applicable laws governing breach notification in connection with Personal Information.  As used in this Agreement, “Privacy Laws” shall include the California Consumer Privacy Act, General Data Protection Regulation and the rules and regulations promulgated thereunder, and applicable state laws.

(k)         No Undisclosed Liabilities.  There are no liabilities of the Company or any of the Company Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, except for (i) liabilities adequately reflected or reserved against in accordance with GAAP in the Company’s audited balance sheet as of December 31, 2019 and (ii) liabilities that have arisen in the ordinary and usual course of business and consistent with past practice since December 31, 2019 and that have not or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

11

(l)          Mortgage Lending.  The Company and each of the Company Subsidiaries have complied in all material respects with, and all documentation in connection with the origination, processing, underwriting and credit approval of any mortgage loan originated, purchased or serviced by the Company or any Company Subsidiary has satisfied, in all material respects (i) all Laws with respect to the origination, insuring, purchase, sale, servicing, or filing of claims in connection with mortgage loans, including all Laws relating to real estate settlement procedures, consumer credit protection, truth in lending laws, usury limitations, fair housing, transfers of servicing, collection practices, equal credit opportunity and adjustable rate mortgages, (ii) the responsibilities and obligations relating to mortgage loans set forth in any agreement between the Company and any Agency, Loan Investor or Insurer, (iii) the applicable rules, regulations, guidelines, handbooks and other requirements of any Agency, Loan Investor or Insurer and (iv) the terms and provisions of any mortgage or other collateral documents and other loan documents with respect to each mortgage loan.

(m)        Bank Secrecy Act; Anti-Money Laundering; OFAC; and Customer Information.  The Company is not aware of, has not been advised of, and, to the Knowledge of the Company, has no reason to believe that any facts or circumstances exist that would cause it or any Company Subsidiary to be deemed to be not operating in compliance, in all material respects, with the Bank Secrecy Act of 1970, as amended, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (also known as the USA PATRIOT Act), any order or regulation issued by the Treasury’s Office of Foreign Assets Control (“OFAC”), or any other applicable anti-money laundering or anti-terrorist-financing statute, rule or regulation.  The Company is not aware of any facts or circumstances that would cause it to believe that any nonpublic customer information has been disclosed to or accessed by an unauthorized third party in a manner that would cause it to undertake any material remedial action.  The Company and each of the Company Subsidiaries have adopted and implemented an anti-money laundering program that contains adequate and appropriate customer identification verification procedures that comply with the USA PATRIOT Act and such anti-money laundering program meets the requirements in all material respects of Section 352 of the USA PATRIOT Act and the regulations thereunder, and they have complied in all respects with any requirements to file reports and other necessary documents as required by the USA PATRIOT Act and the regulations thereunder.  The Company will not directly or indirectly use the proceeds of the sale of the Common Stock pursuant to transactions contemplated by this Agreement, or lend, contribute or otherwise make available such proceeds to any Company Subsidiary, joint venture partner or other Person, towards any sales or operations in any country appearing on the OFAC Specially Designated Nationals List (“SDN List”) or for the purpose of financing the activities of any Person currently appearing on the SDN List.

12

(n)          Certain Payments.  Neither the Company nor any of the Company Subsidiaries, nor any directors or officers of the Company, nor to the Knowledge of the Company, employees or any Affiliates of the Company or the Company Subsidiaries or any other Person who to the Knowledge of the Company is associated with or acting on behalf of the Company or any of the Company Subsidiaries has directly or indirectly (i) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment in material violation of any Law, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable anti-bribery or anti-corruption laws, to any Person, private or public, regardless of form, whether in money, property, or services (A) to obtain favorable treatment in securing business for the Company or any of the Company Subsidiaries, (B) to pay for favorable treatment for business secured by the Company or any of the Company Subsidiaries, or (C) to obtain special concessions or for special concessions already obtained, for or in respect of the Company or any of the Company Subsidiaries or (ii) established or maintained any fund or asset with respect to the Company or any of the Company Subsidiaries that was required by Law or GAAP to have been recorded and was not recorded in the books and records of the Company or any of the Company Subsidiaries.  Neither the Company nor any Company Subsidiaries has conducted any internal investigation, made any voluntary, directed, or involuntary disclosure to any Governmental Entity, or received any audit report, written communication from a Governmental Entity, or whistleblower or other written complaint, involving alleged violations in any material respect of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable anti-bribery or anti-corruption laws on the part of the Company, any of the Company Subsidiaries, or any Person acting on behalf of the Company or any of the Company Subsidiaries.

(o)          Absence of Certain Changes.  Since December 31, 2019 and except as Previously Disclosed or as required or contemplated by the terms of this Agreement, (i) the Company and the Company Subsidiaries have conducted their respective businesses in all material respects in the ordinary and usual course of business consistent with past practices, (ii) through (and including) the date of this Agreement, no fact, event, change, condition, development, circumstance or effect has occurred that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (iii) no material default (or event which, with notice or lapse of time, or both, would constitute a material default) exists on the part of the Company or any Company Subsidiary in the due performance and observance of any term, covenant or condition of any agreement to which the Company or any Company Subsidiary is a party and which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(p)           Compliance with Laws.

(i)          The Company, each Company Subsidiary and each of their officers, agents, representatives and employees possesses, holds and have all material permits, licenses, franchises, authorizations, orders, consents, registrations, accreditations and approvals of, and have made all filings, applications and registrations with, Governmental Entities that are required in order to permit the Company and each Company Subsidiary to own or lease their properties and assets and to carry on their business as presently conducted and that are material to the business of the Company and each Company Subsidiary (collectively, the “Governmental Authorizations”).  The Company and the Company Subsidiaries, and to the Company’s Knowledge, their respective officers, agents, representatives and employees, are not in default under any of such Governmental Authorizations, which default(s) would be, or be reasonably expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries (taken as a whole).  The Company and each Company Subsidiary have complied with and (A) are not, and since December 31, 2017, have not been, in default or violation in any respect of, (B) are not under investigation with respect to, and (C) have not been threatened to be charged with or given notice of any material violation of, any applicable material domestic (federal, state or local) or foreign law, statute, ordinance, license, rule, regulation, policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental Entity (each, a “Law”),

    other than such noncompliance, defaults or violations as would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries \(taken as a whole\).  No Governmental Entity has placed any
    material restriction on the business or properties of the Company or any of the Company Subsidiaries.  As of the date hereof, the Bank has a Community Reinvestment Act rating of “outstanding.”

13

(ii)         Except for normal examinations conducted by a Governmental Entity in the ordinary course of business of the Company and the Company Subsidiaries, (A) no Governmental Entity has initiated or has pending any proceeding or, to the Knowledge of the Company, investigation into the business or operations of the Company or any of the Company Subsidiaries since December 31, 2017, (B) there is no unresolved violation or exception by any Governmental Entity with respect to any report or statement relating to any examinations or inspections of the Company or any of the Company Subsidiaries, and (C) there have been no formal or informal inquiries by, or disagreements or disputes with, any Governmental Entity with respect to the business, operations, policies or procedures of the Company or any of the Company Subsidiaries since December 31, 2017, in each case of clauses (A) through (C), which would reasonably be expected, individually or in the aggregate, to be material to the Company and the Company Subsidiaries (taken as a whole).

(iii)       The Company and the Company Subsidiaries are not, and since December 31, 2017, have not been, in violation or default of any provisions of their respective certification of incorporation or bylaws (or similar governing documents).

(q)        Adequate Capitalization.  As of September 30, 2020, the Bank met or exceeded the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.  As of the Closing and after giving effect to this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions, the Bank meets or exceeds the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.

(r)         Agreements with Regulatory Agencies.  The Company and the Company Subsidiaries (A) are not subject to any cease-and-desist or other similar order or enforcement action issued by, (B) are not a party to any written agreement, consent agreement or memorandum of understanding with, (C) are not a party to any commitment letter or similar undertaking to, and (D) are not subject to any capital directive by, and since December 31, 2019, neither the Company nor any of the Company Subsidiaries has adopted any board resolutions at the request of any Governmental Entity that currently restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its liquidity and funding policies and practices, its ability to pay dividends, its credit, risk management or compliance policies, its internal controls, its management or its operations or business, nor has the Company nor any of the Company Subsidiaries been advised since December 31, 2019 by any Governmental Entity that it is considering issuing, initiating, ordering, or requesting any of the same.

14

(s)          Insurance.  The Company and each of the Company Subsidiaries are presently insured, and have been insured for at least the past two years, for reasonable amounts with financially sound and reputable insurance companies against such risks as companies engaged in a similar business would, in accordance with good business practice, customarily be insured.  All of the policies, bonds and other arrangements providing for the foregoing (the “Company Insurance Policies”) are in full force and effect, the premiums due and payable thereon have been or will be timely paid through the Closing Date, and there is no material breach or default (and no condition exists or event has occurred that, with the giving of notice or lapse of time or both, would constitute such a material breach or default) by the Company or any of the Company Subsidiaries under any of the Company Insurance Policies or, to the Knowledge of the Company, by any other party to the Company Insurance Policies.  Neither the Company nor any of the Company Subsidiaries has received any written notice of cancellation or non-renewal of any Company Insurance Policy nor, to the Knowledge of the Company, is the termination of any such policies threatened in writing by the insurer, and there is no material claim for coverage by the Company, or any of the Company Subsidiaries, pending under any of such Company Insurance Policies as to which coverage has been denied or disputed by the underwriters of such Company Insurance Policies or in respect of which such underwriters have reserved their rights.

(t)           Title.  The Company and the Company Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and valid title to all material personal property owned by them, in each case free and clear of all Liens, except for Liens which do not materially affect the value of such property or do not interfere with the use made and proposed to be made of such property by the Company or any Company Subsidiary.  Any real property and facilities held under lease by the Company or the Company Subsidiaries are leased pursuant to valid, subsisting and enforceable leases with such exceptions that are not material and do not interfere with the use made and proposed to be made of such property and facilities by the Company or the Company Subsidiaries.

(u)        Intellectual Property.  The Company and the Company Subsidiaries own or possess adequate rights or licenses to use all trademarks, service marks and all applications and registrations therefor, trade names, patents, patent rights, copyrights, original works of authorship, inventions, trade secrets and other intellectual property rights (collectively, “Intellectual Property Rights”) used in their businesses as conducted on the date of this Agreement, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  To the Knowledge of the Company, no product or service of the Company or the Company Subsidiaries infringes the Intellectual Property Rights of others.

15

(v)          Employee Benefits.

(i)          Section 2.2(v) of the Disclosure Schedule sets forth a correct and complete list of each “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including, without limitation, multiemployer plans within the meaning of Section 3(37) of ERISA), and all stock purchase, stock option, severance, employment, change-in-control, fringe benefit, bonus, incentive, deferred compensation and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transactions contemplated by this Agreement or otherwise), whether formal or informal, oral or written, under which (A) any current or former employee or director of the Company or any of the Company Subsidiaries (the “Company Employees”) has any present or future right to benefits and which are contributed to, sponsored by or maintained by the Company or any of the Company Subsidiaries or (B) the Company or any Company Subsidiary has had or has any present or future liability. All such plans, agreements, programs, policies and arrangements are collectively referred herein to as the “Benefit

        Plans.”

(ii)         (A) Each Benefit Plan has been established and administered in all material respects in accordance with its terms, and in compliance with the applicable provisions of ERISA, the Code and other Laws; (B) no “reportable event” (as such term is defined in Section 4043 of ERISA) that could reasonably be expected to result in material liability has occurred with respect to any Benefit Plan, and (C) no non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) has been engaged in by the Company or any Company Subsidiary with respect to any Benefit Plan that has or is expected to result in any material liability or “accumulated funding deficiency” (as such term is defined in Section 302 of ERISA and Section 412 of the Code (whether or not waived)).

(iii)       The Company and the Company Subsidiaries will be in compliance, as of the Closing Date, with Sections 111 and 302 of the Emergency Economic Stabilization Act of 2008, as amended by the U.S. American Recovery and Reinvestment Act of 2009, including all guidance issued thereunder by a Governmental Entity (collectively “EESA”).

(iv)       None of the Company or any Company Subsidiary or any trade or business, whether or not incorporated (an “ERISA Affiliate”), all of which together with the Company or any Company Subsidiary would be deemed a “single employer” within the meaning of Section 4001 of ERISA, has, at any time during the last six years, contributed to or been obligated to contribute to any plan that is (i) subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code or (ii) a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA (a “Multiemployer Plan”) or a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA; and none of Company and the Company Subsidiaries nor any of their respective ERISA Affiliates has incurred any liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as those terms are defined in Part I of Subtitle E of Title IV of ERISA.

(v)         Neither the Company nor any Company Subsidiary has any material unfunded liabilities existing under or in connection with any Benefit Plan, and each such Benefit Plan has been established and administered in all respects in accordance with its terms, and in compliance with applicable law, except where failure to be in compliance would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.

16

(vi)        Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby could (either alone or in conjunction with any other event) reasonably be expected to result in, cause the accelerated vesting, funding or delivery of, or increase the amount or value of, any payment or benefit to any employee, officer or director of the Company or any Company Subsidiary.

(w)        Taxes.  All material Tax Returns required to be filed by, or on behalf of, the Company or the Company Subsidiaries have been timely filed, or will be timely filed, in accordance with all Laws, and all such Tax Returns are, or will be at the time of filing, complete and correct in all material respects.  The Company and the Company Subsidiaries have timely paid all material Taxes due and payable (whether or not shown on such Tax Returns), or, where payment is not yet due, have made adequate financial statement provisions therefor in accordance with GAAP.  There are no Liens with respect to Taxes upon any of the assets or properties of either the Company or the Company Subsidiaries other than with respect to Taxes not yet due and payable.  As of the date of this Agreement, there are not pending or threatened in writing, any audits, examinations, investigations or other proceedings initiated by the Internal Revenue Service in respect of U.S. federal income tax matters.  None of the Company or any of the Company Subsidiaries has been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the date hereof that was purported or intended to be governed by Section 355 of the Code (or any similar provision of state, local or foreign Law).  The Company and each Company Subsidiary is, and has been since the date of its formation, a corporation for U.S. federal income tax purposes, and neither the Company nor any Company Subsidiary has elected pursuant to the Code to be treated as a Subchapter S corporation pursuant to Section 1362(a) of the Code, nor has it made any other elections pursuant to the Code (other than elections that relate solely to methods of accounting, depreciation or amortization) that would have, or be reasonably expected to result in, individually or in the aggregate, a Material Adverse Effect.

(x)           Labor.

(i)         Employees of the Company and the Company Subsidiaries are not represented by any labor union nor are any collective bargaining agreements otherwise in effect with respect to such employees.  No labor organization or group of employees of the Company or any Company Subsidiary has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions presently pending or threatened to be brought or filed with the National Labor Relations Board or any other labor relations tribunal or authority, nor have there been in the last three years.  There are no strikes, work stoppages, slowdowns, labor picketing lockouts, material arbitrations or material grievances, or other material labor disputes pending or, to the Knowledge of the Company, threatened against or involving the Company or any Company Subsidiary, nor have there been any in the past year.

(ii)        Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company and the Company Subsidiaries are in compliance with all federal and state Laws and requirements respecting employment and employment practices, terms and conditions of employment, collective bargaining, disability, immigration, health and safety, wages, hours and benefits, non-discrimination in employment, workers’ compensation and the collection and payment of withholding and/or payroll taxes and similar taxes.

17

(iii)      There is no charge or complaint pending or threatened before any Governmental Entity alleging unlawful discrimination in employment practices, unfair labor practices or other unlawful employment practices by the Company or any Company Subsidiary.

(iv)        To the Knowledge of the Company, since December 31, 2017, (i) no allegations of sexual harassment or misconduct have been made against (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000, and (ii) neither the Company nor any of the Company Subsidiaries has entered into any settlement agreements related to allegations of sexual harassment or misconduct by (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000.

(y)         Brokers and Finders.  Except as Previously Disclosed, neither the Company nor any of its officers, directors, employees or agents has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Company in connection with this Agreement or the transactions contemplated hereby, the fees of which would be payable by the Investor.

(z)           Offering of Securities.

(i)          Neither the Company nor any Person acting on its behalf has taken any action (including any offering of any securities of the Company under circumstances which would require the integration of such offering with the offering of any of the Shares to be issued pursuant to this Agreement under the Securities Act and the rules and regulations of the SEC promulgated thereunder) which would subject the offering, issuance or sale of any of the Shares to be issued pursuant to this Agreement to be subject to the registration requirements of the Securities Act.

(ii)         The Company is not disqualified from relying on Rule 506 of Regulation D (“Rule 506”) under the Securities Act for any of the reasons stated in Rule 506(d) (each such reason, a “Disqualification Event”) in connection with the issuance and sale of the Shares to the Investor.  The Company has furnished the Investor, a reasonable time prior to the date hereof, a description in writing of any matters that would have triggered disqualification under Rule 506(d) but which occurred before September 23, 2013, in each case, in compliance with the disclosure requirements of Rule 506(e).

18

(aa)        Affiliate Transactions.  No officer, director, five percent (5%) stockholder or other Affiliate of the Company (or any Company Subsidiary), or any individual who, to the Knowledge of the Company, is related by marriage or adoption to or shares the same home as any such Person, or any entity which, to the Knowledge of the Company, is controlled by any such Person (collectively, an “Insider”), is a party to any contract or transaction with the Company (or any Company Subsidiary) which pertains to the business of the Company (or any Company Subsidiary) or has any interest in any property, real or personal or mixed, tangible or intangible, used in or pertaining to the business of the Company or any Company Subsidiary.  The foregoing representation and warranty does not include deposit accounts of an Insider at the Company or any Company Subsidiary or loans of $250,000 or less made in the ordinary course of business to Insiders in compliance with Regulation O and other applicable Law.

(bb)      Private Placement.  Assuming the accuracy of the Investor’s representations and warranties set forth in Section 2.3 of this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investor.  Assuming the Stockholder Approval is obtained (if required), the issuance and sale of the Shares hereunder does not contravene the rules and regulations of the Nasdaq Stock Market.

(cc)        Listing and Maintenance Requirements.  The Company’s Voting Common Stock is (and at the Closing, the Class A Common Stock will be) registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to terminate the registration of the Voting Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received written notice from the Nasdaq Stock Market to the effect that the Company is not in compliance with the listing or maintenance requirements of the Nasdaq Stock Market.

(dd)        Investment Company.  Neither the Company nor any of the Company Subsidiaries is required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

(ee)         Acknowledgment Regarding the Investor’s Purchase of Shares.  The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby.  The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions and any advice given by the Investor or any of its representatives or agents in connection with this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions is merely incidental to Investor’s purchase of the Shares.

(ff)         No General Solicitation or General Advertising.  Neither the Company nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Shares.

(gg)        Shell Company Status.  The Company is not, and has never been, an issuer identified in Rule 144(i)(1) under the Securities Act.

19

(hh)        Valid Issuance of Shares.  The Shares sold and delivered in accordance with the terms hereof for the consideration expressed herein will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws.  Assuming the accuracy of the representations and warranties of the Investor set forth in Section 2.3, the Shares will be issued in compliance with all applicable federal and state securities laws.

2.3         Representations

        and Warranties of the Investor.   Except as Previously Disclosed, the Investor hereby represents and warrants to the Company, as of the date hereof and as of the Closing Date \(except for the representations and warranties that are as
    of a specific date which are made as of that date\) that:

(a)           [Intentionally Omitted]

(b)           Authorization; No Conflicts.

(i)        The Investor has the necessary legal capacity to execute and deliver this Agreement and to perform its obligations hereunder.    This Agreement has been duly and validly executed and delivered by the Investor and, assuming due authorization, execution and delivery by the Company is the valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

(ii)      Neither the execution, delivery and performance by the Investor of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by the Investor with any of the provisions hereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any Liens upon any of the properties or assets of the Investor under any of the terms, conditions or provisions of  any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Investor is a party or by which the Investor may be bound, or to which the Investor or any of the properties or assets of the Investor may be subject, or (B) violate any Law applicable to the Investor or any of its properties or assets, except in the case of clauses (A) and (B) for such violations, conflicts and breaches as would not reasonably be expected to materially adversely affect the Investor’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

(c)        Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of this Agreement or for the purchase by the Investor of the Shares pursuant to this Agreement.

20

(d)         Purchase for Investment; Accredited Investor Status; Pre-Existing Relationship.  The Investor acknowledges that the Shares to be purchased by the Investor pursuant to this Agreement have not been registered under the Securities Act or under any state securities laws and may not be resold or transferred by the Investor without such registration or appropriate reliance on any available exemption from such requirements.  The Investor (i) is acquiring the Shares pursuant to an exemption from the registration requirements of the Securities Act and other applicable securities laws solely for investment with no present intention to distribute any of the Shares to any Person, (ii) will not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, (iii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Shares and of making an informed investment decision and (iv) is an “accredited investor” (as that term is defined by Rule 501 under the Securities Act), (vi) is aware that the Company has entered into the Merger Agreement pursuant to which it is required to file with the SEC a Registration Statement on Form S-4 (the “Registration Statement”), and (vi) began discussions regarding the potential for the Investment by this Agreement with representatives of the Company before the Registration Statement was filed with the SEC and Investor’s purchase of the Shares was not solicited by the Registration or any other filing made by the Company with the SEC.

(e)          Brokers and Finders.  Neither the Investor, nor its Affiliates nor any of their respective officers or directors, has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Investor in connection with this Agreement or the transactions contemplated hereby.

(f)          Access to Information.  The Investor acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and the Company Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the Investment; and (iv) the opportunity to ask questions of management of the Company.

(g)         No Reliance.  The Investor has not relied on any representation or warranty made by any Person by or on behalf of the Company, including, without limitation, the Placement Agents, in connection with the Investment other than those contained in this Agreement.

(h)        Placement Agents.  The Investor acknowledges that the Placement Agents have not performed any due diligence review on behalf of the Investor.  Furthermore, the Investor will purchase the Shares directly from the Company and not from the Placement Agents and understands that neither the Placement Agents nor any other broker or dealer has any obligation to make a market in the Common Stock.

21

(i)          Accuracy of Representations.  The Investor understands that each of the Placement Agents and the Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements in connection with the transactions contemplated by this Agreement and agrees that if any of the representations or acknowledgements made by it are no longer accurate as of the Closing Date, or if any of the agreements made by it are breached on or prior to the Closing Date, it shall promptly notify the Placement Agents and the Company.

ARTICLE 3.

COVENANTS

3.1        Conduct

        of Business Prior to Closing.  Except as otherwise expressly required or contemplated by this Agreement or applicable Law, or with the prior written consent of the Investor, between the date of this Agreement and the Closing, the
    Company shall, and the Company shall cause each Company Subsidiary to:

(a)           use commercially reasonable efforts to conduct its business only in the ordinary course of business consistent with past practice; and

(b)          use commercially reasonable efforts to (i) preserve the present business operations, organization (including officers and employees) and goodwill of the Company and any Company Subsidiary and (ii) preserve business relationships with customers, suppliers, consultants and others having business dealings with the Company; provided, however, that nothing in this clause (b) shall place any limit on the ability of the Board of Directors to act in accordance with, or require any actions that the Board of Directors may, in good faith, determine to be inconsistent with, its duties or the Company’s obligations under applicable Law or imposed by any Governmental Entity.

3.2          Use of Proceeds.

      The proceeds received by the Company from the sale of the Shares contemplated hereunder \(net of any applicable costs and expenses\) will be used for general corporate purposes and will not use such proceeds to
    repurchase, redeem or otherwise monetize any interests held by other existing shareholders of the Company or any Company Subsidiary.

3.3          Regulatory Filings.  The Company shall make all filings pursuant to any applicable state securities laws and Regulation D of the Securities Act that are required to be made in connection with the Closing.

3.4       Confidentiality.

    The Investor acknowledges that the information being provided to it in connection with the transactions contemplated hereby includes confidential information that has not been publicly disclosed and agrees to maintain the confidentiality of the
    information with the same degree of care that it uses to protect its own confidential information.

22

3.5         Publicity.   The Company shall not publicly disclose the financial or other terms of the transactions contemplated hereby or the name of any Investor or any Affiliate or investment adviser of any Investor, or include the name of any Investor or any Affiliate or investment adviser of any Investor in any press release or filing with the SEC or the Nasdaq Stock Market and shall not use any names, trademarks, service marks or trade names of the Investor or its Affiliates in any form of advertising and publicity or public statements, without the prior written consent of such Investor, except (i) as required by federal securities law in connection with the filing of final transaction documents with the SEC or (ii) to the extent such disclosure is required by applicable law, at the request of the staff of the SEC or at the request of the Nasdaq Stock Market regulations, in which case the Company shall provide each such Investor with prior written notice of such disclosure and the form of such disclosure shall be subject to the approval of such Investor, such approval not to be unreasonably withheld or delayed.

3.6         Commercially

        Reasonable Effort.   Upon the terms and subject to the conditions herein provided, except as otherwise provided in this Agreement, each of the Parties hereto agrees to use its commercially reasonable efforts to take or cause to be
    taken all action, to do or cause to be done and to assist and cooperate with the other Party in doing all things necessary, proper or advisable under applicable Laws to consummate and make effective the transactions contemplated hereby, including
    but not limited to: \(a\) the satisfaction of the conditions precedent to the obligations of the Parties; \(b\) the obtaining of applicable Governmental Consents, and consents, waivers and approvals of any other third parties; \(c\) defending of any
    claim, action, suit, investigation or proceeding, whether judicial or administrative, challenging this Agreement or the performance of the obligations hereunder; and \(d\) the execution and delivery of such instruments, and the taking of such other
    actions as the other Party may reasonably request in order to carry out the intent of this Agreement.  Notwithstanding the foregoing, under no circumstances will the Investor be required to disclose to the Company, the Company Subsidiaries or any
    third party any information the disclosure of which is prohibited by Law, nor shall it be required to agree to any restrictions, conditions or commitments imposed or otherwise required by any Government Entity that are determined by the Investor in
    its sole discretion to be unduly burdensome, other than customary passivity commitments, in order to consummate and make effective the transactions contemplated hereby.

3.7          Legend.

(a)           The Investor agrees that all certificates or other instruments representing the Shares subject to this Agreement shall bear legends substantially to the following effect, until such time as they are not required under Section 3.7(b)

“THE SHARES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.”

23

(b)          Upon request of the Investor, the Company shall promptly cause such legends to be removed from any certificate for any Shares to be so transferred if such Shares are being transferred pursuant to an exemption from the registration securities requirements of the Securities Act and applicable state Laws, subject to receipt by the Company of an opinion of counsel for the Investor reasonably satisfactory to the Company to the effect that such legend is no longer required under the Securities Act and applicable state Laws.  The Investor acknowledges that the sale of the Shares provided for herein has not been registered under the Securities Act or under any state securities Laws and agrees that it shall not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities Laws.

3.8         Exchange

        Listing.    The Company shall use its reasonable best efforts to cause the Shares to be approved for listing on the Nasdaq Stock Market as promptly as possible.

3.9        Authorized

        Shares.   The Company will at all times reserve, free of any preemptive or similar rights of stockholders of the Company, a number of unissued shares of Class A Common Stock, sufficient to convert automatically, in accordance with
    the terms of the certificate of incorporation of the Company, all of the shares of Class C Common Stock then outstanding.

3.10       Rule

        144 Reporting.   With a view to making available to the Investor the benefits of certain rules and regulations of the SEC which may permit the sale of the Shares by the Investor without registration under the Securities Act upon
    compliance with the initial holding period and other applicable requirements of Rule 144 under the Securities Act, the Company agrees to use its reasonable best efforts to:

(i)         make and keep adequate current public information with respect to the Company available, as those terms are understood and defined in Rule 144(c)(1) or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of this Agreement;

(ii)         so long as the Investor owns any of the Shares, furnish to the Investor forthwith upon request: (A) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 under the Securities Act, and of the Exchange Act; (B) a copy of the most recent annual or quarterly report of the Company; and (C) such other reports and documents as the Investor may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any of the Shares without registration; and

(iii)        to take such further action as the Investor may reasonably request, all to the extent required from time to time to enable the Investor to sell Shares without registration under the Securities Act.

24

ARTICLE 4.

TERMINATION

4.1          Termination.

    This Agreement may be terminated prior to the Closing:

(a)           by mutual written agreement of the Company and the Investor;

(b)        by either Party, upon written notice to the other Party in the event that the Closing does not occur on or before September 1, 2021; provided, however, that the right to terminate this Agreement pursuant to this Section 4.1(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;

(c)          by either Party, upon written notice to the other Party, in the event that (i) Stockholder Approval is required under applicable Law or the rules and regulations of the Nasdaq Stock Market, but has not been obtained on or prior to the closing date of the Merger or (ii) the Authorized Shares Increase Approval has not been obtained on or prior to the closing date of the Merger;

(d)         by the Investor, upon written notice to the Company, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Company in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(ii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in the absence of such breach or condition; provided that this Section 4.1(d) shall only apply if the Investor is not in material breach of any of the terms of this Agreement;

(e)          by the Company, upon written notice to the Investor, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Investor in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(iii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in absence of such breach or condition; provided that this Section 4.1(e) shall only apply if the Company is not in material breach of any of the terms of this Agreement; or

(f)          by any Party, upon written notice to the other Party, in the event that any Governmental Entity shall have issued any order, decree or injunction or taken any other action restraining, enjoining or prohibiting any of the transactions contemplated by this Agreement, and such order, decree, injunction or other action shall have become final and non-appealable.

4.2        Effects

        of Termination.   In the event of any termination of this Agreement as provided in Section 4.1, this Agreement \(other than Section 3.4, this Article 4 and Article 6 of this Agreement, which shall remain in full force and effect\)
    shall forthwith become wholly void and of no further force and effect; provided, that nothing herein shall relieve any Party from liability for fraud or willful breach of this Agreement.

25

ARTICLE 5.

INDEMNITY

5.1          Indemnification

        by the Company.

(a)         After the Closing, and subject to Sections 5.1(b), 5.3 and 5.4, the Company shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Investor and its Affiliates, and their respective successors and assigns, officers, directors, partners, members and employees, as applicable, (the “Investor Indemnified Parties”) against and from, and reimburse any of the Investor Indemnified Parties for, all Losses that any of the Investor Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Company in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by the Company to perform any of its covenants or agreements contained in this Agreement.  Notwithstanding anything herein to the contrary, the obligations of the Company under this Section 5.1(a) shall not be applicable to or inure to the benefit of any transferee of the Common Stock sold pursuant to this Agreement who is not an Affiliate of the Investor.

(b)        Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless any of the Investor Indemnified Parties against, or reimburse any of the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) (other than Losses arising out of the inaccuracy or breach of any Company Specified Representations) until the aggregate amount of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a) exceeds $100,000 (the “Threshold Amount”), upon the occurrence of which the Company shall be obligated for all of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a).  Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless the Investor Indemnified Parties against, or reimburse the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1.

(c)           For purposes of Section 5.1(a), in determining whether there has been a breach of a representation or warranty, the Parties hereto shall ignore any “materiality,” “Material Adverse Effect” or similar qualifications.

5.2          Indemnification by the Investor.

(a)         After the Closing, and subject to Sections 5.2(b), 5.3 and 5.4, the Investor shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Company and its respective Affiliates and their respective successors and assigns, officers, directors, partners, members, employees, representatives and agents (collectively, the “Company Indemnified Parties”) against and from, and reimburse any of the Company Indemnified Parties for, all Losses that the Company Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Investor in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by such Investor to perform any of its covenants or agreements contained in this Agreement.

26

(b)        Notwithstanding anything to the contrary contained herein, the Investor shall not be required to indemnify, defend or hold harmless any of the Company Indemnified Parties against, or reimburse any of the Company Indemnified Parties for any Losses pursuant to Section 5.2(a)(1) until the aggregate amount of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a) exceeds the Threshold Amount, upon the occurrence of which the Investor shall be obligated for all of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a)(1).  Notwithstanding anything to the contrary contained herein, the Investor shall not be required to indemnify, defend or hold harmless the Company Indemnified Parties against, or reimburse the Company Indemnified Parties for, any Losses pursuant to Section 5.2(a)(1) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1 hereof.

(c)          For purposes of Section 5.2(a), in determining whether there has been a breach of a representation or warranty, the Parties shall ignore any “materiality” or similar qualifications.

5.3          Notification of Claims.

(a)          Any Person that may be entitled to be indemnified under this Article 5 (the “Indemnified Party”) shall promptly notify the party or parties liable for such indemnification (the “Indemnifying Party”) in writing of any claim in respect of which indemnity may be sought hereunder, including any pending or threatened claim or demand by a third party that the Indemnified Party has determined has given or could reasonably give rise to a right of indemnification under this Agreement (including a pending or threatened claim or demand asserted by a third party against the Indemnified Party) (each, a “Third Party Claim”), describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or demand; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Agreement except to the extent that the Indemnifying Party is materially prejudiced by such failure.  The Parties agree that notices for claims in respect of a breach of a representation, warranty, covenant or agreement must be delivered prior to the expiration of any applicable survival period specified in Section 6.1 for such representation, warranty, covenant or agreement; provided, that if, prior to such applicable date, a Party hereto shall have notified the other Party hereto in accordance with the requirements of this Section 5.3(a) of a claim for indemnification under this Agreement (whether or not formal legal action shall have been commenced based upon such claim), such claim shall continue to be subject to indemnification in accordance with this Agreement notwithstanding the passing of such applicable date.

27

(b)         Upon receipt of a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) in respect of a Third Party Claim, the Indemnifying Party may, by notice to the Indemnified Party delivered within twenty (20) Business Days of the receipt of notice of such Third Party Claim, assume the defense and control of any Third Party Claim, with its own counsel reasonably acceptable to the Indemnified Party and at its own expense.  The Indemnified Party shall have the right to employ counsel on its own behalf for, and otherwise participate in the defense of, any such Third Party Claim, but the fees and expenses of its counsel will be at its own expense unless (A) the employment of counsel by the Indemnified Party at the Indemnifying Party’s expense has been authorized in writing by the Indemnifying Party, (B) the Indemnified Party reasonably believes there may be a conflict of interest between the Indemnified Party and the Indemnifying Party in the conduct of the defense of such Third Party Claim, (C) the Indemnified Party reasonably believes there are legal defenses available to it that are different from, additional to or inconsistent with those available to the Indemnifying Party, or (D) the Indemnifying Party has not in fact employed counsel to assume the defense of such Third Party Claim within a reasonable time after receipt of notice of the commencement of such Third Party Claim, in each of which cases the fees and expenses of such Indemnified Party’s counsel shall be at the expense of the Indemnifying Party; provided, however, that in the event that the Company is required to assume the fees and expenses of such Investor Indemnified Party’s counsel in accordance with the foregoing and such Investor Indemnified Party is similarly situated with any other “Investor Indemnified Party” under any of the other stock purchase agreements with respect to any Third Party Claim, and does not have any conflict of interest with such Person in the conduct of the defense of such Third Party Claim or have legal defenses available to it that are different from, additional to or inconsistent with those available to such Person, such Investor Indemnified Party shall be required to employ the same counsel as such Person and the Company shall be responsible for the fees and expenses of only one such counsel for such Investor Indemnified Party and such other Person or Persons (assuming any of clauses (A) through (D) above is satisfied).  The Indemnified Party may take any actions reasonably necessary to defend such Third Party Claim prior to the time that it receives a notice from the Indemnifying Party as contemplated by the immediately preceding sentence.  The Indemnified Party shall, and shall cause each of its Affiliates and representatives to, use reasonable best efforts to cooperate with the Indemnifying Party in the defense of any Third Party Claim.  The Indemnifying Party shall not, without the prior written consent of the Indemnified Party (which shall not be unreasonably withheld or delayed), consent to a settlement, compromise or discharge of, or the entry of any judgment arising from, any Third Party Claim, unless such settlement, compromise, discharge or entry of any judgment does not involve any statement, finding or admission of any fault, culpability, failure to act, violation of Law or admission of any wrongdoing by or on behalf of the Indemnified Party, and the Indemnifying Party shall (i) pay or cause to be paid all amounts arising out of such settlement or judgment concurrently with the effectiveness of such settlement or judgment (unless otherwise provided in such judgment), (ii) not encumber any of the assets of any Indemnified Party or agree to any restriction or condition that would apply to or materially adversely affect any Indemnified Party or the conduct of any Indemnified Party’s business and (iii) obtain, as a condition of any settlement, compromise, discharge, entry of judgment (if applicable), or other resolution, a complete and unconditional release of each Indemnified Party in form and substance reasonably satisfactory to such Indemnified Party from any and all liabilities in respect of such Third Party Claim.  An Indemnified Party shall not settle, compromise or consent to the entry of any judgment with respect to any claim or demand for which it is seeking indemnification from the Indemnifying Party or admit to any liability with respect to such claim or demand without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed); provided, that such consent shall not be required if the Indemnifying Party has not fulfilled any material obligations under this Section 5.3(b).

(c)         In the event any Indemnifying Party receives a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) that does not involve a Third Party Claim, the Indemnifying Party shall notify the Indemnified Party within twenty (20) Business Days following its receipt of such notice whether the Indemnifying Party disputes its liability to the Indemnified Party under this Agreement.  The Indemnified Party shall reasonably cooperate with and assist the Indemnifying Party in determining the validity of any such claim for indemnity by the Indemnified Party.

28

5.4         Indemnification

        Payment.   In the event a claim or any Action for indemnification hereunder has been finally determined, the amount of such final determination shall be paid by the Indemnifying Party to the Indemnified Party on demand in immediately
    available funds.  A claim or an Action, and the liability for and amount of damages therefor, shall be deemed to be “finally determined” for purposes of this Agreement when the Parties have so determined by mutual agreement or, if disputed,
    when a final non-appealable judicial order has been entered into with respect to such claim or Action.

5.5         Exclusive

        Remedies.  Each Party acknowledges and agrees that following the Closing, the indemnification provisions hereunder shall be the sole and exclusive remedies of the Parties for any breach of the representations, warranties or covenants
    contained in this Agreement.  No investigation of the Company by the Investor, or of the Investor by the Company, whether prior to or after the date of this Agreement, shall limit any Indemnified Party’s exercise of any right hereunder or be deemed
    to be a waiver of any such right.  The Parties agree that any indemnification payment made pursuant to this Agreement shall be treated as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

ARTICLE 6.

MISCELLANEOUS

6.1          Survival.

    The representations and warranties of the Parties contained in this Agreement shall survive in full force and effect until the date that is fifteen \(15\) months after the Closing Date \(or until final resolution of any claim or action arising from
    the breach of any such representation and warranty, if notice of such breach was provided prior to the end of such period\), at which time they shall terminate and no claims shall be made for indemnification under Section 5.1 or Section 5.2, as
    applicable, for breaches of representations or warranties thereafter, except the Company Specified Representations \(other than the representations and warranties made in Section 2.2\(v\), which shall survive until the expiration of the applicable
    statute of limitations\) and the Investor Specified Representations shall survive the Closing indefinitely.  The covenants and agreements set forth in this Agreement shall survive until the expiration of any applicable statute of limitations or
    until performed or no longer operative in accordance with their respective terms.  Notwithstanding the foregoing, the Company Specified Representations shall survive for the period of the applicable statute of limitations.

6.2          Other

        Definitions.   Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa, and references to any
    agreement, document or instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time.  In addition, the following terms shall have the meanings assigned to them below:

29

(a)        the term “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person provided that no security holder of the Company shall be deemed to be an Affiliate of any other security holder or of the Company or any of the Company Subsidiaries solely by reason of any investment in the Company and, for purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under 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 or policies of such Person, whether through the ownership of voting securities, by contract or otherwise;

(b)        the term “Agency” means the Federal Housing Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home Administration (now known as Rural Housing and Community Development Services), the Federal National Mortgage Association, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture or any other federal or state agency with authority to (i) determine any investment, origination, lending or servicing requirements with regard to mortgage loans originated, purchased or serviced by the Company or (ii) originate, purchase, or service mortgage loans, or otherwise promote mortgage lending, including state and local housing finance authorities;

(c)           the term “Board of Directors” means the Board of Directors of the Company;

(d)          the term “Business Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York or in the State of California generally are authorized or required by Law or other governmental actions to close;

(e)           the term “Capital Stock” means the capital stock or other applicable type of equity interest in a Person;

(f)           the term “Code” means the Internal Revenue Code of 1986, as amended;

(g)        the term “Company Specified Representations” means the representations and warranties made in Section 2.2(a), Section 2.2(b), Section 2.2(c), Section 2.2(d), Section 2.2(x), Section 2.2(z) and Section 2.2(hh);

(h)          the term “Disclosure Schedule” shall mean a schedule delivered, on or prior to the date of this Agreement, by (i) the Investor to the Company and (ii) the Company to the Investor setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in Section 2.2 with respect to the Company, or in Section 2.3 with respect to the Investor, or to one or more covenants contained in Article 3;

(i)            the term “GAAP” means United States generally accepted accounting principles and practices as in effect from time to time;

30

(j)        the term “Governmental Consent” means any notice to, registration, qualification, designation, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Entity, or the expiration or termination of any statutory waiting periods;

(k)        the term “Governmental Entity” means any court, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign, and any applicable industry self-regulatory organization or securities exchange;

(l)          the term “Insurer” means a Person who insures or guarantees for the benefit of the mortgagee all or any portion of the risk of loss upon borrower default on any of the mortgage loans originated, purchased or serviced by the Bank, including the Federal Housing Administration, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any private mortgage insurer, and providers of hazard, title or other insurance with respect to such mortgage loans or the related collateral;

(m)       the term “Investor Specified Representations” means the representations and warranties made in Section 2.3(b)(i), Section 2.3(d) and Section 2.3(f);

(n)          the term “Knowledge” of the Company and words of similar import mean the knowledge of any directors or executive officers of the Company listed on the Disclosure Schedule hereto;

(o)           the term “Loan Investor” means any Person (including an Agency) having a beneficial interest in any mortgage loan originated, purchased or serviced by the Bank or a security backed by or representing an interest in any such mortgage loan;

(p)         the term “Losses” means any and all losses, damages, reasonable costs, reasonable expenses (including reasonable attorneys’ fees and disbursements), liabilities, settlement payments, awards, judgments, fines, obligations, claims, and deficiencies of any kind, excluding special, consequential, exemplary and punitive damages;

(q)         the term “Person” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, Governmental Entity or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity;

(r)           the term “Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company or other entity (x) of which such Person or a Subsidiary of such Person is a general partner or (y) of which a majority of the voting securities or other voting interests, or 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;

31

(s)        the term “Tax” or “Taxes” means all United States federal, state, local or foreign income, profits, estimated, gross receipts, windfall profits, severance, property, intangible property, occupation, production, sales, use, license, excise, emergency excise, franchise, capital gains, capital stock, employment, withholding, transfer, stamp, payroll, goods and services, value added, alternative or add-on minimum tax, or any other tax, custom, duty or governmental fee, or other like assessment or charge of any kind whatsoever, together with any interest, penalties, fines, related liabilities or additions to tax that may become payable in respect thereof imposed by any Governmental Entity, whether or not disputed;

(t)          the term “Tax Return” means any return, declaration, report or similar statement required to be filed with respect to any Taxes (including any attached schedules), including, without limitation, any information return, claim or refund, amended return and declaration of estimated Tax;

(u)          the term “Voting Securities” means at any time shares of any class of Capital Stock of the Company, including but not limited to Voting Common Stock (or, after giving effect to the Merger Transactions, Class A Common Stock), and Voting Debt that are then entitled to vote generally in the election of directors;

(v)           the word “or” is not exclusive;

(w)          the words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”;

(x)          the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision; and

(y)          all article, section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit and schedule references not attributed to a particular document shall be references to such exhibits and schedules to this Agreement.

6.3         Amendment

        and Waivers.  The conditions to each Party’s obligation to consummate the Closing are for the sole benefit of such Party and may be waived by such Party in whole or in part to the extent permitted by Law.  No amendment or waiver of
    any provision of this Agreement will be effective against any Party unless it is in a writing signed by a duly authorized officer of such Party.

6.4          Counterparts

        and Facsimile.   For the convenience of the Parties, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together
    constitute the same agreement.  Executed signature pages to this Agreement may be delivered by facsimile and such facsimiles shall be deemed as sufficient as if manually signed signature pages had been delivered.

32

6.5         Governing Law.    This Agreement will be governed by and construed in accordance with the Laws of the State of California applicable to contracts made and to be performed entirely within such State.

6.6        WAIVER

        OF JURY TRIAL.   TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, INVESTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS AGREEMENT, THE
    TRANSACTIONS CONTEMPLATED HEREBY WHETHER BASED ON CONTRACT, EQUITY, TORT OR ANY OTHER THEORY.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN BY INVESTOR, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

6.7          Notices.  Any notice, request, instruction or other document to be given hereunder by any Party to the other will be in writing and will be deemed to have been duly given (a) on the date of delivery if delivered personally or by telecopy or facsimile, upon confirmation of receipt, (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid, provided that any such notice, request, instruction or other document to be given hereunder shall not be deemed to have been duly given unless and until it is sent via electronic mail to the recipient thereof.  All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice.

(a)          If to the Investor, to the address set forth on the Investor’s signature page to this Agreement.

(b)          If to the Company:

Broadway Financial Corporation

5055 Wilshire Boulevard, Suite 500

Los Angeles, California 90036

Attn: Brenda Battey,

Chief Financial Officer

Email: bbattey@broadwayfederalbank.com

with a copy (which copy shall not constitute notice) to:

Arnold & Porter LLP

777 South Figueroa Street,

44th Floor

Los Angeles, California 90017

Attn: James R. Walther, Esq.

Fax: (213) 243-4199

Email: James.Walther@arnoldporter.com

33

6.8          Entire Agreement.   This Agreement constitutes the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, inducements or conditions, both written and oral, among the Parties, with respect to the subject matter hereof and thereof.

6.9        Successors

        and Assigns.   This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns, including any purchasers of the Common Stock to be issued pursuant to this Agreement.  The
    Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor.  The Investor may assign some or all of its rights hereunder or thereunder without the consent of the Company to any
    Affiliate of the Investor, and such assignee shall be deemed to be an Investor hereunder with respect to such assigned rights and shall be bound by the terms and conditions of this Agreement that apply to the Investor.

6.10       Captions.

    The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.

6.11       Severability.

    If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such
    provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal
    substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon 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.

6.12       Third

        Party Beneficiaries.    Nothing contained in this Agreement, expressed or implied, is intended to confer upon any Person other than the Parties, any benefit right or remedies, except that the Placement Agents may rely on the
    representations and warranties contained herein to the same extent as if they were party to this Agreement and the provisions of Sections 5.1 and 5.2 shall inure to the benefit of the Persons referred to in such Sections.

6.13       Public

        Announcements.     The Investor will not make \(and will use its reasonable best efforts to ensure that its Affiliates and representatives do not make\) any news release or public disclosure with respect to this Agreement and any of
    the transactions contemplated hereby, without first consulting with the Company and, in each case, also receiving the Company’s consent \(which shall not be unreasonably withheld, conditioned or delayed\).

6.14        Specific Performance.   The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms.  It is accordingly agreed that the Parties shall be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity.

34

6.15        No Recourse to Other Persons.   This Agreement may only be enforced against the named Parties.  All claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may be made only against the entities that are expressly identified as Parties or that are subject to the terms hereof, and no past, present or future director, officer, employee, incorporator, member, manager, partner, stockholder, Affiliate, agent, attorney or representative of any Party (including any person negotiating or executing this Agreement on behalf of a Party) shall have any liability or obligation with respect to this Agreement or with respect to any claim or cause of action, whether in tort, contract or otherwise, that may arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement and the transactions contemplated hereby.

[signature page follows]

35

IN WITNESS WHEREOF, the Parties 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:
Name: Wayne-Kent A. Bradshaw
Title: President and Chief Executive Officer

[Stock Purchase Agreement]

Gerald I. White
By:
Name: Gerald I. White
Title:
Address for notices:
---
Mr. Gerald I. White
Grace & White, Inc.
515 Madison Ave.
Suite 1700
NY NY, 10022

[Stock Purchase Agreement]

Exhibit 10.29

EXECUTION VERSION

BROADWAY FINANCIAL CORPORATION

STOCK PURCHASE AGREEMENT

February 19, 2021

TABLE OF CONTENTS

Page
ARTICLE 1. PURCHASE; CLOSING 2
1.1 Issuance, Sale and Purchase 2
1.2 Closing; Deliverables for the Closing; Conditions to the Closing 2
ARTICLE 2. REPRESENTATIONS AND WARRANTIES 4
2.1 Certain Terms 4
2.2 Representations and Warranties of the Company 5
2.3 Representations and Warranties of the Investor 20
ARTICLE 3. COVENANTS 22
3.1 Conduct of Business Prior to Closing 22
3.2 Use of Proceeds 22
3.3 Regulatory Filings 23
3.4 Confidentiality 23
3.5 Publicity 23
3.6 Commercially Reasonable Efforts 23
3.7 Legend. 23
3.8 Exchange Listing 24
3.9 Authorized Shares 24
3.10 Rule 144 Reporting 24
ARTICLE 4. TERMINATION 25
4.1 Termination 25
4.2 Effects of Termination 25
ARTICLE 5. INDEMNITY 26
5.1 Indemnification by the Company 26
5.2 Indemnification by the Investor 27
5.3 Notification of Claims 27
5.4 Indemnification Payment 29
5.5 Exclusive Remedies 29
ARTICLE 6. MISCELLANEOUS 29
6.1 Survival 29
6.2 Other Definitions 30
6.3 Amendment and Waivers 33

i

6.4 Counterparts and Facsimile 33
6.5 Governing Law 33
6.6 WAIVER OF JURY TRIAL 33
6.7 Notices 33
6.8 Entire Agreement 34
6.9 Successors and Assigns 34
6.10 Captions 34
6.11 Severability 34
6.12 Third Party Beneficiaries 34
6.13 Public Announcements 35
6.14 Specific Performance 35
6.15 No Recourse to Other Persons 35

INDEX OF DEFINED TERMS

Page
Action 8
Affiliate 30
Agency 30
Agreement 1
Authorized Shares Increase Approval 3
Bank 6
Bank Merger 1
Benefit Plans 16
Board of Directors 30
Business Day 30
Capital Stock 30
CDFI 6
CFB 1
Class A Common Stock 1
Class B Common Stock 1
Class C Common Stock 1
Closing 2
Closing Date 2
Code 30
Company 1
Company Employees 16
Company Financial Statements 9
Company Indemnified Parties 27
Company Insurance Policies 15
Company IT Assets 10

ii

Company Reports 9
Company Specified Representations 31
Company Stock Plan 7
Company Subsidiaries 6
Company Subsidiary 6
Concurrent Other Transactions 1
control 30
controlled by 30
controlling 30
Disclosure Schedule 31
Disqualification Event 18
EESA 16
ERISA 16
ERISA Affiliate 16
Exchange Act 9
FDIC 6
GAAP 31
Governmental Authorizations 13
Governmental Consent 31
Governmental Entity 31
Indemnified Party 27
Indemnifying Party 27
Insider 19
Insurer 31
Intellectual Property Rights 15
Investment 1
Investor 1
Investor Indemnified Parties 26
Investor Specified Representations 31
Knowledge 31
Law 14
Liens 8
Loan Investor 31
Losses 31
Material Adverse Effect 4
Merger 1
Merger Agreement 1
Merger Transactions 1
Multiemployer Plan 16
Non-Voting Common Stock 6
OFAC 12
Parties 1
Per Share Purchase Price 2
Person 32
Personal Information 11

iii

Placement Agents 1
Preferred Stock 6
Previously Disclosed 5
Privacy Laws 11
Purchase Price 2
Registration Statement 21
Rule 506 18
SEC 5
Securities Act 7
Shares 2
SLHCA Act 6
Stockholder Approval 3
Subsidiary 32
Surviving Bank 1
Tax 32
Tax Return 32
Taxes 32
Third Party Claim 27
Threshold Amount 26
under common control with 30
Voting Common Stock 6
Voting Debt 7
Voting Securities 32

iv

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Agreement”) is dated as of February 19, 2021, and is entered into by and among Broadway Financial Corporation, a Delaware corporation (the “Company”),

        and Mr. Gerald I. White, in his capacity as the trustee for the Grace & White, Inc. Profit Sharing Plan \(the “Investor”, and together with the Company, the “Parties”\).

RECITALS

WHEREAS, the Company is a party to that certain Agreement and Plan of Merger (the “Merger Agreement”) with CFBanc Corporation, a District of Columbia benefit corporation (“CFB”) which provides, among other things and subject to the terms and conditions of the Merger Agreement, for (i) the merger of CFB with and into the Company, with the Company continuing as the surviving entity in the Merger (the “Merger”), (ii) immediately

        following the Merger, Broadway Federal Bank, f.s.b., a wholly owned subsidiary of the Company, will merge with and into City First Bank of D.C., National Association \(“CFB Sub”\), a wholly owned subsidiary of CFB \(the “Bank Merger” and together with the Merger and the

      other transactions contemplated by the Merger Agreement, the “Merger Transactions”\), with CFB Sub continuing as the surviving entity \(the “Surviving Bank”\), and \(iii\) the Company’s voting common stock, par value $0.01 per share, will be renamed Class A Common Stock \(“Class A Common Stock”\), a new class of non-voting common stock of the Company, par value $0.01 per share, will be created which will be named Class B Common Stock \(“Class

          B Common Stock”\) and the Company’s currently authorized non-voting common stock, par value $0.01 per share, will be renamed Class C Common Stock \(the “Class C Common Stock” and
      collectively, the “Common Stock” \);

WHEREAS, the Company has engaged Raymond James & Associates, Inc. and Keefe, Bruyette & Woods, Inc. as co-placement agents (the “Placement Agents”) for the offering of the Common Stock.

WHEREAS, the Company desires to issue and sell to the Investor, and the Investor desires to purchase from the Company, on the terms and conditions described herein, shares of Class A Common Stock at the Per Share Purchase Price specified herein (the “Investment”);

WHEREAS, the Investment is proposed to be made subject to completion of the Merger Transactions;

WHEREAS, the Investment is proposed to be made concurrently with the sale by the Company of shares of Class A Common Stock and Class C Common Stock at the Per Share Purchase Price via private placement to certain other investors (the “Concurrent Other Transactions”); and

NOW, THEREFORE, in consideration of the premises, and of the respective representations, warranties, covenants and other agreements of the Parties set forth herein, the Parties hereby agree as follows:

ARTICLE 1.

        PURCHASE; CLOSING

1.1         Issuance, Sale and Purchase.  On the terms and subject to the conditions set forth herein, the Company agrees to issue and sell to the Investor, and the Investor agrees to purchase from the Company, free and clear of any Liens, 160,000 shares of Class A Common Stock (the “Shares”) at a per share purchase price of $1.78 (the “Per Share Purchase Price”), payable to the Company in immediately available funds at the Closing.  The aggregate purchase price payable pursuant to this Section 1.1 is referred to herein as the “Purchase Price”).

1.2          Closing; Deliverables for the Closing; Conditions to the Closing

(a)         Closing.  Unless this Agreement has been terminated pursuant to Article 4, and subject to the satisfaction or, to the extent permitted by Law and this Agreement, the written waiver of the conditions set forth in Section 1.2(c), the closing of the transaction contemplated by this Agreement (the “Closing”) shall take place at the offices of Arnold & Porter LLP, located at 777 South Figueroa Street, 44th Floor, Los Angeles, California 90017, or remotely via the electronic or other exchange of documents and signature pages, at 9:00 a.m. Pacific Time on the second Business Day after the satisfaction or, if permissible, waiver of the conditions set forth in Section 1.2(c) (other than those which by their nature are to be satisfied at Closing, but subject to the satisfaction or waiver of such conditions), or at such other place or such other date as may be agreed to by the Parties (the “Closing Date”).

(b)          Closing Deliverables.  Subject to the satisfaction or permitted waiver of the conditions to the Closing set forth in Section 1.2(c), at the Closing the Parties shall make the following deliveries:

(i)          the Company shall deliver to the Investor one or more certificates evidencing the Shares registered in the name of the Investor (or if the Shares are to be uncertificated, the Company shall deliver appropriate evidence of such registration of the Shares in the name of the Investor);

(ii)       the Company shall deliver to the Investor a schedule setting forth the aggregate number of shares of each class of Capital Stock outstanding immediately after giving effect to the Merger Transactions, the Concurrent Other Transactions and the transactions contemplated hereby; and

(iii)        the Investor shall deliver the Purchase Price by wire transfer of immediately available funds to the account specified by the Company for this purpose by notice to the Investor prior to the Closing.

(c)          Closing Conditions.

(i)         The obligations of the Investor, on the one hand, and the Company, on the other hand, to consummate the purchase and sale of the Shares provided for in this Agreement are each subject to the satisfaction or, to the extent permitted by Law and this Agreement, the waiver by the Company or the Investor, as applicable, of the following conditions to the Closing under this Agreement:

2

(A)         All Governmental Consents required to have been obtained at or prior to the Closing Date in connection with the execution, delivery or performance of this Agreement and the consummation of the transactions contemplated hereby shall have been obtained and shall be in full force and effect.

(B)         The Merger Transactions shall have been consummated in accordance with the Merger Agreement, including the approval of the Merger Agreement by the stockholders of each of the Company and CFB;

(C)         If required under applicable Law or the rules and regulations of the Nasdaq Stock Market, the approval by stockholders of the Company of resolutions providing for the Company’s issuance of the maximum number of shares of Common Stock to be issued under this Agreement and in the Concurrent Other Transactions in accordance with this Agreement, the definitive documentation relating to the Concurrent Other Transactions, and applicable Law and the rules and regulations of the Nasdaq Stock Market (such approval being referred to herein as the “Stockholder Approval”) shall have been obtained;

(D)         Approval by the stockholders of the Company to increase in the authorized number of shares of Voting Common Stock (which will become Class A Common Stock upon completion of the Merger) from 50,000,000 shares to 75,000,000 shares, to be effected by the filing of an amended and restated certificate of incorporation of the Company (the “Authorized Shares Increase Approval”), shall have been obtained.

(ii)         The obligation of the Investor to consummate the purchase of Shares provided for in this Agreement is also subject to the satisfaction or waiver by the Investor of the following conditions to the Closing:

(A)         (i) The Company Specified Representations shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date and (ii) the other representations and warranties of the Company set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except, in the case of this clause (ii) only, to the extent that the failure to be true and correct (without regard to any materiality or Material Adverse Effect qualifications contained therein), would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and except, in the case of clauses (i) and (ii), that representations and warranties made as of a specified date shall be true and correct as of such date;

(B)         The Company shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date;

(C)        The Investor shall have received a certificate, dated as of the Closing Date, signed on behalf of the Company by a senior executive officer certifying to the effect that the conditions set forth in Section 1.2(c)(ii)(A), Section 1.2(c)(ii)(B) and Section 1.2(c)(ii)(D) have been satisfied on and as of the Closing Date; and

3

(D)         Since the date of this Agreement, no Material Adverse Effect shall have occurred and no change or other event shall have occurred that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(iii)        The obligation of the Company to consummate the sale of the Shares provided for in this Agreement is also subject to the satisfaction or written waiver by the Company of the following conditions to the Closing:

(A)        The representations and warranties of the Investor set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except to the extent that the failure to be true and correct (without regard to any materiality qualifications contained therein) would not materially adversely affect the ability of the Investor to perform its obligations hereunder and except that (1) representations and warranties made as of a specified date shall be true and correct as of such date and (2) the representations and warranties of the Investor set forth in Sections 2.3(d) and 2.3(f) shall be true and correct in all respects;

(B)         The Investor shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date; and

(C)         The Company shall have received a certificate, dated as of the Closing Date, signed on behalf of the Investor by a duly authorized person certifying to the effect that the conditions set forth in Section 1.2(c)(iii)(A) and Section 1.2(c)(iii)(B) have been satisfied on and as of the Closing Date.

ARTICLE 2.

        REPRESENTATIONS AND WARRANTIES

2.1          Certain Terms.

(a)          As used in this Agreement, the term “Material Adverse Effect” means any circumstance, event, change, development or effect that, individually or in the aggregate, would reasonably be expected to (i) result in a material adverse effect on the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole, or (ii) materially impair or delay the ability of the Company or any of the Company Subsidiaries to perform its or their obligations under this Agreement to consummate the Closing or any of the transactions contemplated hereby; provided, however, that in determining whether a Material Adverse Effect has occurred under clause (i), there shall be excluded any circumstance, event, change, development or effect to the extent resulting from (A) actions or omissions of the Company or any Company Subsidiary expressly required or contemplated by the terms of this Agreement, (B) changes after the date hereof in general economic conditions in the United States, including financial market volatility or downturns, or in the markets in which the Company and the Company Subsidiaries operate, (C) changes after the date hereof affecting the banking industry generally, (D) any changes after the date hereof in applicable Laws or accounting rules or principles, including changes in GAAP, (E) changes in the market price or trading volume of the Common Stock or the Company’s other outstanding securities (but not the underlying causes of such changes), (F) any epidemic, pandemic or disease outbreak (including the Covid-19 virus) including any worsening of such conditions; or (G) any failure by the Company or any of the Company Subsidiaries to meet any internal projections or forecasts with regard to the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole (but not the underlying causes of such failure), in each case to the extent that such circumstance, event, change, development or effect referred to in clauses (B), (C) and (D) do not have a disproportionate effect on the Company and the Company Subsidiaries compared to other participants in the industries or markets in which the Company and the Company Subsidiaries operate.

4

(b)        As used in this Agreement, the term “Previously Disclosed” (i) with regard to any Party, means information set forth in its Disclosure Schedule under Section references corresponding with the provision of this Agreement to which such information relates (including, in the case of the Company, information identified in the Company’s Disclosure Schedule); provided, however, that if such information is disclosed in such a way as to make its relevance or applicability to another provision of this Agreement reasonably apparent on its face, such information shall be deemed to be responsive to such other provision of this Agreement and (ii) with regard to the Company, includes information publicly disclosed by the Company in any reports, schedules, forms, statements and other documents filed or furnished by the Company under the Securities Act and the Exchange Act with the Securities and Exchange Commission (the “SEC”), including pursuant to Section 13(a) or 15(d) thereof, since December 31, 2017, in each case available prior to the date of this Agreement (excluding any risk factor disclosures contained in such documents under the heading “Risk Factors” and any disclosure of risks included in any “forward-looking statements” disclaimer or other statements that are similarly non-specific and are predictive or forward-looking in nature). Notwithstanding anything in this Agreement to the contrary, the mere inclusion of an item in a Disclosure Schedule shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

2.2       Representations

          and Warranties of the Company.   Except as Previously Disclosed, the Company hereby represents and warrants to the Investor, as of the date of this Agreement and as of the Closing Date \(except for the representations and warranties
      that are as of a specific date, which are made as of that date\) that:

5

(a)       Organization and Authority.  Each of the Company and the Company Subsidiaries is a corporation or other entity duly organized and validly existing under the laws of the jurisdiction of its incorporation or organization. Each of the Company and the Company Subsidiaries is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, except where any failure to be so qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  Each of the Company and the Company Subsidiaries has the corporate or other organizational power and authority to own its properties and assets and to carry on its business as it is now being conducted.  The Company has Previously Disclosed correct and complete copies of the certificate of incorporation and bylaws (or similar governing documents) as amended through the date of this Agreement for the Company and Broadway Federal Bank, f.s.b. (the “Bank”).  The Company is duly registered with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) as a savings and loan holding company under the Savings and Loan Holding Company Act, as amended, 12 U.S.C. 1467a (the “SLHCA Act”).  As of the date hereof, the Company is a certified “community development financial institution” designated as such under the Community Development Banking and Financial Institutions Act of 1994, as amended (12 U.S.C. Sections 5311 et seq.) and its implementing regulations, as applicable (a “CDFI”).  Following the consummation of the Bank Merger, the Surviving Bank will apply to be designated as a CDFI.

(b)         Company Subsidiaries.  As of the date of this Agreement, the Company has Previously Disclosed a true, complete and correct list of each entity in which the Company, directly or indirectly, owns sufficient capital stock or holds a sufficient equity or similar interest such that it is consolidated with the Company in the financial statements of the Company or has the power to elect a majority of the board of directors or other persons performing similar functions (each, a “Company Subsidiary” and, collectively, the “Company Subsidiaries”).

      Except for the Company Subsidiaries and as Previously Disclosed, the Company does not own beneficially or control, directly or indirectly, more than 5% of any class of equity securities or similar interests of any corporation, bank, business
      trust, association or similar organization, and is not, directly or indirectly, a partner in any general partnership or party to any joint venture or similar arrangement.  The Company owns, directly or indirectly, all of its interests in each
      Company Subsidiary free and clear of any and all Liens.  No equity security of any Company Subsidiary is or may be required to be issued by reason of any option, warrant, scrip, preemptive right, right to subscribe to, gross-up right, call or
      commitment of any character whatsoever relating to, or security or right convertible into, shares of any capital stock or other interest of such Company Subsidiary, and there are no contracts, commitments, understandings or arrangements by which
      any Company Subsidiary is bound to issue additional shares of its capital stock or other interest, or any option, warrant or right to purchase or acquire any additional shares of its capital stock.  The deposit accounts of the Bank are insured by
      the Federal Deposit Insurance Corporation \(“FDIC”\) to the fullest extent permitted by the Federal Deposit Insurance Act, as amended, and the rules and regulations of the FDIC thereunder, and all
      premiums and assessments required to be paid in connection therewith have been paid when due \(after giving effect to any applicable extensions\). The Company beneficially owns all of the outstanding capital securities of, and has sole control of,
      the Bank.

(c)          Capitalization.

(i)        Except as set forth on the Disclosure Schedule, as of the date hereof, the authorized Capital Stock of the Company consists of 50,000,000 shares of Voting Common Stock, par value $0.01 per share (“Voting Common Stock”), 25,000,000 shares of Non-Voting Common Stock, par value $0.01 (“Non-Voting Common Stock”), and 1,000,000 shares of preferred stock, par value $0.01 (“Preferred Stock”).

6

(ii)        As of the date hereof, before giving effect to the transaction provided for herein, the Merger Transactions and the Concurrent Other Transactions the Company has issued and outstanding: (i) 19,281,758 of shares of Voting Common Stock, including 556,169 shares of Voting Common Stock granted in respect of outstanding restricted stock awards, (ii) 1,637,902 shares of Voting Common Stock held by the trust for the Broadway Federal Bank, f.s.b. Employee Stock Ownership Plan, and (iii) 8,756,396 shares of Non-Voting Common Stock.

(iii)        As of the date hereof, other than in respect of awards outstanding under or issuable pursuant to the Company’s 2008 Long-Term Incentive Plan (the “Company

          Stock Plan”\) consisting of options to purchase an aggregate of 450,000 shares of common stock, and except in connection with this Agreement and the transactions contemplated hereby, the Merger Agreement and the Concurrent Other
      Transactions, the Company has not \(A\) agreed to issue or authorized the issuance after the date hereof of any shares of Common Stock or Preferred Stock, or any securities convertible into or exchangeable or exercisable for shares of Common Stock
      or Preferred Stock, \(B\) reserved for issuance any shares of Capital Stock of the Company or \(C\) repurchased or redeemed, or agreed to or authorized the repurchase or redemption of, any shares of Capital Stock of the Company.

(iv)       All of the issued and outstanding shares of Capital Stock of the Company have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, except for the preemptive rights granted to certain institutional stockholders of the Company identified on Schedule 2.2(c)(iv) of the Company’s Disclosure Schedule.  None of the outstanding shares of Capital Stock or other securities of the Company or any of the Company Subsidiaries was issued, sold or offered by the Company or any Company Subsidiary in violation of the Securities Act of 1933, as amended (the “Securities Act”) or the securities or blue sky laws of any state or jurisdiction, or in violation of any agreement, arrangement or commitment to which the Company was or is a party or subject, or in violation of any preemptive or similar rights of any Person.  No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which the stockholders of the Company may vote (“Voting Debt”) are issued and outstanding.

(v)         As of the date of this Agreement, except for the outstanding awards under the Company Stock Plan, the Company does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of, or securities or rights convertible into or exchangeable or exercisable for, any shares of Capital Stock or Voting Debt of the Company.

(d)          Authorization; No Conflicts.

(i)         The Company has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The Board of Directors has approved the transactions contemplated by this Agreement.  This Agreement has been duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery by the Investor, is the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles (whether applied in equity or at law).

7

(ii)      Neither the execution and delivery by the Company of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by the Company with any of the provisions hereof, will, with or without the passage of time and giving of notice, (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any liens, charges, adverse rights or claims, pledges, covenants, title defects, security interests or other encumbrances of any kind (“Liens”) upon any of the properties or assets of the Company or any Company Subsidiary, under any of the terms, conditions or provisions of (1) the certificate of incorporation or bylaws (or similar governing documents) of the Company and each Company Subsidiary or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any of the Company Subsidiaries is a party or by which it may be bound, or to which the Company or any of the Company Subsidiaries, or any of the properties or assets of the Company or any of the Company Subsidiaries may be subject, or (B) violate any Law applicable to the Company or any of the Company Subsidiaries or any of their respective properties or assets except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(e)        Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of this Agreement or for the sale by the Company of Common Stock to the Investor pursuant to this Agreement.

(f)         Litigation and Other Proceedings.  Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, or as would not reasonably be expected to adversely impact the reputation of the Company, the Company Subsidiaries or their respective investors in any material respect, there is no pending or, to the Knowledge of the Company, threatened claim, action, suit, arbitration, complaint, charge or investigation or proceeding (each an “Action”) against the Company or any Company Subsidiary or any of their respective assets, rights or properties, nor is the Company or any Company Subsidiary a party or named as subject to the provisions of any order, writ, injunction, settlement, judgment or decree of any court, arbitrator or government agency, or instrumentality.  There has not been, and to the Knowledge of the Company, there is not pending or contemplated, any investigation or other Action by the SEC involving the Company or any current or former director or officer of the Company in his or her capacity as such.

8

(g)          Financial Statements.  The audited consolidated balance sheets of the Company and the Company Subsidiaries and the related consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2019 and the unaudited consolidated balance sheets of the Company and the Company Subsidiaries and the related unaudited consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s quarterly reports on Form 10-Q filed with the SEC for the quarterly period ending September 30, 2020 (the “Company Financial Statements”) (i) have been prepared from, and are in accordance with, the books and records of the Company and the Company Subsidiaries, (ii) complied, as of the date of such filing, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, (iii) have been prepared in accordance with GAAP applied on a consistent basis and (iv) present fairly in all material respects the consolidated financial position of the Company and the Company Subsidiaries at the dates and the consolidated results of operations, changes in stockholders’ equity and cash flows of the Company and the Company Subsidiaries for the periods stated therein.

(h)         Reports.  Since December 31, 2017, the Company and each Company Subsidiary have filed all material reports, registrations, documents, filings, statements and submissions, together with any required amendments thereto, that they were required to file with any Governmental Entity, including all those required under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof (the foregoing, collectively, being referred to herein as the “Company Reports”) and have paid all material fees and assessments due and payable in connection therewith.  As of their respective filing dates, or as subsequently amended prior to the date hereof, the Company Reports complied in all material respects with all statutes and applicable rules and regulations of the applicable Governmental Entities.  As of the date of this Agreement, there are no outstanding comments from the SEC or any other Governmental Entity with respect to any Company Report that were the subject of written correspondence that have not been resolved.  The Company Reports, including the documents incorporated by reference in each of them, each contained all the information required to be included in it and, when it was filed and, as of the date of each such Company Report filed with the SEC, or if amended prior to the date of this Agreement, as of the date of such amendment, did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in it, in light of the circumstances under which they were made, not misleading and complied as to form in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  No executive officer of the Company has failed in any respect to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002.

9

(i)         Internal Accounting and Disclosure Controls.  The records, systems, controls, data and information of the Company and the Company Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of the Company or the Company Subsidiaries (including all means of access thereto and therefrom) or reputable banking industry service providers, except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have an adverse effect on the system of internal accounting controls described below in this Section 2.2(i).  The Company (i) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) intended to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known to the chief executive officer and the chief financial officer of the Company by others within those entities, and (ii) has disclosed, based on its most recent evaluation prior to the date of this Agreement, to the Company’s outside auditors and the audit committee of the Board of Directors (A) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information, and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.  As of the date of this Agreement, the Company has no Knowledge of any reason that its outside auditors and its chief executive and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when due.  Since December 31, 2017, neither the Company nor any Company Subsidiary nor, to the Knowledge of the Company, any director, officer, employee, auditor, accountant or representative of the Company or any Company Subsidiary has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any Company Subsidiary or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any Company Subsidiary has engaged in questionable accounting or auditing practices.

(j)           Data Privacy

(i)        The Company and the Company Subsidiaries have taken commercially reasonable steps consistent with customary industry practices to protect the confidentiality, integrity, availability and security of the computers, servers, workstations, routers, hubs, switches, circuits, networks and other information technology equipment owned or controlled by them or by any third party and material to the Company and the Company Subsidiaries (the “Company IT Assets”) (and all information and transactions stored or contained therein or transmitted thereby) against any unauthorized use, access, interruption, modification or corruption, and there has been no unauthorized use, access, interruption, modification or corruption of the Company IT Assets.

10

(ii)        In connection with their receipt, purchase, collection, securing, safeguarding, storage, transfer (including any transfer across national borders), disclosure, destruction/disposal, and/or use or other processing of any Personal Information, each of the Company and the Company Subsidiaries, is and has been, in material compliance with all Privacy Laws, their respective privacy policies and the requirements of any contract or codes of conduct to which any of the Company or the Company Subsidiaries is a party.  The privacy policies of the Company are customary for the industry in which the Company operates.  The Company and the Company Subsidiaries have commercially reasonable and appropriate physical, technical, organizational, and administrative security measures and policies in place designed to protect all Personal Information collected by them or on their behalf from and against unauthorized access, use, interruption, modification, corruption, and/or disclosure.  The Company and the Company Subsidiaries have binding written agreements obligating (in accordance with and as required by Privacy Laws (as applicable)) all third parties collecting, accessing, receiving, storing or processing Personal Information on behalf of the Company and the Company Subsidiaries to (i) comply with all applicable Privacy Laws, (ii) take commercially reasonable and appropriate steps to protect and secure such Personal Information from and against unauthorized access, use interruption, modification, corruption, and/or disclosure which are no less stringent than those applied by the Company and the Company Subsidiaries and (iii) promptly notify the Company and the Company Subsidiaries of any unauthorized access, use interruption, modification, corruption, and/or disclosure of Personal Information or Company IT Assets processing Personal Information.  The Company and the Company Subsidiaries are, and since December 31, 2017, have been, in compliance in all material respects with all Privacy Laws and any other applicable Laws in all relevant jurisdictions relating to data loss, theft and breach of security notification obligations.  Since December 31, 2017, none of the Company or any of the Company Subsidiaries has experienced a material breach of its information technology systems or a data loss or theft as defined by the Laws in all relevant jurisdictions.  None of the Company or any of the Company Subsidiaries has been charged with, or received any notice of any claims of, the violation in any material respect of any Privacy Laws or any of their respective privacy policies.  The consummation of the transactions contemplated hereby will not breach or otherwise cause any violation of any Privacy Law.

(iii)        For the purposes of this Section 2.2(j):

(1)          “Personal Information” means, in addition to any definition provided by applicable law or by the Company and the Company Subsidiaries in any of their respective privacy policies, contracts, or other public-facing statements for any similar term (e.g., “personally identifiable information” or “PII”), all information identifying, regarding or capable of being associated with an individual person or device.  Personal Information may relate to any individual, including a current, prospective or former client (or a client’s customer or end user) or employee of any Person, and includes information in any form, including paper, electronic and other forms.

(2)         “Privacy Laws” means all applicable laws, legal requirements, and self-regulatory guidelines and principles relating to privacy, data security, and Personal Information and similar applicable consumer protection laws, including with respect to the receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security, disposal, destruction, disclosure or transfer of Personal Information and any and all applicable laws governing breach notification in connection with Personal Information.  As used in this Agreement, “Privacy Laws” shall include the California Consumer Privacy Act, General Data Protection Regulation and the rules and regulations promulgated thereunder, and applicable state laws.

(k)         No Undisclosed Liabilities.  There are no liabilities of the Company or any of the Company Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, except for (i) liabilities adequately reflected or reserved against in accordance with GAAP in the Company’s audited balance sheet as of December 31, 2019 and (ii) liabilities that have arisen in the ordinary and usual course of business and consistent with past practice since December 31, 2019 and that have not or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

11

(l)          Mortgage Lending.  The Company and each of the Company Subsidiaries have complied in all material respects with, and all documentation in connection with the origination, processing, underwriting and credit approval of any mortgage loan originated, purchased or serviced by the Company or any Company Subsidiary has satisfied, in all material respects (i) all Laws with respect to the origination, insuring, purchase, sale, servicing, or filing of claims in connection with mortgage loans, including all Laws relating to real estate settlement procedures, consumer credit protection, truth in lending laws, usury limitations, fair housing, transfers of servicing, collection practices, equal credit opportunity and adjustable rate mortgages, (ii) the responsibilities and obligations relating to mortgage loans set forth in any agreement between the Company and any Agency, Loan Investor or Insurer, (iii) the applicable rules, regulations, guidelines, handbooks and other requirements of any Agency, Loan Investor or Insurer and (iv) the terms and provisions of any mortgage or other collateral documents and other loan documents with respect to each mortgage loan.

(m)        Bank Secrecy Act; Anti-Money Laundering; OFAC; and Customer Information.  The Company is not aware of, has not been advised of, and, to the Knowledge of the Company, has no reason to believe that any facts or circumstances exist that would cause it or any Company Subsidiary to be deemed to be not operating in compliance, in all material respects, with the Bank Secrecy Act of 1970, as amended, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (also known as the USA PATRIOT Act), any order or regulation issued by the Treasury’s Office of Foreign Assets Control (“OFAC”), or any other applicable anti-money laundering or anti-terrorist-financing statute, rule or regulation.  The Company is not aware of any facts or circumstances that would cause it to believe that any nonpublic customer information has been disclosed to or accessed by an unauthorized third party in a manner that would cause it to undertake any material remedial action.  The Company and each of the Company Subsidiaries have adopted and implemented an anti-money laundering program that contains adequate and appropriate customer identification verification procedures that comply with the USA PATRIOT Act and such anti-money laundering program meets the requirements in all material respects of Section 352 of the USA PATRIOT Act and the regulations thereunder, and they have complied in all respects with any requirements to file reports and other necessary documents as required by the USA PATRIOT Act and the regulations thereunder.  The Company will not directly or indirectly use the proceeds of the sale of the Common Stock pursuant to transactions contemplated by this Agreement, or lend, contribute or otherwise make available such proceeds to any Company Subsidiary, joint venture partner or other Person, towards any sales or operations in any country appearing on the OFAC Specially Designated Nationals List (“SDN List”) or for the purpose of financing the activities of any Person currently appearing on the SDN List.

12

(n)          Certain Payments.  Neither the Company nor any of the Company Subsidiaries, nor any directors or officers of the Company, nor to the Knowledge of the Company, employees or any Affiliates of the Company or the Company Subsidiaries or any other Person who to the Knowledge of the Company is associated with or acting on behalf of the Company or any of the Company Subsidiaries has directly or indirectly (i) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment in material violation of any Law, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable anti-bribery or anti-corruption laws, to any Person, private or public, regardless of form, whether in money, property, or services (A) to obtain favorable treatment in securing business for the Company or any of the Company Subsidiaries, (B) to pay for favorable treatment for business secured by the Company or any of the Company Subsidiaries, or (C) to obtain special concessions or for special concessions already obtained, for or in respect of the Company or any of the Company Subsidiaries or (ii) established or maintained any fund or asset with respect to the Company or any of the Company Subsidiaries that was required by Law or GAAP to have been recorded and was not recorded in the books and records of the Company or any of the Company Subsidiaries.  Neither the Company nor any Company Subsidiaries has conducted any internal investigation, made any voluntary, directed, or involuntary disclosure to any Governmental Entity, or received any audit report, written communication from a Governmental Entity, or whistleblower or other written complaint, involving alleged violations in any material respect of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable anti-bribery or anti-corruption laws on the part of the Company, any of the Company Subsidiaries, or any Person acting on behalf of the Company or any of the Company Subsidiaries.

(o)         Absence of Certain Changes.  Since December 31, 2019 and except as Previously Disclosed or as required or contemplated by the terms of this Agreement, (i) the Company and the Company Subsidiaries have conducted their respective businesses in all material respects in the ordinary and usual course of business consistent with past practices, (ii) through (and including) the date of this Agreement, no fact, event, change, condition, development, circumstance or effect has occurred that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (iii) no material default (or event which, with notice or lapse of time, or both, would constitute a material default) exists on the part of the Company or any Company Subsidiary in the due performance and observance of any term, covenant or condition of any agreement to which the Company or any Company Subsidiary is a party and which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(p)          Compliance with Laws.

(i)          The Company, each Company Subsidiary and each of their officers, agents, representatives and employees possesses, holds and have all material permits, licenses, franchises, authorizations, orders, consents, registrations, accreditations and approvals of, and have made all filings, applications and registrations with, Governmental Entities that are required in order to permit the Company and each Company Subsidiary to own or lease their properties and assets and to carry on their business as presently conducted and that are material to the business of the Company and each Company Subsidiary (collectively, the “Governmental

          Authorizations”\).  The Company and the Company Subsidiaries, and to the Company’s Knowledge, their respective officers, agents, representatives and employees, are not in default under any of such Governmental Authorizations, which
      default\(s\) would be, or be reasonably expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries \(taken as a whole\).  The Company and each Company Subsidiary have complied with and \(A\) are not, and
      since December 31, 2017, have not been, in default or violation in any respect of, \(B\) are not under investigation with respect to, and \(C\) have not been threatened to be charged with or given notice of any material violation of, any applicable
      material domestic \(federal, state or local\) or foreign law, statute, ordinance, license, rule, regulation, policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental Entity \(each, a “Law”\), other than such noncompliance, defaults or violations as would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries \(taken as a whole\).  No
      Governmental Entity has placed any material restriction on the business or properties of the Company or any of the Company Subsidiaries.  As of the date hereof, the Bank has a Community Reinvestment Act rating of “outstanding.”

13

(ii)         Except for normal examinations conducted by a Governmental Entity in the ordinary course of business of the Company and the Company Subsidiaries, (A) no Governmental Entity has initiated or has pending any proceeding or, to the Knowledge of the Company, investigation into the business or operations of the Company or any of the Company Subsidiaries since December 31, 2017, (B) there is no unresolved violation or exception by any Governmental Entity with respect to any report or statement relating to any examinations or inspections of the Company or any of the Company Subsidiaries, and (C) there have been no formal or informal inquiries by, or disagreements or disputes with, any Governmental Entity with respect to the business, operations, policies or procedures of the Company or any of the Company Subsidiaries since December 31, 2017, in each case of clauses (A) through (C), which would reasonably be expected, individually or in the aggregate, to be material to the Company and the Company Subsidiaries (taken as a whole).

(iii)      The Company and the Company Subsidiaries are not, and since December 31, 2017, have not been, in violation or default of any provisions of their respective certification of incorporation or bylaws (or similar governing documents).

(q)        Adequate Capitalization.  As of September 30, 2020, the Bank met or exceeded the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.  As of the Closing and after giving effect to this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions, the Bank meets or exceeds the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.

(r)        Agreements with Regulatory Agencies.  The Company and the Company Subsidiaries (A) are not subject to any cease-and-desist or other similar order or enforcement action issued by, (B) are not a party to any written agreement, consent agreement or memorandum of understanding with, (C) are not a party to any commitment letter or similar undertaking to, and (D) are not subject to any capital directive by, and since December 31, 2019, neither the Company nor any of the Company Subsidiaries has adopted any board resolutions at the request of any Governmental Entity that currently restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its liquidity and funding policies and practices, its ability to pay dividends, its credit, risk management or compliance policies, its internal controls, its management or its operations or business, nor has the Company nor any of the Company Subsidiaries been advised since December 31, 2019 by any Governmental Entity that it is considering issuing, initiating, ordering, or requesting any of the same.

14

(s)          Insurance.  The Company and each of the Company Subsidiaries are presently insured, and have been insured for at least the past two years, for reasonable amounts with financially sound and reputable insurance companies against such risks as companies engaged in a similar business would, in accordance with good business practice, customarily be insured.  All of the policies, bonds and other arrangements providing for the foregoing (the “Company Insurance Policies”) are in full force and effect, the premiums due and payable thereon have been or will be timely paid through the Closing Date, and there is no material breach or default (and no condition exists or event has occurred that, with the giving of notice or lapse of time or both, would constitute such a material breach or default) by the Company or any of the Company Subsidiaries under any of the Company Insurance Policies or, to the Knowledge of the Company, by any other party to the Company Insurance Policies.  Neither the Company nor any of the Company Subsidiaries has received any written notice of cancellation or non-renewal of any Company Insurance Policy nor, to the Knowledge of the Company, is the termination of any such policies threatened in writing by the insurer, and there is no material claim for coverage by the Company, or any of the Company Subsidiaries, pending under any of such Company Insurance Policies as to which coverage has been denied or disputed by the underwriters of such Company Insurance Policies or in respect of which such underwriters have reserved their rights.

(t)           Title.  The Company and the Company Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and valid title to all material personal property owned by them, in each case free and clear of all Liens, except for Liens which do not materially affect the value of such property or do not interfere with the use made and proposed to be made of such property by the Company or any Company Subsidiary.  Any real property and facilities held under lease by the Company or the Company Subsidiaries are leased pursuant to valid, subsisting and enforceable leases with such exceptions that are not material and do not interfere with the use made and proposed to be made of such property and facilities by the Company or the Company Subsidiaries.

(u)          Intellectual Property.   The Company and the Company Subsidiaries own or possess adequate rights or licenses to use all trademarks, service marks and all applications and registrations therefor, trade names, patents, patent rights, copyrights, original works of authorship, inventions, trade secrets and other intellectual property rights (collectively, “Intellectual Property Rights”) used in their businesses as conducted on the date of this Agreement, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  To the Knowledge of the Company, no product or service of the Company or the Company Subsidiaries infringes the Intellectual Property Rights of others

15

(v)          Employee Benefits.

(i)          Section 2.2(v) of the Disclosure Schedule sets forth a correct and complete list of each “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including, without limitation, multiemployer plans within the meaning of Section 3(37) of ERISA), and all stock purchase, stock option, severance, employment, change-in-control, fringe benefit, bonus, incentive, deferred compensation and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transactions contemplated by this Agreement or otherwise), whether formal or informal, oral or written, under which (A) any current or former employee or director of the Company or any of the Company Subsidiaries (the “Company Employees”) has any present or future right to benefits and which are contributed to, sponsored by or maintained by the Company or any of the Company Subsidiaries or (B) the Company or any Company Subsidiary has had or has any present or future liability. All such plans, agreements, programs, policies and arrangements are collectively referred herein to as the “Benefit Plans.”

(ii)         (A) Each Benefit Plan has been established and administered in all material respects in accordance with its terms, and in compliance with the applicable provisions of ERISA, the Code and other Laws; (B) no “reportable event” (as such term is defined in Section 4043 of ERISA) that could reasonably be expected to result in material liability has occurred with respect to any Benefit Plan, and (C) no non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) has been engaged in by the Company or any Company Subsidiary with respect to any Benefit Plan that has or is expected to result in any material liability or “accumulated funding deficiency” (as such term is defined in Section 302 of ERISA and Section 412 of the Code (whether or not waived)).

(iii)        The Company and the Company Subsidiaries will be in compliance, as of the Closing Date, with Sections 111 and 302 of the Emergency Economic Stabilization Act of 2008, as amended by the U.S. American Recovery and Reinvestment Act of 2009, including all guidance issued thereunder by a Governmental Entity (collectively “EESA”).

(iv)       None of the Company or any Company Subsidiary or any trade or business, whether or not incorporated (an “ERISA Affiliate”), all of which together with the Company or any Company Subsidiary would be deemed a “single employer” within the meaning of Section 4001 of ERISA, has, at any time during the last six years, contributed to or been obligated to contribute to any plan that is (i) subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code or (ii) a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA (a “Multiemployer Plan”) or a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA; and none of Company and the Company Subsidiaries nor any of their respective ERISA Affiliates has incurred any liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as those terms are defined in Part I of Subtitle E of Title IV of ERISA.

(v)         Neither the Company nor any Company Subsidiary has any material unfunded liabilities existing under or in connection with any Benefit Plan, and each such Benefit Plan has been established and administered in all respects in accordance with its terms, and in compliance with applicable law, except where failure to be in compliance would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.

16

(vi)        Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby could (either alone or in conjunction with any other event) reasonably be expected to result in, cause the accelerated vesting, funding or delivery of, or increase the amount or value of, any payment or benefit to any employee, officer or director of the Company or any Company Subsidiary.

(w)         Taxes.  All material Tax Returns required to be filed by, or on behalf of, the Company or the Company Subsidiaries have been timely filed, or will be timely filed, in accordance with all Laws, and all such Tax Returns are, or will be at the time of filing, complete and correct in all material respects.  The Company and the Company Subsidiaries have timely paid all material Taxes due and payable (whether or not shown on such Tax Returns), or, where payment is not yet due, have made adequate financial statement provisions therefor in accordance with GAAP.  There are no Liens with respect to Taxes upon any of the assets or properties of either the Company or the Company Subsidiaries other than with respect to Taxes not yet due and payable.  As of the date of this Agreement, there are not pending or threatened in writing, any audits, examinations, investigations or other proceedings initiated by the Internal Revenue Service in respect of U.S. federal income tax matters.  None of the Company or any of the Company Subsidiaries has been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the date hereof that was purported or intended to be governed by Section 355 of the Code (or any similar provision of state, local or foreign Law).  The Company and each Company Subsidiary is, and has been since the date of its formation, a corporation for U.S. federal income tax purposes, and neither the Company nor any Company Subsidiary has elected pursuant to the Code to be treated as a Subchapter S corporation pursuant to Section 1362(a) of the Code, nor has it made any other elections pursuant to the Code (other than elections that relate solely to methods of accounting, depreciation or amortization) that would have, or be reasonably expected to result in, individually or in the aggregate, a Material Adverse Effect.

(x)          Labor.

(i)         Employees of the Company and the Company Subsidiaries are not represented by any labor union nor are any collective bargaining agreements otherwise in effect with respect to such employees.  No labor organization or group of employees of the Company or any Company Subsidiary has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions presently pending or threatened to be brought or filed with the National Labor Relations Board or any other labor relations tribunal or authority, nor have there been in the last three years.  There are no strikes, work stoppages, slowdowns, labor picketing lockouts, material arbitrations or material grievances, or other material labor disputes pending or, to the Knowledge of the Company, threatened against or involving the Company or any Company Subsidiary, nor have there been any in the past year.

17

(ii)         Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company and the Company Subsidiaries are in compliance with all federal and state Laws and requirements respecting employment and employment practices, terms and conditions of employment, collective bargaining, disability, immigration, health and safety, wages, hours and benefits, non-discrimination in employment, workers’ compensation and the collection and payment of withholding and/or payroll taxes and similar taxes.

(iii)      There is no charge or complaint pending or threatened before any Governmental Entity alleging unlawful discrimination in employment practices, unfair labor practices or other unlawful employment practices by the Company or any Company Subsidiary.

(iv)       To the Knowledge of the Company, since December 31, 2017, (i) no allegations of sexual harassment or misconduct have been made against (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000, and (ii) neither the Company nor any of the Company Subsidiaries has entered into any settlement agreements related to allegations of sexual harassment or misconduct by (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000.

(y)         Brokers and Finders.  Except as Previously Disclosed, neither the Company nor any of its officers, directors, employees or agents has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Company in connection with this Agreement or the transactions contemplated hereby, the fees of which would be payable by the Investor.

(z)          Offering of Securities.

(i)          Neither the Company nor any Person acting on its behalf has taken any action (including any offering of any securities of the Company under circumstances which would require the integration of such offering with the offering of any of the Shares to be issued pursuant to this Agreement under the Securities Act and the rules and regulations of the SEC promulgated thereunder) which would subject the offering, issuance or sale of any of the Shares to be issued pursuant to this Agreement to be subject to the registration requirements of the Securities Act.

(ii)         The Company is not disqualified from relying on Rule 506 of Regulation D (“Rule 506”) under the Securities Act for any of the reasons stated in Rule 506(d) (each such reason, a “Disqualification Event”) in connection with the issuance and sale of the Shares to the Investor.  The Company has furnished the Investor, a reasonable time prior to the date hereof, a description in writing of any matters that would have triggered disqualification under Rule 506(d) but which occurred before September 23, 2013, in each case, in compliance with the disclosure requirements of Rule 506(e).

18

(aa)        Affiliate Transactions.  No officer, director, five percent (5%) stockholder or other Affiliate of the Company (or any Company Subsidiary), or any individual who, to the Knowledge of the Company, is related by marriage or adoption to or shares the same home as any such Person, or any entity which, to the Knowledge of the Company, is controlled by any such Person (collectively, an “Insider”), is a party to any contract or transaction with the Company (or any Company Subsidiary) which pertains to the business of the Company (or any Company Subsidiary) or has any interest in any property, real or personal or mixed, tangible or intangible, used in or pertaining to the business of the Company or any Company Subsidiary.  The foregoing representation and warranty does not include deposit accounts of an Insider at the Company or any Company Subsidiary or loans of $250,000 or less made in the ordinary course of business to Insiders in compliance with Regulation O and other applicable Law.

(bb)      Private Placement.  Assuming the accuracy of the Investor’s representations and warranties set forth in Section 2.3 of this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investor.  Assuming the Stockholder Approval is obtained (if required), the issuance and sale of the Shares hereunder does not contravene the rules and regulations of the Nasdaq Stock Market.

(cc)        Listing and Maintenance Requirements.  The Company’s Voting Common Stock is (and at the Closing, the Class A Common Stock will be) registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to terminate the registration of the Voting Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received written notice from the Nasdaq Stock Market to the effect that the Company is not in compliance with the listing or maintenance requirements of the Nasdaq Stock Market.

(dd)        Investment Company.  Neither the Company nor any of the Company Subsidiaries is required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

(ee)        Acknowledgment Regarding the Investor’s Purchase of Shares.  The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby.  The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions and any advice given by the Investor or any of its representatives or agents in connection with this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions is merely incidental to Investor’s purchase of the Shares.

(ff)         No General Solicitation or General Advertising.  Neither the Company nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Shares.

19

(gg)         Shell Company Status.  The Company is not, and has never been, an issuer identified in Rule 144(i)(1) under the Securities Act.

(hh)        Valid Issuance of Shares.  The Shares sold and delivered in accordance with the terms hereof for the consideration expressed herein will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws.  Assuming the accuracy of the representations and warranties of the Investor set forth in Section 2.3, the Shares will be issued in compliance with all applicable federal and state securities laws.

2.3         Representations and Warranties of the Investor.   Except as Previously Disclosed, the Investor hereby represents and warrants to the Company, as of the date hereof and as of the Closing Date (except for the representations and warranties that are as of a specific date which are made as of that date) that:

(a)          [Intentionally Omitted]

(b)          Authorization; No Conflicts.

(i)          The Investor has the legal capacity and the necessary power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The purchase and holding of the Shares by the Investor will not result in the nonexempt prohibited transaction under Section 4975 of the Code or Section 406 of ERISA. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by its board of directors, general partner or managing members, investment committee, investment adviser or other authorized person, as the case may be, and no further approval or authorization by any of its stockholders, partners or other equity owners, as the case may be, is required.  This Agreement has been duly and validly executed and delivered by the Investor and, assuming due authorization, execution and delivery by the Company is the valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

(ii)         Neither the execution, delivery and performance by the Investor of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by the Investor with any of the provisions hereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any Liens upon any of the properties or assets of the Investor under any of the terms, conditions or provisions of (1) the governing documents of the Grace & White, Inc. Profit Sharing Plan or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Investor is a party or by which the Investor may be bound, or to which the Investor or any of the properties or assets of the Investor may be subject, or (B) violate any Law applicable to the Investor or any of its properties or assets, except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to materially adversely affect the Investor’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

20

(c)          Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of this Agreement or for the purchase by the Investor of the Shares pursuant to this Agreement.

(d)         Purchase for Investment; Accredited Investor Status; Pre-Existing Relationship.  The Investor acknowledges that the Shares to be purchased by the Investor pursuant to this Agreement have not been registered under the Securities Act or under any state securities laws and may not be resold or transferred by the Investor without such registration or appropriate reliance on any available exemption from such requirements.  The Investor (i) is acquiring the Shares pursuant to an exemption from the registration requirements of the Securities Act and other applicable securities laws solely for investment with no present intention to distribute any of the Shares to any Person, (ii) will not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, (iii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Shares and of making an informed investment decision and (iv) is an “accredited investor” (as that term is defined by Rule 501 under the Securities Act), (vi) is aware that the Company has entered into the Merger Agreement pursuant to which it is required to file with the SEC a Registration Statement on Form S-4 (the “Registration Statement”), and (vi) began discussions regarding the potential for the Investment by this Agreement with representatives of the Company before the Registration Statement was filed with the SEC and Investor’s purchase of the Shares was not solicited by the Registration or any other filing made by the Company with the SEC.

(e)          Brokers and Finders.  Neither the Investor, nor its Affiliates nor any of their respective officers or directors, has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Investor in connection with this Agreement or the transactions contemplated hereby.

(f)          Access to Information.  The Investor acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and the Company Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the Investment; and (iv) the opportunity to ask questions of management of the Company.

21

(g)        No Reliance.  The Investor has not relied on any representation or warranty made by any Person by or on behalf of the Company, including, without limitation, the Placement Agents, in connection with the Investment other than those contained in this Agreement.

(h)        Placement Agents.  The Investor acknowledges that the Placement Agents have not performed any due diligence review on behalf of the Investor.  Furthermore, the Investor will purchase the Shares directly from the Company and not from the Placement Agents and understands that neither the Placement Agents nor any other broker or dealer has any obligation to make a market in the Common Stock.

(i)         Accuracy of Representations.  The Investor understands that each of the Placement Agents and the Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements in connection with the transactions contemplated by this Agreement and agrees that if any of the representations or acknowledgements made by it are no longer accurate as of the Closing Date, or if any of the agreements made by it are breached on or prior to the Closing Date, it shall promptly notify the Placement Agents and the Company.

ARTICLE 3.

      COVENANTS

3.1        Conduct of Business Prior to Closing.   Except as otherwise expressly required or contemplated by this Agreement or applicable Law, or with the prior written consent of the Investor, between the date of this Agreement and the Closing, the Company shall, and the Company shall cause each Company Subsidiary to:

(a)           use commercially reasonable efforts to conduct its business only in the ordinary course of business consistent with past practice; and

(b)       use commercially reasonable efforts to (i) preserve the present business operations, organization (including officers and employees) and goodwill of the Company and any Company Subsidiary and (ii) preserve business relationships with customers, suppliers, consultants and others having business dealings with the Company; provided, however, that nothing in this clause (b) shall place any limit on the ability of the Board of Directors to act in accordance with, or require any actions that the Board of Directors may, in good faith, determine to be inconsistent with, its duties or the Company’s obligations under applicable Law or imposed by any Governmental Entity.

3.2       Use

          of Proceeds.  The proceeds received by the Company from the sale of the Shares contemplated hereunder \(net of any applicable costs and expenses\) will be used for general corporate purposes and will not
      use such proceeds to repurchase, redeem or otherwise monetize any interests held by other existing shareholders of the Company or any Company Subsidiary.

22

3.3         Regulatory Filings.  The Company shall make all filings pursuant to any applicable state securities laws and Regulation D of the Securities Act that are required to be made in connection with the Closing.

3.4       Confidentiality .  The Investor acknowledges that the information being provided to it in connection with the transactions contemplated hereby includes confidential information that has not been publicly disclosed and agrees to maintain the confidentiality of the information with the same degree of care that it uses to protect its own confidential information.

3.5         Publicity.  The Company shall not publicly disclose the financial or other terms of the transactions contemplated hereby or the name of any Investor or any Affiliate or investment adviser of any Investor, or include the name of any Investor or any Affiliate or investment adviser of any Investor in any press release or filing with the SEC or the Nasdaq Stock Market and shall not use any names, trademarks, service marks or trade names of the Investor or its Affiliates in any form of advertising and publicity or public statements, without the prior written consent of such Investor, except (i) as required by federal securities law in connection with the filing of final transaction documents with the SEC or (ii) to the extent such disclosure is required by applicable law, at the request of the staff of the SEC or at the request of the Nasdaq Stock Market regulations, in which case the Company shall provide each such Investor with prior written notice of such disclosure and the form of such disclosure shall be subject to the approval of such Investor, such approval not to be unreasonably withheld or delayed.

3.6        Commercially Reasonable Efforts.  Upon the terms and subject to the conditions herein provided, except as otherwise provided in this Agreement, each of the Parties hereto agrees to use its commercially reasonable efforts to take or cause to be taken all action, to do or cause to be done and to assist and cooperate with the other Party in doing all things necessary, proper or advisable under applicable Laws to consummate and make effective the transactions contemplated hereby, including but not limited to: (a) the satisfaction of the conditions precedent to the obligations of the Parties; (b) the obtaining of applicable Governmental Consents, and consents, waivers and approvals of any other third parties; (c) defending of any claim, action, suit, investigation or proceeding, whether judicial or administrative, challenging this Agreement or the performance of the obligations hereunder; and (d) the execution and delivery of such instruments, and the taking of such other actions as the other Party may reasonably request in order to carry out the intent of this Agreement.  Notwithstanding the foregoing, under no circumstances will the Investor be required to disclose to the Company, the Company Subsidiaries or any third party any information the disclosure of which is prohibited by Law, nor shall it be required to agree to any restrictions, conditions or commitments imposed or otherwise required by any Government Entity that are determined by the Investor in its sole discretion to be unduly burdensome, other than customary passivity commitments, in order to consummate and make effective the transactions contemplated hereby.

3.7         Legend.

(a)           The Investor agrees that all certificates or other instruments representing the Shares subject to this Agreement shall bear legends substantially to the following effect, until such time as they are not required under Section 3.7(b)

23

“THE SHARES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.”

(b)          Upon request of the Investor, the Company shall promptly cause such legends to be removed from any certificate for any Shares to be so transferred if such Shares are being transferred pursuant to an exemption from the registration securities requirements of the Securities Act and applicable state Laws, subject to receipt by the Company of an opinion of counsel for the Investor reasonably satisfactory to the Company to the effect that such legend is no longer required under the Securities Act and applicable state Laws.  The Investor acknowledges that the sale of the Shares provided for herein has not been registered under the Securities Act or under any state securities Laws and agrees that it shall not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities Laws.

3.8          Exchange Listing.  The Company shall use its reasonable best efforts to cause the Shares to be approved for listing on the Nasdaq Stock Market as promptly as possible.

3.9          Authorized Shares.  The Company will at all times reserve, free of any preemptive or similar rights of stockholders of the Company, a number of unissued shares of Class A Common Stock, sufficient to convert automatically, in accordance with the terms of the certificate of incorporation of the Company, all of the shares of Class C Common Stock then outstanding.

3.10        Rule 144 Reporting.  With a view to making available to the Investor the benefits of certain rules and regulations of the SEC which may permit the sale of the Shares by the Investor without registration under the Securities Act upon compliance with the initial holding period and other applicable requirements of Rule 144 under the Securities Act, the Company agrees to use its reasonable best efforts to:

(i)         make and keep adequate current public information with respect to the Company available, as those terms are understood and defined in Rule 144(c)(1) or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of this Agreement;

(ii)         so long as the Investor owns any of the Shares, furnish to the Investor forthwith upon request: (A) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 under the Securities Act, and of the Exchange Act; (B) a copy of the most recent annual or quarterly report of the Company; and (C) such other reports and documents as the Investor may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any of the Shares without registration; and

24

(iii)        to take such further action as the Investor may reasonably request, all to the extent required from time to time to enable the Investor to sell Shares without registration under the Securities Act.

ARTICLE 4.

        TERMINATION

4.1          Termination.  This Agreement may be terminated prior to the Closing:

(a)           by mutual written agreement of the Company and the Investor;

(b)          by either Party, upon written notice to the other Party in the event that the Closing does not occur on or before September 1, 2021; provided, however, that the right to terminate this Agreement pursuant to this Section 4.1(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;

(c)          by either Party, upon written notice to the other Party, in the event that (i) Stockholder Approval is required under applicable Law or the rules and regulations of the Nasdaq Stock Market, but has not been obtained on or prior to the closing date of the Merger or (ii) the Authorized Shares Increase Approval has not been obtained on or prior to the closing date of the Merger;

(d)          by the Investor, upon written notice to the Company, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Company in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(ii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in the absence of such breach or condition; provided that this Section 4.1(d) shall only apply if the Investor is not in material breach of any of the terms of this Agreement;

(e)          by the Company, upon written notice to the Investor, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Investor in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(iii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in absence of such breach or condition; provided that this Section 4.1(e) shall only apply if the Company is not in material breach of any of the terms of this Agreement; or

(f)          by any Party, upon written notice to the other Party, in the event that any Governmental Entity shall have issued any order, decree or injunction or taken any other action restraining, enjoining or prohibiting any of the transactions contemplated by this Agreement, and such order, decree, injunction or other action shall have become final and non-appealable.

4.2         Effects of Termination.  In the event of any termination of this Agreement as provided in Section 4.1, this Agreement (other than Section 3.4, this Article 4 and Article 6 of this Agreement, which shall remain in full force and effect) shall forthwith become wholly void and of no further force and effect; provided, that nothing herein shall relieve any Party from liability for fraud or willful breach of this Agreement.

25

ARTICLE 5.

      INDEMNITY

5.1          Indemnification by the Company

(a)          After the Closing, and subject to Sections 5.1(b), 5.3 and 5.4, the Company shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Investor and its Affiliates, and their respective successors and assigns, officers, directors, partners, members and employees, as applicable, (the “Investor Indemnified Parties”) against and from, and reimburse any of the Investor Indemnified Parties for, all Losses that any of the Investor Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Company in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by the Company to perform any of its covenants or agreements contained in this Agreement.  Notwithstanding anything herein to the contrary, the obligations of the Company under this Section 5.1(a) shall not be applicable to or inure to the benefit of any transferee of the Common Stock sold pursuant to this Agreement who is not an Affiliate of the Investor.

(b)        Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless any of the Investor Indemnified Parties against, or reimburse any of the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) (other than Losses arising out of the inaccuracy or breach of any Company Specified Representations) until the aggregate amount of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a) exceeds $100,000 (the “Threshold Amount”), upon the occurrence of which the Company shall be obligated for all of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a).  Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless the Investor Indemnified Parties against, or reimburse the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1.

(c)          For purposes of Section 5.1(a), in determining whether there has been a breach of a representation or warranty, the Parties hereto shall ignore any “materiality,” “Material Adverse Effect” or similar qualifications.

26

5.2          Indemnification by the Investor

(a)         After the Closing, and subject to Sections 5.2(b), 5.3 and 5.4, the Investor shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Company and its respective Affiliates and their respective successors and assigns, officers, directors, partners, members, employees, representatives and agents (collectively, the “Company Indemnified Parties”) against and from, and reimburse any of the Company Indemnified Parties for, all Losses that the Company Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Investor in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by such Investor to perform any of its covenants or agreements contained in this Agreement.

(b)       Notwithstanding anything to the contrary contained herein, the Investor shall not be required to indemnify, defend or hold harmless any of the Company Indemnified Parties against, or reimburse any of the Company Indemnified Parties for any Losses pursuant to Section 5.2(a)(1) until the aggregate amount of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a) exceeds the Threshold Amount, upon the occurrence of which the Investor shall be obligated for all of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a)(1).  Notwithstanding anything to the contrary contained herein, the Investor shall not be required to indemnify, defend or hold harmless the Company Indemnified Parties against, or reimburse the Company Indemnified Parties for, any Losses pursuant to Section 5.2(a)(1) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1 hereof.

(c)          For purposes of Section 5.2(a), in determining whether there has been a breach of a representation or warranty, the Parties shall ignore any “materiality” or similar qualifications.

5.3          Notification of Claims

(a)          Any Person that may be entitled to be indemnified under this Article 5 (the “Indemnified Party”) shall promptly notify the party or parties liable for such indemnification (the “Indemnifying Party”) in writing of any claim in respect of which indemnity may be sought hereunder, including any pending or threatened claim or demand by a third party that the Indemnified Party has determined has given or could reasonably give rise to a right of indemnification under this Agreement (including a pending or threatened claim or demand asserted by a third party against the Indemnified Party) (each, a “Third Party Claim”), describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or demand; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Agreement except to the extent that the Indemnifying Party is materially prejudiced by such failure.  The Parties agree that notices for claims in respect of a breach of a representation, warranty, covenant or agreement must be delivered prior to the expiration of any applicable survival period specified in Section 6.1 for such representation, warranty, covenant or agreement; provided, that if, prior to such applicable date, a Party hereto shall have notified the other Party hereto in accordance with the requirements of this Section 5.3(a) of a claim for indemnification under this Agreement (whether or not formal legal action shall have been commenced based upon such claim), such claim shall continue to be subject to indemnification in accordance with this Agreement notwithstanding the passing of such applicable date.

27

(b)         Upon receipt of a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) in respect of a Third Party Claim, the Indemnifying Party may, by notice to the Indemnified Party delivered within twenty (20) Business Days of the receipt of notice of such Third Party Claim, assume the defense and control of any Third Party Claim, with its own counsel reasonably acceptable to the Indemnified Party and at its own expense.  The Indemnified Party shall have the right to employ counsel on its own behalf for, and otherwise participate in the defense of, any such Third Party Claim, but the fees and expenses of its counsel will be at its own expense unless (A) the employment of counsel by the Indemnified Party at the Indemnifying Party’s expense has been authorized in writing by the Indemnifying Party, (B) the Indemnified Party reasonably believes there may be a conflict of interest between the Indemnified Party and the Indemnifying Party in the conduct of the defense of such Third Party Claim, (C) the Indemnified Party reasonably believes there are legal defenses available to it that are different from, additional to or inconsistent with those available to the Indemnifying Party, or (D) the Indemnifying Party has not in fact employed counsel to assume the defense of such Third Party Claim within a reasonable time after receipt of notice of the commencement of such Third Party Claim, in each of which cases the fees and expenses of such Indemnified Party’s counsel shall be at the expense of the Indemnifying Party; provided, however, that in the event that the Company is required to assume the fees and expenses of such Investor Indemnified Party’s counsel in accordance with the foregoing and such Investor Indemnified Party is similarly situated with any other “Investor Indemnified Party” under any of the other stock purchase agreements with respect to any Third Party Claim, and does not have any conflict of interest with such Person in the conduct of the defense of such Third Party Claim or have legal defenses available to it that are different from, additional to or inconsistent with those available to such Person, such Investor Indemnified Party shall be required to employ the same counsel as such Person and the Company shall be responsible for the fees and expenses of only one such counsel for such Investor Indemnified Party and such other Person or Persons (assuming any of clauses (A) through (D) above is satisfied).  The Indemnified Party may take any actions reasonably necessary to defend such Third Party Claim prior to the time that it receives a notice from the Indemnifying Party as contemplated by the immediately preceding sentence.  The Indemnified Party shall, and shall cause each of its Affiliates and representatives to, use reasonable best efforts to cooperate with the Indemnifying Party in the defense of any Third Party Claim.  The Indemnifying Party shall not, without the prior written consent of the Indemnified Party (which shall not be unreasonably withheld or delayed), consent to a settlement, compromise or discharge of, or the entry of any judgment arising from, any Third Party Claim, unless such settlement, compromise, discharge or entry of any judgment does not involve any statement, finding or admission of any fault, culpability, failure to act, violation of Law or admission of any wrongdoing by or on behalf of the Indemnified Party, and the Indemnifying Party shall (i) pay or cause to be paid all amounts arising out of such settlement or judgment concurrently with the effectiveness of such settlement or judgment (unless otherwise provided in such judgment), (ii) not encumber any of the assets of any Indemnified Party or agree to any restriction or condition that would apply to or materially adversely affect any Indemnified Party or the conduct of any Indemnified Party’s business and (iii) obtain, as a condition of any settlement, compromise, discharge, entry of judgment (if applicable), or other resolution, a complete and unconditional release of each Indemnified Party in form and substance reasonably satisfactory to such Indemnified Party from any and all liabilities in respect of such Third Party Claim.  An Indemnified Party shall not settle, compromise or consent to the entry of any judgment with respect to any claim or demand for which it is seeking indemnification from the Indemnifying Party or admit to any liability with respect to such claim or demand without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed); provided, that such consent shall not be required if the Indemnifying Party has not fulfilled any material obligations under this Section 5.3(b).

28

(c)         In the event any Indemnifying Party receives a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) that does not involve a Third Party Claim, the Indemnifying Party shall notify the Indemnified Party within twenty (20) Business Days following its receipt of such notice whether the Indemnifying Party disputes its liability to the Indemnified Party under this Agreement.  The Indemnified Party shall reasonably cooperate with and assist the Indemnifying Party in determining the validity of any such claim for indemnity by the Indemnified Party.

5.4        Indemnification Payment.  In the event a claim or any Action for indemnification hereunder has been finally determined, the amount of such final determination shall be paid by the Indemnifying Party to the Indemnified Party on demand in immediately available funds.  A claim or an Action, and the liability for and amount of damages therefor, shall be deemed to be “finally determined” for purposes of this Agreement when the Parties have so determined by mutual agreement or, if disputed, when a final non-appealable judicial order has been entered into with respect to such claim or Action.

5.5         Exclusive Remedies.  Each Party acknowledges and agrees that following the Closing, the indemnification provisions hereunder shall be the sole and exclusive remedies of the Parties for any breach of the representations, warranties or covenants contained in this Agreement.  No investigation of the Company by the Investor, or of the Investor by the Company, whether prior to or after the date of this Agreement, shall limit any Indemnified Party’s exercise of any right hereunder or be deemed to be a waiver of any such right.  The Parties agree that any indemnification payment made pursuant to this Agreement shall be treated as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

ARTICLE 6.

        MISCELLANEOUS

6.1          Survival.  The representations and warranties of the Parties contained in this Agreement shall survive in full force and effect until the date that is fifteen (15) months after the Closing Date (or until final resolution of any claim or action arising from the breach of any such representation and warranty, if notice of such breach was provided prior to the end of such period), at which time they shall terminate and no claims shall be made for indemnification under Section 5.1 or Section 5.2, as applicable, for breaches of representations or warranties thereafter, except the Company Specified Representations (other than the representations and warranties made in Section 2.2(v), which shall survive until the expiration of the applicable statute of limitations) and the Investor Specified Representations shall survive the Closing indefinitely.  The covenants and agreements set forth in this Agreement shall survive until the expiration of any applicable statute of limitations or until performed or no longer operative in accordance with their respective terms.  Notwithstanding the foregoing, the Company Specified Representations shall survive for the period of the applicable statute of limitations.

29

6.2         Other Definitions.  Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa, and references to any agreement, document or instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time.  In addition, the following terms shall have the meanings assigned to them below:

(a)          the term “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person provided that no security holder of the Company shall be deemed to be an Affiliate of any other security holder or of the Company or any of the Company Subsidiaries solely by reason of any investment in the Company and, for purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled

          by” and “under 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 or policies
      of such Person, whether through the ownership of voting securities, by contract or otherwise;

(b)        the term “Agency” means the Federal Housing Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home Administration (now known as Rural Housing and Community Development Services), the Federal National Mortgage Association, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture or any other federal or state agency with authority to (i) determine any investment, origination, lending or servicing requirements with regard to mortgage loans originated, purchased or serviced by the Company or (ii) originate, purchase, or service mortgage loans, or otherwise promote mortgage lending, including state and local housing finance authorities;

(c)          the term “Board of Directors” means the Board of Directors of the Company;

(d)         the term “Business Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York or in the State of California generally are authorized or required by Law or other governmental actions to close;

(e)          the term “Capital Stock” means the capital stock or other applicable type of equity interest in a Person;

(f)           the term “Code” means the Internal Revenue Code of 1986, as amended;

30

(g)        the term “Company Specified Representations” means the representations and warranties made in Section 2.2(a), Section 2.2(b), Section 2.2(c), Section 2.2(d), Section 2.2(x), Section 2.2(z) and Section 2.2(hh);

(h)          the term “Disclosure Schedule” shall mean a schedule delivered, on or prior to the date of this Agreement, by (i) the Investor to the Company and (ii) the Company to the Investor setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in Section 2.2 with respect to the Company, or in Section 2.3 with respect to the Investor, or to one or more covenants contained in Article 3;

(i)           the term “GAAP” means United States generally accepted accounting principles and practices as in effect from time to time;

(j)           the term “Governmental Consent” means any notice to, registration, qualification, designation, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Entity, or the expiration or termination of any statutory waiting periods;

(k)          the term “Governmental Entity” means any court, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign, and any applicable industry self-regulatory organization or securities exchange;

(l)           the term “Insurer” means a Person who insures or guarantees for the benefit of the mortgagee all or any portion of the risk of loss upon borrower default on any of the mortgage loans originated, purchased or serviced by the Bank, including the Federal Housing Administration, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any private mortgage insurer, and providers of hazard, title or other insurance with respect to such mortgage loans or the related collateral;

(m)         the term “Investor Specified Representations” means the representations and warranties made in Section 2.3(b)(i), Section 2.3(d) and Section 2.3(f);

(n)          the term “Knowledge” of the Company and words of similar import mean the knowledge of any directors or executive officers of the Company listed on the Disclosure Schedule hereto;

(o)          the term “Loan Investor” means any Person (including an Agency) having a beneficial interest in any mortgage loan originated, purchased or serviced by the Bank or a security backed by or representing an interest in any such mortgage loan;

(p)         the term “Losses” means any and all losses, damages, reasonable costs, reasonable expenses (including reasonable attorneys’ fees and disbursements), liabilities, settlement payments, awards, judgments, fines, obligations, claims, and deficiencies of any kind, excluding special, consequential, exemplary and punitive damages;

31

(q)         the term “Person” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, Governmental Entity or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity;

(r)          the term “Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company or other entity (x) of which such Person or a Subsidiary of such Person is a general partner or (y) of which a majority of the voting securities or other voting interests, or 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;

(s)          the term “Tax” or “Taxes” means all United States federal, state, local or foreign income, profits, estimated, gross receipts, windfall profits, severance, property, intangible property, occupation, production, sales, use, license, excise, emergency excise, franchise, capital gains, capital stock, employment, withholding, transfer, stamp, payroll, goods and services, value added, alternative or add-on minimum tax, or any other tax, custom, duty or governmental fee, or other like assessment or charge of any kind whatsoever, together with any interest, penalties, fines, related liabilities or additions to tax that may become payable in respect thereof imposed by any Governmental Entity, whether or not disputed;

(t)         the term “Tax Return” means any return, declaration, report or similar statement required to be filed with respect to any Taxes (including any attached schedules), including, without limitation, any information return, claim or refund, amended return and declaration of estimated Tax;

(u)          the term “Voting Securities” means at any time shares of any class of Capital Stock of the Company, including but not limited to Voting Common Stock (or, after giving effect to the Merger Transactions, Class A Common Stock), and Voting Debt that are then entitled to vote generally in the election of directors;

(v)          the word “or” is not exclusive;

(w)         the words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”;

(x)          the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision; and

(y)          all article, section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit and schedule references not attributed to a particular document shall be references to such exhibits and schedules to this Agreement.

32

6.3        Amendment and Waivers.  The conditions to each Party’s obligation to consummate the Closing are for the sole benefit of such Party and may be waived by such Party in whole or in part to the extent permitted by Law.  No amendment or waiver of any provision of this Agreement will be effective against any Party unless it is in a writing signed by a duly authorized officer of such Party.

6.4         Counterparts and Facsimile.  For the convenience of the Parties, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement.  Executed signature pages to this Agreement may be delivered by facsimile and such facsimiles shall be deemed as sufficient as if manually signed signature pages had been delivered.

6.5         Governing Law.  This Agreement will be governed by and construed in accordance with the Laws of the State of California applicable to contracts made and to be performed entirely within such State.

6.6         WAIVER OF JURY TRIAL.  TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, INVESTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY WHETHER BASED ON CONTRACT, EQUITY, TORT OR ANY OTHER THEORY.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN BY INVESTOR, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

6.7        Notices.  Any notice, request, instruction or other document to be given hereunder by any Party to the other will be in writing and will be deemed to have been duly given (a) on the date of delivery if delivered personally or by telecopy or facsimile, upon confirmation of receipt, (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid, provided that any such notice, request, instruction or other document to be given hereunder shall not be deemed to have been duly given unless and until it is sent via electronic mail to the recipient thereof.  All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice.

(a)          If to the Investor, to the address set forth on the Investor’s signature page to this Agreement.

(b)          If to the Company:

Broadway Financial Corporation

      5055 Wilshire Boulevard, Suite 500

      Los Angeles, California 90036

      Attn: Brenda Battey,

Chief Financial Officer

Email: bbattey@broadwayfederalbank.com

with a copy (which copy shall not constitute notice) to:

Arnold & Porter LLP

777 South Figueroa Street,

      44th Floor

Los Angeles, California 90017

      Attn: James R. Walther, Esq.

      Fax: \(213\) 243-4199

Email: James.Walther@arnoldporter.com

33

6.8         Entire Agreement.  This Agreement constitutes the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, inducements or conditions, both written and oral, among the Parties, with respect to the subject matter hereof and thereof.

6.9       Successors

          and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns, including any purchasers of the Common Stock to be issued pursuant to this Agreement.  The
      Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor.  The Investor may assign some or all of its rights hereunder or thereunder without the consent of the Company to any
      Affiliate of the Investor, and such assignee shall be deemed to be an Investor hereunder with respect to such assigned rights and shall be bound by the terms and conditions of this Agreement that apply to the Investor.

6.10       Captions.  The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.

6.11       Severability.  If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon 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.

6.12       Third Party Beneficiaries.  Nothing contained in this Agreement, expressed or implied, is intended to confer upon any Person other than the Parties, any benefit right or remedies, except that the Placement Agents may rely on the representations and warranties contained herein to the same extent as if they were party to this Agreement and the provisions of Sections 5.1 and 5.2 shall inure to the benefit of the Persons referred to in such Sections.

34

6.13       Public Announcements.  The Investor will not make (and will use its reasonable best efforts to ensure that its Affiliates and representatives do not make) any news release or public disclosure with respect to this Agreement and any of the transactions contemplated hereby, without first consulting with the Company and, in each case, also receiving the Company’s consent (which shall not be unreasonably withheld, conditioned or delayed).

6.14      Specific

          Performance.  The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms.  It is accordingly agreed that the Parties
      shall be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity.

6.15      No

          Recourse to Other Persons.  This Agreement may only be enforced against the named Parties.  All claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or
      performance of this Agreement may be made only against the entities that are expressly identified as Parties or that are subject to the terms hereof, and no past, present or future director, officer, employee, incorporator, member, manager,
      partner, stockholder, Affiliate, agent, attorney or representative of any Party \(including any person negotiating or executing this Agreement on behalf of a Party\) shall have any liability or obligation with respect to this Agreement or with
      respect to any claim or cause of action, whether in tort, contract or otherwise, that may arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement and the transactions contemplated hereby.

[signature page follows]

35

IN WITNESS WHEREOF, the Parties 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:
Name: Wayne-Kent A. Bradshaw
Title: President and Chief Executive Officer

[Stock Purchase Agreement]

Grace & White, Inc. Profit Sharing Plan
By:
Name: Gerald I. White
Title: Trustee
Address for notices:
---
Marc Ravitz
Grace & White, Inc.
515 Madison Ave.
Suite 1700
NY, NY 10022

[Stock Purchase Agreement]

Execution Version

Exhibit 10.30

BROADWAY FINANCIAL CORPORATION

STOCK PURCHASE AGREEMENT

February 19, 2021

TABLE OF CONTENTS

Page
ARTICLE 1. PURCHASE; CLOSING 2
1.1 Issuance, Sale and Purchase 2
1.2 Closing; Deliverables for the Closing; Conditions to the Closing 2
ARTICLE 2. REPRESENTATIONS AND WARRANTIES 5
2.1 Certain Terms 5
2.2 Representations and Warranties of the Company 5
2.3 Representations and Warranties of the Investor 19
ARTICLE 3. COVENANTS 22
3.1 Conduct of Business Prior to Closing 22
3.2 Use of Proceeds 22
3.3 Regulatory Filings 22
3.4 Confidentiality 22
3.5 Publicity 23
3.6 Commercially Reasonable Efforts 23
3.7 Legend. 23
3.8 Exchange Listing 24
3.9 Authorized Shares 24
3.10 Rule 144 Reporting 24
ARTICLE 4. TERMINATION 24
4.1 Termination 24
4.2 Effects of Termination 25
ARTICLE 5. INDEMNITY 26
5.1 Indemnification by the Company 26
5.2 Indemnification by the Investor 26
5.3 Notification of Claims 27
5.4 Indemnification Payment 29
5.5 Exclusive Remedies 29
ARTICLE 6. MISCELLANEOUS 29
6.1 Survival 29
6.2 Other Definitions 29
6.3 Amendment and Waivers 32

i

6.4 Counterparts and Facsimile 32
6.5 Governing Law 32
6.6 WAIVER OF JURY TRIAL 33
6.7 Notices 33
6.8 Entire Agreement 33
6.9 Successors and Assigns 34
6.10 Captions 34
6.11 Severability 34
6.12 Third Party Beneficiaries 34
6.13 Public Announcements 34
6.14 Specific Performance 34
6.15 No Recourse to Other Persons 34

INDEX OF DEFINED TERMS

Page
Action 8
Affiliate 30
Agency 30
Agreement 1
Authorized Shares Increase Approval 3
Bank 6
Bank Merger 1
Benefit Plans 15
Board of Directors 30
Business Day 30
Capital Stock 30
CDFI 6
CFB 1
Class A Common Stock 1
Class B Common Stock 1
Class C Common Stock 1
Closing 2
Closing Date 2
Code 30
Company 1
Company Employees 15
Company Financial Statements 9
Company Indemnified Parties 26

ii

Company Insurance Policies 15
Company IT Assets 10
Company Reports 9
Company Specified Representations 30
Company Stock Plan 7
Company Subsidiaries 6
Company Subsidiary 6
Concurrent Other Transactions 1
control 30
controlled by 30
controlling 30
Disclosure Schedule 30
Disqualification Event 18
EESA 16
ERISA 15
ERISA Affiliate 16
Exchange Act 9
FDIC 6
GAAP 30
Governmental Authorizations 13
Governmental Consent 31
Governmental Entity 31
Indemnified Party 27
Indemnifying Party 27
Insider 18
Insurer 31
Intellectual Property Rights 15
Investment 1
Investor 1
Investor Indemnified Parties 26
Investor Specified Representations 31
Knowledge 31
Law 13
Liens 8
Loan Investor 31
Losses 31
Material Adverse Effect 5
Merger 1
Merger Agreement 1
Merger Transactions 1
Multiemployer Plan 16
OFAC 12
Parties 1
Per Share Purchase Price 2
Person 31

iii

Placement Agents 1
Preferred Stock 6
Previously Disclosed 5
Purchase Price 2
Rule 506 18
SEC 5
Securities Act 7
Shares 2
SLHCA Act 6
Stockholder Approval 3
Subsidiary 31
Surviving Bank 1
Tax 32
Tax Return 32
Taxes 32
Third Party Claim 27
Threshold Amount 26
under common control with 30
Voting Debt 8
Voting Securities 32

iv

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Agreement”) is dated as of February 19, 2021, and is entered into by and among Broadway Financial Corporation, a Delaware corporation (the “Company”),

      Butterfield Trust \(Bermuda\) Limited as Trustee \(the “Trustee”\) of each of the following: The Lorraine Grace Will Trust, The Anne Grace Kelly Trust 99, The Gwendolyn Grace Trust 99, The Lorraine L.
      Grace Trust 99, and The Ruth Grace Jervis Millennium Trust \(each, together with the Trustee, an “Investor”, and together with the Company, the “Parties”\).

RECITALS

WHEREAS, the Company is a party to that certain Agreement and Plan of Merger (the “Merger Agreement”) with CFBanc Corporation, a District of Columbia benefit corporation (“CFB”) which provides, among other things and subject to the terms and conditions of the Merger Agreement, for (i) the merger of CFB with and into the Company, with the Company continuing as the surviving entity in the Merger (the “Merger”), (ii) immediately following the Merger, Broadway Federal Bank, f.s.b., a wholly owned subsidiary of the Company, will merge with and into City First Bank of D.C., National Association (“CFB Sub”), a wholly owned subsidiary of CFB (the “Bank Merger” and together with the Merger and the

    other transactions contemplated by the Merger Agreement, the “Merger Transactions”\), with CFB Sub continuing as the surviving entity \(the “Surviving Bank”\), and \(iii\) the Company’s voting common stock, par value $0.01 per share, will be renamed Class A Common Stock \(“Class A Common Stock”\), a new class of non-voting common stock of the Company, par value $0.01 per share, will be created which will be named Class B Common Stock \(“Class

        B Common Stock”\) and the Company’s currently authorized non-voting common stock, par value $0.01 per share, will be renamed Class C Common Stock \(the “Class C Common Stock” and
    collectively, the “Common Stock” \);

WHEREAS, the Company has engaged Raymond James & Associates, Inc. and Keefe, Bruyette & Woods, Inc. as co-placement agents (the “Placement Agents”) for the offering of the Common Stock.

WHEREAS, the Company desires to issue and sell to each Investor, and the Investor desires to purchase from the Company, on the terms and conditions described herein, shares of Class A Common Stock set forth on Annex A at the Per Share Purchase Price specified herein (the “Investment”);

WHEREAS, the Investment is proposed to be made subject to completion of the Merger Transactions;

WHEREAS, the Investment is proposed to be made concurrently with the sale by the Company of shares of Class A Common Stock and Class C Common Stock at the Per Share Purchase Price via private placement to certain other investors (the “Concurrent Other Transactions”); and

NOW, THEREFORE, in consideration of the premises, and of the respective representations, warranties, covenants and other agreements of the Parties set forth herein, Company and each Investor, severally and not jointly hereby agree as follows:

ARTICLE 1.

PURCHASE; CLOSING

1.1          Issuance,

        Sale and Purchase.  On the terms and subject to the conditions set forth herein, the Company agrees to issue and sell to each Investor, and each Investor agrees to purchase from the Company, free and clear of any Liens, the shares of
    Class A Common Stock set forth on Annex A hereto opposite such Investor’s name \(with respect to each Investor, the “Shares”\) at a per share purchase price of $1.78 \(the “Per Share Purchase Price”\), payable to the Company in immediately available funds at the Closing.  The aggregate purchase price payable pursuant to this Section 1.1 is referred to herein as the “Purchase Price”\).

1.2          Closing;

        Deliverables for the Closing; Conditions to the Closing.

(a)         Closing.  Unless this Agreement has been terminated pursuant to Article 4, and subject to the satisfaction or, to the extent permitted by Law and this Agreement, the written waiver of the conditions set forth in Section 1.2(c), the closing of the transaction contemplated by this Agreement (the “Closing”) shall take place at the offices of Arnold & Porter LLP, located at 777 South Figueroa Street, 44th Floor, Los Angeles, California 90017, or remotely via the electronic or other exchange of documents and signature pages, at 9:00 a.m. Pacific Time on the second Business Day after the satisfaction or, if permissible, waiver of the conditions set forth in Section 1.2(c) (other than those which by their nature are to be satisfied at Closing, but subject to the satisfaction or waiver of such conditions), or at such other place or such other date as may be agreed to by the Parties (the “Closing Date”).

(b)          Closing Deliverables.  Subject to the satisfaction or permitted waiver of the conditions to the Closing set forth in Section 1.2(c), at the Closing the Parties shall make the following deliveries:

(i)          the Company shall deliver to each Investor one or more certificates evidencing the Shares registered in the name of such Investor (or if the Shares are to be uncertificated, the Company shall deliver appropriate evidence of such registration of the Shares in the name of such Investor);

(ii)      the Company shall deliver to the Trustee a schedule setting forth the aggregate number of shares of each class of Capital Stock outstanding immediately after giving effect to the Merger Transactions, the Concurrent Other Transactions and the transactions contemplated hereby; and

(iii)       each Investor shall deliver or shall cause to be delivered the Purchase Price by wire transfer of immediately available funds to the account specified by the Company for this purpose by notice to the Investor prior to the Closing.

(c)          Closing Conditions.

(i)         The obligations of each Investor, on the one hand, and the Company, on the other hand, to consummate the purchase and sale of the Shares provided for in this Agreement are each subject to the satisfaction or, to the extent permitted by Law and this Agreement, the waiver by the Company or the Trustee, as applicable, of the following conditions to the Closing under this Agreement:

2

(A)          All Governmental Consents required to have been obtained at or prior to the Closing Date in connection with the execution, delivery or performance of this Agreement and the consummation of the transactions contemplated hereby shall have been obtained and shall be in full force and effect.

(B)          The Merger Transactions shall have been consummated in accordance with the Merger Agreement, including the approval of the Merger Agreement by the stockholders of each of the Company and CFB;

(C)       If required under applicable Law or the rules and regulations of the Nasdaq Stock Market, the approval by stockholders of the Company of resolutions providing for the Company’s issuance of the maximum number of shares of Common Stock to be issued under this Agreement and in the Concurrent Other Transactions in accordance with this Agreement, the definitive documentation relating to the Concurrent Other Transactions, and applicable Law and the rules and regulations of the Nasdaq Stock Market (such approval being referred to herein as the “Stockholder Approval”) shall have been obtained;

(D)         Approval by the stockholders of the Company to increase in the authorized number of shares of Voting Common Stock (which will become Class A Common Stock upon completion of the Merger) from 50,000,000 shares to 75,000,000 shares, to be effected by the filing of an amended and restated certificate of incorporation of the Company (the “Authorized Shares Increase Approval”), shall have been obtained.

(ii)       The obligation of the Investor to consummate the purchase of Shares provided for in this Agreement is also subject to the satisfaction or waiver by the Investor of the following conditions to the Closing:

(A)         (i) The Company Specified Representations shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date and (ii) the other representations and warranties of the Company set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except, in the case of this clause (ii) only, to the extent that the failure to be true and correct (without regard to any materiality or Material Adverse Effect qualifications contained therein), would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and except, in the case of clauses (i) and (ii), that representations and warranties made as of a specified date shall be true and correct as of such date;

(B)         The Company shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date;

3

(C)          The Trustee shall have received a certificate, dated as of the Closing Date, signed on behalf of the Company by a senior executive officer certifying to the effect that the conditions set forth in Section 1.2(c)(ii)(A), Section 1.2(c)(ii)(B) and Section 1.2(c)(ii)(D) have been satisfied on and as of the Closing Date; and

(D)          Since the date of this Agreement, no Material Adverse Effect shall have occurred and no change or other event shall have occurred that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(iii)      The obligation of the Company to consummate the sale of the Shares provided for in this Agreement is also subject to the satisfaction or written waiver by the Company of the following conditions to the Closing:

(A)          The representations and warranties of each Investor set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except to the extent that the failure to be true and correct (without regard to any materiality qualifications contained therein) would not materially adversely affect the ability of the Investor to perform its obligations hereunder and except that (1) representations and warranties made as of a specified date shall be true and correct as of such date and (2) the representations and warranties of the Investor set forth in Sections 2.3(d) and 2.3(f) shall be true and correct in all respects;

(B)          Each Investor shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date; and

(C)          The Company shall have received a certificate, dated as of the Closing Date, signed on behalf of the Investor by a duly authorized person certifying to the effect that the conditions set forth in Section 1.2(c)(iii)(A) and Section 1.2(c)(iii)(B) have been satisfied on and as of the Closing Date.

4

ARTICLE 2.

REPRESENTATIONS AND WARRANTIES

2.1         Certain Terms.

(a)        As used in this Agreement, the term “Material Adverse Effect” means any circumstance, event, change, development or effect that, individually or in the aggregate, would reasonably be expected to (i) result in a material adverse effect on the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole, or (ii) materially impair or delay the ability of the Company or any of the Company Subsidiaries to perform its or their obligations under this Agreement to consummate the Closing or any of the transactions contemplated hereby; provided, however, that in determining whether a Material Adverse Effect has occurred under clause (i), there shall be excluded any circumstance, event, change, development or effect to the extent resulting from (A) actions or omissions of the Company or any Company Subsidiary expressly required or contemplated by the terms of this Agreement, (B) changes after the date hereof in general economic conditions in the United States, including financial market volatility or downturns, or in the markets in which the Company and the Company Subsidiaries operate, (C) changes after the date hereof affecting the banking industry generally, (D) any changes after the date hereof in applicable Laws or accounting rules or principles, including changes in GAAP, (E) changes in the market price or trading volume of the Common Stock or the Company’s other outstanding securities (but not the underlying causes of such changes), (F) any epidemic, pandemic or disease outbreak (including the Covid-19 virus) including any worsening of such conditions; or (G) any failure by the Company or any of the Company Subsidiaries to meet any internal projections or forecasts with regard to the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole (but not the underlying causes of such failure), in each case to the extent that such circumstance, event, change, development or effect referred to in clauses (B), (C) and (D) do not have a disproportionate effect on the Company and the Company Subsidiaries compared to other participants in the industries or markets in which the Company and the Company Subsidiaries operate.

(b)         As used in this Agreement, the term “Previously Disclosed” (i) with regard to any Party, means information set forth in its Disclosure Schedule under Section references corresponding with the provision of this Agreement to which such information relates (including, in the case of the Company, information identified in the Company’s Disclosure Schedule); provided, however, that if such information is disclosed in such a way as to make its relevance or applicability to another provision of this Agreement reasonably apparent on its face, such information shall be deemed to be responsive to such other provision of this Agreement and (ii) with regard to the Company, includes information publicly disclosed by the Company in any reports, schedules, forms, statements and other documents filed or furnished by the Company under the Securities Act and the Exchange Act with the Securities and Exchange Commission (the “SEC”), including pursuant to Section 13(a) or 15(d) thereof, since December 31, 2017, in each case available prior to the date of this Agreement (excluding any risk factor disclosures contained in such documents under the heading “Risk Factors” and any disclosure of risks included in any “forward-looking statements” disclaimer or other statements that are similarly non-specific and are predictive or forward-looking in nature). Notwithstanding anything in this Agreement to the contrary, the mere inclusion of an item in a Disclosure Schedule shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

2.2         Representations

        and Warranties of the Company.  Except as Previously Disclosed, the Company hereby represents and warrants to each Investor, as of the date of this Agreement and as of the Closing Date \(except for the representations and warranties
    that are as of a specific date, which are made as of that date\) that:

5

(a)          Organization and Authority.  Each of the Company and the Company Subsidiaries is a corporation or other entity duly organized and validly existing under the laws of the jurisdiction of its incorporation or organization. Each of the Company and the Company Subsidiaries is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, except where any failure to be so qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  Each of the Company and the Company Subsidiaries has the corporate or other organizational power and authority to own its properties and assets and to carry on its business as it is now being conducted.  The Company has Previously Disclosed correct and complete copies of the certificate of incorporation and bylaws (or similar governing documents) as amended through the date of this Agreement for the Company and Broadway Federal Bank, f.s.b. (the “Bank”).  The Company is duly registered with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) as a savings and loan holding company under the Savings and Loan Holding Company Act, as amended, 12 U.S.C. 1467a (the “SLHCA Act”).  As of the date hereof, the Company is a certified “community development financial institution” designated as such under the Community Development Banking and Financial Institutions Act of 1994, as amended (12 U.S.C. Sections 5311 et seq.) and its implementing regulations, as applicable (a “CDFI”).  Following the consummation of the Bank Merger, the Surviving Bank will apply to be designated as a CDFI.

(b)         Company Subsidiaries.  As of the date of this Agreement, the Company has Previously Disclosed a true, complete and correct list of each entity in which the Company, directly or indirectly, owns sufficient capital stock or holds a sufficient equity or similar interest such that it is consolidated with the Company in the financial statements of the Company or has the power to elect a majority of the board of directors or other persons performing similar functions (each, a “Company Subsidiary” and, collectively, the “Company Subsidiaries”).

    Except for the Company Subsidiaries and as Previously Disclosed, the Company does not own beneficially or control, directly or indirectly, more than 5% of any class of equity securities or similar interests of any corporation, bank, business trust,
    association or similar organization, and is not, directly or indirectly, a partner in any general partnership or party to any joint venture or similar arrangement.  The Company owns, directly or indirectly, all of its interests in each Company
    Subsidiary free and clear of any and all Liens.  No equity security of any Company Subsidiary is or may be required to be issued by reason of any option, warrant, scrip, preemptive right, right to subscribe to, gross-up right, call or commitment of
    any character whatsoever relating to, or security or right convertible into, shares of any capital stock or other interest of such Company Subsidiary, and there are no contracts, commitments, understandings or arrangements by which any Company
    Subsidiary is bound to issue additional shares of its capital stock or other interest, or any option, warrant or right to purchase or acquire any additional shares of its capital stock.  The deposit accounts of the Bank are insured by the Federal
    Deposit Insurance Corporation \(“FDIC”\) to the fullest extent permitted by the Federal Deposit Insurance Act, as amended, and the rules and regulations of the FDIC thereunder, and all premiums and
    assessments required to be paid in connection therewith have been paid when due \(after giving effect to any applicable extensions\). The Company beneficially owns all of the outstanding capital securities of, and has sole control of, the Bank.

(c)          Capitalization.

(i)         Except as set forth on the Disclosure Schedule, as of the date hereof, the authorized Capital Stock of the Company consists of 50,000,000 shares of Voting Common Stock, par value $0.01 per share (“Voting Common Stock”), 25,000,000 shares of Non-Voting Common Stock, par value $0.01 (“Non-Voting Common Stock”), and 1,000,000 shares of preferred stock, par value $0.01 (“Preferred Stock”).

6

(ii)        As of the date hereof, before giving effect to the transaction provided for herein, the Merger Transactions and the Concurrent Other Transactions the Company has issued and outstanding: (i) 19,281,758 of shares of Voting Common Stock, including 556,169 shares of Voting Common Stock granted in respect of outstanding restricted stock awards, (ii) 1,637,902 shares of Voting Common Stock held by the trust for the Broadway Federal Bank, f.s.b. Employee Stock Ownership Plan, and (iii) 8,756,396 shares of Non-Voting Common Stock.

(iii)       As of the date hereof, other than in respect of awards outstanding under or issuable pursuant to the Company’s 2008 Long-Term Incentive Plan (the “Company

        Stock Plan”\) consisting of options to purchase an aggregate of 450,000 shares of common stock, and except in connection with this Agreement and the transactions contemplated hereby, the Merger Agreement and the Concurrent Other
    Transactions, the Company has not \(A\) agreed to issue or authorized the issuance after the date hereof of any shares of Common Stock or Preferred Stock, or any securities convertible into or exchangeable or exercisable for shares of Common Stock or
    Preferred Stock, \(B\) reserved for issuance any shares of Capital Stock of the Company or \(C\) repurchased or redeemed, or agreed to or authorized the repurchase or redemption of, any shares of Capital Stock of the Company.

(iv)        All of the issued and outstanding shares of Capital Stock of the Company have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, except for the preemptive rights granted to certain institutional stockholders of the Company identified on Schedule 2.2(c)(iv) of the Company’s Disclosure Schedule.  None of the outstanding shares of Capital Stock or other securities of the Company or any of the Company Subsidiaries was issued, sold or offered by the Company or any Company Subsidiary in violation of the Securities Act of 1933, as amended (the “Securities Act”) or the securities or blue sky laws of any state or jurisdiction, or in violation of any agreement, arrangement or commitment to which the Company was or is a party or subject, or in violation of any preemptive or similar rights of any Person.  No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which the stockholders of the Company may vote (“Voting Debt”) are issued and outstanding.

(v)        As of the date of this Agreement, except for the outstanding awards under the Company Stock Plan, the Company does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of, or securities or rights convertible into or exchangeable or exercisable for, any shares of Capital Stock or Voting Debt of the Company.

(d)          Authorization; No Conflicts.

(i)        The Company has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The Board of Directors has approved the transactions contemplated by this Agreement.  This Agreement has been duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery by the Investor, is the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles (whether applied in equity or at law).

7

(ii)         Neither the execution and delivery by the Company of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by the Company with any of the provisions hereof, will, with or without the passage of time and giving of notice, (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any liens, charges, adverse rights or claims, pledges, covenants, title defects, security interests or other encumbrances of any kind (“Liens”) upon any of the properties or assets of the Company or any Company Subsidiary, under any of the terms, conditions or provisions of (1) the certificate of incorporation or bylaws (or similar governing documents) of the Company and each Company Subsidiary or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any of the Company Subsidiaries is a party or by which it may be bound, or to which the Company or any of the Company Subsidiaries, or any of the properties or assets of the Company or any of the Company Subsidiaries may be subject, or (B) violate any Law applicable to the Company or any of the Company Subsidiaries or any of their respective properties or assets except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(e)         Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of this Agreement or for the sale by the Company of Common Stock to the Investor pursuant to this Agreement.

(f)         Litigation and Other Proceedings.  Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, or as would not reasonably be expected to adversely impact the reputation of the Company, the Company Subsidiaries or their respective investors in any material respect, there is no pending or, to the Knowledge of the Company, threatened claim, action, suit, arbitration, complaint, charge or investigation or proceeding (each an “Action”) against the Company or any Company Subsidiary or any of their respective assets, rights or properties, nor is the Company or any Company Subsidiary a party or named as subject to the provisions of any order, writ, injunction, settlement, judgment or decree of any court, arbitrator or government agency, or instrumentality.  There has not been, and to the Knowledge of the Company, there is not pending or contemplated, any investigation or other Action by the SEC involving the Company or any current or former director or officer of the Company in his or her capacity as such.

8

(g)       Financial Statements.  The audited consolidated balance sheets of the Company and the Company Subsidiaries and the related consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2019 and the unaudited consolidated balance sheets of the Company and the Company Subsidiaries and the related unaudited consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s quarterly reports on Form 10-Q filed with the SEC for the quarterly period ending September 30, 2020 (the “Company Financial Statements”) (i) have been prepared from, and are in accordance with, the books and records of the Company and the Company Subsidiaries, (ii) complied, as of the date of such filing, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, (iii) have been prepared in accordance with GAAP applied on a consistent basis and (iv) present fairly in all material respects the consolidated financial position of the Company and the Company Subsidiaries at the dates and the consolidated results of operations, changes in stockholders’ equity and cash flows of the Company and the Company Subsidiaries for the periods stated therein.

(h)       Reports.  Since December 31, 2017, the Company and each Company Subsidiary have filed all material reports, registrations, documents, filings, statements and submissions, together with any required amendments thereto, that they were required to file with any Governmental Entity, including all those required under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof (the foregoing, collectively, being referred to herein as the “Company Reports”) and have paid all material fees and assessments due and payable in connection therewith.  As of their respective filing dates, or as subsequently amended prior to the date hereof, the Company Reports complied in all material respects with all statutes and applicable rules and regulations of the applicable Governmental Entities.  As of the date of this Agreement, there are no outstanding comments from the SEC or any other Governmental Entity with respect to any Company Report that were the subject of written correspondence that have not been resolved.  The Company Reports, including the documents incorporated by reference in each of them, each contained all the information required to be included in it and, when it was filed and, as of the date of each such Company Report filed with the SEC, or if amended prior to the date of this Agreement, as of the date of such amendment, did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in it, in light of the circumstances under which they were made, not misleading and complied as to form in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  No executive officer of the Company has failed in any respect to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002.

9

(i)         Internal Accounting and Disclosure Controls.  The records, systems, controls, data and information of the Company and the Company Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of the Company or the Company Subsidiaries (including all means of access thereto and therefrom) or reputable banking industry service providers, except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have an adverse effect on the system of internal accounting controls described below in this Section 2.2(i).  The Company (i) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) intended to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known to the chief executive officer and the chief financial officer of the Company by others within those entities, and (ii) has disclosed, based on its most recent evaluation prior to the date of this Agreement, to the Company’s outside auditors and the audit committee of the Board of Directors (A) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information, and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.  As of the date of this Agreement, the Company has no Knowledge of any reason that its outside auditors and its chief executive and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when due.  Since December 31, 2017, neither the Company nor any Company Subsidiary nor, to the Knowledge of the Company, any director, officer, employee, auditor, accountant or representative of the Company or any Company Subsidiary has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any Company Subsidiary or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any Company Subsidiary has engaged in questionable accounting or auditing practices.

(j)           Data Privacy

(i)         The Company and the Company Subsidiaries have taken commercially reasonable steps consistent with customary industry practices to protect the confidentiality, integrity, availability and security of the computers, servers, workstations, routers, hubs, switches, circuits, networks and other information technology equipment owned or controlled by them or by any third party and material to the Company and the Company Subsidiaries (the “Company IT Assets”) (and all information and transactions stored or contained therein or transmitted thereby) against any unauthorized use, access, interruption, modification or corruption, and there has been no unauthorized use, access, interruption, modification or corruption of the Company IT Assets.

(ii)       In connection with their receipt, purchase, collection, securing, safeguarding, storage, transfer (including any transfer across national borders), disclosure, destruction/disposal, and/or use or other processing of any Personal Information, each of the Company and the Company Subsidiaries, is and has been, in material compliance with all Privacy Laws, their respective privacy policies and the requirements of any contract or codes of conduct to which any of the Company or the Company Subsidiaries is a party.  The privacy policies of the Company are customary for the industry in which the Company operates.  The Company and the Company Subsidiaries have commercially reasonable and appropriate physical, technical, organizational, and administrative security measures and policies in place designed to protect all Personal Information collected by them or on their behalf from and against unauthorized access, use, interruption, modification, corruption, and/or disclosure.  The Company and the Company Subsidiaries have binding written agreements obligating (in accordance with and as required by Privacy Laws (as applicable)) all third parties collecting, accessing, receiving, storing or processing Personal Information on behalf of the Company and the Company Subsidiaries to (i) comply with all applicable Privacy Laws, (ii) take commercially reasonable and appropriate steps to protect and secure such Personal Information from and against unauthorized access, use interruption, modification, corruption, and/or disclosure which are no less stringent than those applied by the Company and the Company Subsidiaries and (iii) promptly notify the Company and the Company Subsidiaries of any unauthorized access, use interruption, modification, corruption, and/or disclosure of Personal Information or Company IT Assets processing Personal Information.  The Company and the Company Subsidiaries are, and since December 31, 2017, have been, in compliance in all material respects with all Privacy Laws and any other applicable Laws in all relevant jurisdictions relating to data loss, theft and breach of security notification obligations.  Since December 31, 2017, none of the Company or any of the Company Subsidiaries has experienced a material breach of its information technology systems or a data loss or theft as defined by the Laws in all relevant jurisdictions.  None of the Company or any of the Company Subsidiaries has been charged with, or received any notice of any claims of, the violation in any material respect of any Privacy Laws or any of their respective privacy policies.  The consummation of the transactions contemplated hereby will not breach or otherwise cause any violation of any Privacy Law.

10

(iii)        For the purposes of this Section 2.2(j):

(1)            “Personal Information” means, in addition to any definition provided by applicable law or by the Company and the Company Subsidiaries in any of their respective privacy policies, contracts, or other public-facing statements for any similar term (e.g., “personally identifiable information” or “PII”), all information identifying, regarding or capable of being associated with an individual person or device.  Personal Information may relate to any individual, including a current, prospective or former client (or a client’s customer or end user) or employee of any Person, and includes information in any form, including paper, electronic and other forms.

(2)           “Privacy Laws” means all applicable laws, legal requirements, and self-regulatory guidelines and principles relating to privacy, data security, and Personal Information and similar applicable consumer protection laws, including with respect to the receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security, disposal, destruction, disclosure or transfer of Personal Information and any and all applicable laws governing breach notification in connection with Personal Information.  As used in this Agreement, “Privacy Laws” shall include the California Consumer Privacy Act, General Data Protection Regulation and the rules and regulations promulgated thereunder, and applicable state laws.

(k)        No Undisclosed Liabilities.  There are no liabilities of the Company or any of the Company Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, except for (i) liabilities adequately reflected or reserved against in accordance with GAAP in the Company’s audited balance sheet as of December 31, 2019 and (ii) liabilities that have arisen in the ordinary and usual course of business and consistent with past practice since December 31, 2019 and that have not or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

11

(l)       Mortgage Lending.  The Company and each of the Company Subsidiaries have complied in all material respects with, and all documentation in connection with the origination, processing, underwriting and credit approval of any mortgage loan originated, purchased or serviced by the Company or any Company Subsidiary has satisfied, in all material respects (i) all Laws with respect to the origination, insuring, purchase, sale, servicing, or filing of claims in connection with mortgage loans, including all Laws relating to real estate settlement procedures, consumer credit protection, truth in lending laws, usury limitations, fair housing, transfers of servicing, collection practices, equal credit opportunity and adjustable rate mortgages, (ii) the responsibilities and obligations relating to mortgage loans set forth in any agreement between the Company and any Agency, Loan Investor or Insurer, (iii) the applicable rules, regulations, guidelines, handbooks and other requirements of any Agency, Loan Investor or Insurer and (iv) the terms and provisions of any mortgage or other collateral documents and other loan documents with respect to each mortgage loan.

(m)       Bank Secrecy Act; Anti-Money Laundering; OFAC; and Customer Information.  The Company is not aware of, has not been advised of, and, to the Knowledge of the Company, has no reason to believe that any facts or circumstances exist that would cause it or any Company Subsidiary to be deemed to be not operating in compliance, in all material respects, with the Bank Secrecy Act of 1970, as amended, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (also known as the USA PATRIOT Act), any order or regulation issued by the Treasury’s Office of Foreign Assets Control (“OFAC”), or any other applicable anti-money laundering or anti-terrorist-financing statute, rule or regulation.  The Company is not aware of any facts or circumstances that would cause it to believe that any nonpublic customer information has been disclosed to or accessed by an unauthorized third party in a manner that would cause it to undertake any material remedial action.  The Company and each of the Company Subsidiaries have adopted and implemented an anti-money laundering program that contains adequate and appropriate customer identification verification procedures that comply with the USA PATRIOT Act and such anti-money laundering program meets the requirements in all material respects of Section 352 of the USA PATRIOT Act and the regulations thereunder, and they have complied in all respects with any requirements to file reports and other necessary documents as required by the USA PATRIOT Act and the regulations thereunder.  The Company will not directly or indirectly use the proceeds of the sale of the Common Stock pursuant to transactions contemplated by this Agreement, or lend, contribute or otherwise make available such proceeds to any Company Subsidiary, joint venture partner or other Person, towards any sales or operations in any country appearing on the OFAC Specially Designated Nationals List (“SDN List”) or for the purpose of financing the activities of any Person currently appearing on the SDN List.

12

(n)         Certain Payments.  Neither the Company nor any of the Company Subsidiaries, nor any directors or officers of the Company, nor to the Knowledge of the Company, employees or any Affiliates of the Company or the Company Subsidiaries or any other Person who to the Knowledge of the Company is associated with or acting on behalf of the Company or any of the Company Subsidiaries has directly or indirectly (i) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment in material violation of any Law, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable anti-bribery or anti-corruption laws, to any Person, private or public, regardless of form, whether in money, property, or services (A) to obtain favorable treatment in securing business for the Company or any of the Company Subsidiaries, (B) to pay for favorable treatment for business secured by the Company or any of the Company Subsidiaries, or (C) to obtain special concessions or for special concessions already obtained, for or in respect of the Company or any of the Company Subsidiaries or (ii) established or maintained any fund or asset with respect to the Company or any of the Company Subsidiaries that was required by Law or GAAP to have been recorded and was not recorded in the books and records of the Company or any of the Company Subsidiaries.  Neither the Company nor any Company Subsidiaries has conducted any internal investigation, made any voluntary, directed, or involuntary disclosure to any Governmental Entity, or received any audit report, written communication from a Governmental Entity, or whistleblower or other written complaint, involving alleged violations in any material respect of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable anti-bribery or anti-corruption laws on the part of the Company, any of the Company Subsidiaries, or any Person acting on behalf of the Company or any of the Company Subsidiaries.

(o)        Absence of Certain Changes.  Since December 31, 2019 and except as Previously Disclosed or as required or contemplated by the terms of this Agreement, (i) the Company and the Company Subsidiaries have conducted their respective businesses in all material respects in the ordinary and usual course of business consistent with past practices, (ii) through (and including) the date of this Agreement, no fact, event, change, condition, development, circumstance or effect has occurred that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (iii) no material default (or event which, with notice or lapse of time, or both, would constitute a material default) exists on the part of the Company or any Company Subsidiary in the due performance and observance of any term, covenant or condition of any agreement to which the Company or any Company Subsidiary is a party and which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(p)          Compliance with Laws.

(i)         The Company, each Company Subsidiary and each of their officers, agents, representatives and employees possesses, holds and have all material permits, licenses, franchises, authorizations, orders, consents, registrations, accreditations and approvals of, and have made all filings, applications and registrations with, Governmental Entities that are required in order to permit the Company and each Company Subsidiary to own or lease their properties and assets and to carry on their business as presently conducted and that are material to the business of the Company and each Company Subsidiary (collectively, the “Governmental Authorizations”).  The Company and the Company Subsidiaries, and to the Company’s Knowledge, their respective officers, agents, representatives and employees, are not in default under any of such Governmental Authorizations, which default(s) would be, or be reasonably expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries (taken as a whole).  The Company and each Company Subsidiary have complied with and (A) are not, and since December 31, 2017, have not been, in default or violation in any respect of, (B) are not under investigation with respect to, and (C) have not been threatened to be charged with or given notice of any material violation of, any applicable material domestic (federal, state or local) or foreign law, statute, ordinance, license, rule, regulation, policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental Entity (each, a “Law”),

    other than such noncompliance, defaults or violations as would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries \(taken as a whole\).  No Governmental Entity has placed any
    material restriction on the business or properties of the Company or any of the Company Subsidiaries.  As of the date hereof, the Bank has a Community Reinvestment Act rating of “outstanding.”

13

(ii)         Except for normal examinations conducted by a Governmental Entity in the ordinary course of business of the Company and the Company Subsidiaries, (A) no Governmental Entity has initiated or has pending any proceeding or, to the Knowledge of the Company, investigation into the business or operations of the Company or any of the Company Subsidiaries since December 31, 2017, (B) there is no unresolved violation or exception by any Governmental Entity with respect to any report or statement relating to any examinations or inspections of the Company or any of the Company Subsidiaries, and (C) there have been no formal or informal inquiries by, or disagreements or disputes with, any Governmental Entity with respect to the business, operations, policies or procedures of the Company or any of the Company Subsidiaries since December 31, 2017, in each case of clauses (A) through (C), which would reasonably be expected, individually or in the aggregate, to be material to the Company and the Company Subsidiaries (taken as a whole).

(iii)       The Company and the Company Subsidiaries are not, and since December 31, 2017, have not been, in violation or default of any provisions of their respective certification of incorporation or bylaws (or similar governing documents).

(q)         Adequate Capitalization.  As of September 30, 2020, the Bank met or exceeded the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.  As of the Closing and after giving effect to this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions, the Bank meets or exceeds the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.

(r)         Agreements with Regulatory Agencies.  The Company and the Company Subsidiaries (A) are not subject to any cease-and-desist or other similar order or enforcement action issued by, (B) are not a party to any written agreement, consent agreement or memorandum of understanding with, (C) are not a party to any commitment letter or similar undertaking to, and (D) are not subject to any capital directive by, and since December 31, 2019, neither the Company nor any of the Company Subsidiaries has adopted any board resolutions at the request of any Governmental Entity that currently restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its liquidity and funding policies and practices, its ability to pay dividends, its credit, risk management or compliance policies, its internal controls, its management or its operations or business, nor has the Company nor any of the Company Subsidiaries been advised since December 31, 2019 by any Governmental Entity that it is considering issuing, initiating, ordering, or requesting any of the same.

14

(s)          Insurance.  The Company and each of the Company Subsidiaries are presently insured, and have been insured for at least the past two years, for reasonable amounts with financially sound and reputable insurance companies against such risks as companies engaged in a similar business would, in accordance with good business practice, customarily be insured.  All of the policies, bonds and other arrangements providing for the foregoing (the “Company Insurance Policies”) are in full force and effect, the premiums due and payable thereon have been or will be timely paid through the Closing Date, and there is no material breach or default (and no condition exists or event has occurred that, with the giving of notice or lapse of time or both, would constitute such a material breach or default) by the Company or any of the Company Subsidiaries under any of the Company Insurance Policies or, to the Knowledge of the Company, by any other party to the Company Insurance Policies.  Neither the Company nor any of the Company Subsidiaries has received any written notice of cancellation or non-renewal of any Company Insurance Policy nor, to the Knowledge of the Company, is the termination of any such policies threatened in writing by the insurer, and there is no material claim for coverage by the Company, or any of the Company Subsidiaries, pending under any of such Company Insurance Policies as to which coverage has been denied or disputed by the underwriters of such Company Insurance Policies or in respect of which such underwriters have reserved their rights.

(t)          Title.  The Company and the Company Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and valid title to all material personal property owned by them, in each case free and clear of all Liens, except for Liens which do not materially affect the value of such property or do not interfere with the use made and proposed to be made of such property by the Company or any Company Subsidiary.  Any real property and facilities held under lease by the Company or the Company Subsidiaries are leased pursuant to valid, subsisting and enforceable leases with such exceptions that are not material and do not interfere with the use made and proposed to be made of such property and facilities by the Company or the Company Subsidiaries.

(u)         Intellectual Property.  The Company and the Company Subsidiaries own or possess adequate rights or licenses to use all trademarks, service marks and all applications and registrations therefor, trade names, patents, patent rights, copyrights, original works of authorship, inventions, trade secrets and other intellectual property rights (collectively, “Intellectual Property Rights”) used in their businesses as conducted on the date of this Agreement, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  To the Knowledge of the Company, no product or service of the Company or the Company Subsidiaries infringes the Intellectual Property Rights of others.

(v)          Employee Benefits.

(i)         Section 2.2(v) of the Disclosure Schedule sets forth a correct and complete list of each “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including, without limitation, multiemployer plans within the meaning of Section 3(37) of ERISA), and all stock purchase, stock option, severance, employment, change-in-control, fringe benefit, bonus, incentive, deferred compensation and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transactions contemplated by this Agreement or otherwise), whether formal or informal, oral or written, under which (A) any current or former employee or director of the Company or any of the Company Subsidiaries (the “Company Employees”) has any present or future right to benefits and which are contributed to, sponsored by or maintained by the Company or any of the Company Subsidiaries or (B) the Company or any Company Subsidiary has had or has any present or future liability. All such plans, agreements, programs, policies and arrangements are collectively referred herein to as the “Benefit

        Plans.”

15

(ii)       (A) Each Benefit Plan has been established and administered in all material respects in accordance with its terms, and in compliance with the applicable provisions of ERISA, the Code and other Laws; (B) no “reportable event” (as such term is defined in Section 4043 of ERISA) that could reasonably be expected to result in material liability has occurred with respect to any Benefit Plan, and (C) no non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) has been engaged in by the Company or any Company Subsidiary with respect to any Benefit Plan that has or is expected to result in any material liability or “accumulated funding deficiency” (as such term is defined in Section 302 of ERISA and Section 412 of the Code (whether or not waived)).

(iii)        The Company and the Company Subsidiaries will be in compliance, as of the Closing Date, with Sections 111 and 302 of the Emergency Economic Stabilization Act of 2008, as amended by the U.S. American Recovery and Reinvestment Act of 2009, including all guidance issued thereunder by a Governmental Entity (collectively “EESA”).

(iv)      None of the Company or any Company Subsidiary or any trade or business, whether or not incorporated (an “ERISA Affiliate”), all of which together with the Company or any Company Subsidiary would be deemed a “single employer” within the meaning of Section 4001 of ERISA, has, at any time during the last six years, contributed to or been obligated to contribute to any plan that is (i) subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code or (ii) a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA (a “Multiemployer Plan”) or a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA; and none of Company and the Company Subsidiaries nor any of their respective ERISA Affiliates has incurred any liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as those terms are defined in Part I of Subtitle E of Title IV of ERISA.

(v)         Neither the Company nor any Company Subsidiary has any material unfunded liabilities existing under or in connection with any Benefit Plan, and each such Benefit Plan has been established and administered in all respects in accordance with its terms, and in compliance with applicable law, except where failure to be in compliance would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.

(vi)       Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby could (either alone or in conjunction with any other event) reasonably be expected to result in, cause the accelerated vesting, funding or delivery of, or increase the amount or value of, any payment or benefit to any employee, officer or director of the Company or any Company Subsidiary.

16

(w)        Taxes.  All material Tax Returns required to be filed by, or on behalf of, the Company or the Company Subsidiaries have been timely filed, or will be timely filed, in accordance with all Laws, and all such Tax Returns are, or will be at the time of filing, complete and correct in all material respects.  The Company and the Company Subsidiaries have timely paid all material Taxes due and payable (whether or not shown on such Tax Returns), or, where payment is not yet due, have made adequate financial statement provisions therefor in accordance with GAAP.  There are no Liens with respect to Taxes upon any of the assets or properties of either the Company or the Company Subsidiaries other than with respect to Taxes not yet due and payable.  As of the date of this Agreement, there are not pending or threatened in writing, any audits, examinations, investigations or other proceedings initiated by the Internal Revenue Service in respect of U.S. federal income tax matters.  None of the Company or any of the Company Subsidiaries has been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the date hereof that was purported or intended to be governed by Section 355 of the Code (or any similar provision of state, local or foreign Law).  The Company and each Company Subsidiary is, and has been since the date of its formation, a corporation for U.S. federal income tax purposes, and neither the Company nor any Company Subsidiary has elected pursuant to the Code to be treated as a Subchapter S corporation pursuant to Section 1362(a) of the Code, nor has it made any other elections pursuant to the Code (other than elections that relate solely to methods of accounting, depreciation or amortization) that would have, or be reasonably expected to result in, individually or in the aggregate, a Material Adverse Effect.

(x)          Labor.

(i)        Employees of the Company and the Company Subsidiaries are not represented by any labor union nor are any collective bargaining agreements otherwise in effect with respect to such employees.  No labor organization or group of employees of the Company or any Company Subsidiary has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions presently pending or threatened to be brought or filed with the National Labor Relations Board or any other labor relations tribunal or authority, nor have there been in the last three years.  There are no strikes, work stoppages, slowdowns, labor picketing lockouts, material arbitrations or material grievances, or other material labor disputes pending or, to the Knowledge of the Company, threatened against or involving the Company or any Company Subsidiary, nor have there been any in the past year.

(ii)         Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company and the Company Subsidiaries are in compliance with all federal and state Laws and requirements respecting employment and employment practices, terms and conditions of employment, collective bargaining, disability, immigration, health and safety, wages, hours and benefits, non-discrimination in employment, workers’ compensation and the collection and payment of withholding and/or payroll taxes and similar taxes.

(iii)      There is no charge or complaint pending or threatened before any Governmental Entity alleging unlawful discrimination in employment practices, unfair labor practices or other unlawful employment practices by the Company or any Company Subsidiary.

17

(iv)        To the Knowledge of the Company, since December 31, 2017, (i) no allegations of sexual harassment or misconduct have been made against (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000, and (ii) neither the Company nor any of the Company Subsidiaries has entered into any settlement agreements related to allegations of sexual harassment or misconduct by (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000.

(y)         Brokers and Finders.  Except as Previously Disclosed, neither the Company nor any of its officers, directors, employees or agents has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Company in connection with this Agreement or the transactions contemplated hereby, the fees of which would be payable by the Investor.

(z)          Offering of Securities.

(i)         Neither the Company nor any Person acting on its behalf has taken any action (including any offering of any securities of the Company under circumstances which would require the integration of such offering with the offering of any of the Shares to be issued pursuant to this Agreement under the Securities Act and the rules and regulations of the SEC promulgated thereunder) which would subject the offering, issuance or sale of any of the Shares to be issued pursuant to this Agreement to be subject to the registration requirements of the Securities Act.

(ii)        The Company is not disqualified from relying on Rule 506 of Regulation D (“Rule 506”) under the Securities Act for any of the reasons stated in Rule 506(d) (each such reason, a “Disqualification Event”) in connection with the issuance and sale of the Shares to the Investor.  The Company has furnished the Investor, a reasonable time prior to the date hereof, a description in writing of any matters that would have triggered disqualification under Rule 506(d) but which occurred before September 23, 2013, in each case, in compliance with the disclosure requirements of Rule 506(e).

(aa)     Affiliate Transactions.  No officer, director, five percent (5%) stockholder or other Affiliate of the Company (or any Company Subsidiary), or any individual who, to the Knowledge of the Company, is related by marriage or adoption to or shares the same home as any such Person, or any entity which, to the Knowledge of the Company, is controlled by any such Person (collectively, an “Insider”), is a party to any contract or transaction with the Company (or any Company Subsidiary) which pertains to the business of the Company (or any Company Subsidiary) or has any interest in any property, real or personal or mixed, tangible or intangible, used in or pertaining to the business of the Company or any Company Subsidiary.  The foregoing representation and warranty does not include deposit accounts of an Insider at the Company or any Company Subsidiary or loans of $250,000 or less made in the ordinary course of business to Insiders in compliance with Regulation O and other applicable Law.

18

(bb)       Private Placement.  Assuming the accuracy of the Investor’s representations and warranties set forth in Section 2.3 of this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investor.  Assuming the Stockholder Approval is obtained (if required), the issuance and sale of the Shares hereunder does not contravene the rules and regulations of the Nasdaq Stock Market.

(cc)        Listing and Maintenance Requirements.  The Company’s Voting Common Stock is (and at the Closing, the Class A Common Stock will be) registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to terminate the registration of the Voting Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received written notice from the Nasdaq Stock Market to the effect that the Company is not in compliance with the listing or maintenance requirements of the Nasdaq Stock Market.

(dd)       Investment Company.  Neither the Company nor any of the Company Subsidiaries is required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

(ee)        Acknowledgment Regarding the Investor’s Purchase of Shares.  The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby.  The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions and any advice given by the Investor or any of its representatives or agents in connection with this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions is merely incidental to Investor’s purchase of the Shares.

(ff)        No General Solicitation or General Advertising.  Neither the Company nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Shares.

(gg)        Shell Company Status.  The Company is not, and has never been, an issuer identified in Rule 144(i)(1) under the Securities Act.

(hh)       Valid Issuance of Shares.  The Shares sold and delivered in accordance with the terms hereof for the consideration expressed herein will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws.  Assuming the accuracy of the representations and warranties of the Investor set forth in Section 2.3, the Shares will be issued in compliance with all applicable federal and state securities laws.

2.3       Representations

        and Warranties of the Investor.   Except as Previously Disclosed, each Investor on behalf of itself only hereby represents and warrants to the Company, as of the date hereof and as of the Closing Date \(except for the representations
    and warranties that are as of a specific date which are made as of that date\) that:

19

(a)         Organization and Authority.  The Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and where failure to be so qualified would be reasonably expected to materially and adversely impair or delay its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

(b)          Authorization; No Conflicts.

(i)          The Trustee has the legal capacity and necessary power and authority to execute and deliver this Agreement and to perform the obligations hereunder on behalf of the Investor.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by its board of directors, general partner or managing members, investment committee, investment adviser or other authorized person, as the case may be, and no further approval or authorization by any of its stockholders, partners or other equity owners, as the case may be, is required.  This Agreement has been duly and validly executed and delivered by the Investor and, assuming due authorization, execution and delivery by the Company is the valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

(ii)        Neither the execution, delivery and performance by the Investor of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by the Investor with any of the provisions hereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any Liens upon any of the properties or assets of the Investor under any of the terms, conditions or provisions of (1) its trust instrument, deed, agreement, declaration, or similar governing documents or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Investor is a party or by which the Investor may be bound, or to which the Investor or any of the properties or assets of the Investor may be subject, or (B) violate any Law applicable to the Investor or any of its properties or assets, except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to materially adversely affect the Investor’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

(c)         Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of this Agreement or for the purchase by the Investor of the Shares pursuant to this Agreement.

20

(d)         Purchase for Investment; Accredited Investor Status; Pre-Existing Relationship.  The Investor acknowledges that the Shares to be purchased by the Investor pursuant to this Agreement have not been registered under the Securities Act or under any state securities laws and may not be resold or transferred by the Investor without such registration or appropriate reliance on any available exemption from such requirements.  The Investor (i) is acquiring the Shares pursuant to an exemption from the registration requirements of the Securities Act and other applicable securities laws solely for investment with no present intention to distribute any of the Shares to any Person, (ii) will not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, (iii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Shares and of making an informed investment decision and (iv) is an “accredited investor” (as that term is defined by Rule 501 under the Securities Act), (vi) is aware that the Company has entered into the Merger Agreement pursuant to which it is required to file with the SEC a Registration Statement on Form S-4 (the “Registration Statement”), and (vi) began discussions regarding the potential for the Investment by this Agreement with representatives of the Company before the Registration Statement was filed with the SEC and Investor’s purchase of the Shares was not solicited by the Registration or any other filing made by the Company with the SEC.

(e)          Brokers and Finders.  Neither the Investor, nor its Affiliates nor any of their respective officers or directors, has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Investor in connection with this Agreement or the transactions contemplated hereby.

(f)          Access to Information.  The Investor acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and the Company Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the Investment; and (iv) the opportunity to ask questions of management of the Company.

(g)        No Reliance.  The Investor has not relied on any representation or warranty made by any Person by or on behalf of the Company, including, without limitation, the Placement Agents, in connection with the Investment other than those contained in this Agreement.

(h)        Placement Agents.  The Investor acknowledges that the Placement Agents have not performed any due diligence review on behalf of the Investor.  Furthermore, the Investor will purchase the Shares directly from the Company and not from the Placement Agents and understands that neither the Placement Agents nor any other broker or dealer has any obligation to make a market in the Common Stock.

21

(i)          Accuracy of Representations.  The Investor understands that each of the Placement Agents and the Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements in connection with the transactions contemplated by this Agreement and agrees that if any of the representations or acknowledgements made by it are no longer accurate as of the Closing Date, or if any of the agreements made by it are breached on or prior to the Closing Date, it shall promptly notify the Placement Agents and the Company.

ARTICLE 3.

COVENANTS

3.1         Conduct

        of Business Prior to Closing.  Except as otherwise expressly required or contemplated by this Agreement or applicable Law, or with the prior written consent of the Trustee, between the date of this Agreement and the Closing, the
    Company shall, and the Company shall cause each Company Subsidiary to:

(a)          use commercially reasonable efforts to conduct its business only in the ordinary course of business consistent with past practice; and

(b)         use commercially reasonable efforts to (i) preserve the present business operations, organization (including officers and employees) and goodwill of the Company and any Company Subsidiary and (ii) preserve business relationships with customers, suppliers, consultants and others having business dealings with the Company; provided, however, that nothing in this clause (b) shall place any limit on the ability of the Board of Directors to act in accordance with, or require any actions that the Board of Directors may, in good faith, determine to be inconsistent with, its duties or the Company’s obligations under applicable Law or imposed by any Governmental Entity.

3.2         Use of Proceeds.  The proceeds received by the Company from the sale of the Shares contemplated hereunder (net of any applicable costs and expenses) will be used for general corporate purposes and will not use such proceeds to repurchase, redeem or otherwise monetize any interests held by other existing shareholders of the Company or any Company Subsidiary.

3.3         Regulatory Filings.  The Company shall make all filings pursuant to any applicable state securities laws and Regulation D of the Securities Act that are required to be made in connection with the Closing.

3.4        Confidentiality.

    Each Investor acknowledges that the information being provided to it in connection with the transactions contemplated hereby includes confidential information that has not been publicly disclosed and agrees to maintain the confidentiality of the
    information with the same degree of care that it uses to protect its own confidential information.

22

3.5          Publicity.

    The Company shall not publicly disclose the financial or other terms of the transactions contemplated hereby or the name of any Investor or any Affiliate or investment adviser of any Investor, or include the name of any Investor or any Affiliate or
    investment adviser of any Investor in any press release or filing with the SEC or the Nasdaq Stock Market and shall not use any names, trademarks, service marks or trade names of the Investor or its Affiliates in any form of advertising and
    publicity or public statements, without the prior written consent of such Investor, except \(i\) as required by federal securities law in connection with the filing of final transaction documents with the SEC or \(ii\) to the extent such disclosure is
    required by applicable law, at the request of the staff of the SEC or at the request of the Nasdaq Stock Market regulations, in which case the Company shall provide each such Investor with prior written notice of such disclosure and the form of
    such disclosure shall be subject to the approval of such Investor, such approval not to be unreasonably withheld or delayed.

3.6         Commercially

        Reasonable Efforts.  Upon the terms and subject to the conditions herein provided, except as otherwise provided in this Agreement, each of the Parties hereto agrees to use its commercially reasonable efforts to take or cause to be
    taken all action, to do or cause to be done and to assist and cooperate with the other Party in doing all things necessary, proper or advisable under applicable Laws to consummate and make effective the transactions contemplated hereby, including
    but not limited to: \(a\) the satisfaction of the conditions precedent to the obligations of the Parties; \(b\) the obtaining of applicable Governmental Consents, and consents, waivers and approvals of any other third parties; \(c\) defending of any
    claim, action, suit, investigation or proceeding, whether judicial or administrative, challenging this Agreement or the performance of the obligations hereunder; and \(d\) the execution and delivery of such instruments, and the taking of such other
    actions as the other Party may reasonably request in order to carry out the intent of this Agreement.  Notwithstanding the foregoing, under no circumstances will the Investor be required to disclose to the Company, the Company Subsidiaries or any
    third party any information the disclosure of which is prohibited by Law, nor shall it be required to agree to any restrictions, conditions or commitments imposed or otherwise required by any Government Entity that are determined by the Investor in
    its sole discretion to be unduly burdensome, other than customary passivity commitments, in order to consummate and make effective the transactions contemplated hereby.

3.7          Legend.

(a)       Each Investor agrees that all certificates or other instruments representing the Shares subject to this Agreement shall bear legends substantially to the following effect, until such time as they are not required under Section 3.7(b)

“THE SHARES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.”

23

(b)          Upon request of an Investor, the Company shall promptly cause such legends to be removed from any certificate for any Shares held by such Investor to be so transferred if such Shares are being transferred pursuant to an exemption from the registration securities requirements of the Securities Act and applicable state Laws, subject to receipt by the Company of an opinion of counsel for the Investor reasonably satisfactory to the Company to the effect that such legend is no longer required under the Securities Act and applicable state Laws.  Each Investor acknowledges that the sale of the Shares provided for herein has not been registered under the Securities Act or under any state securities Laws and agrees that it shall not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities Laws.

3.8        Exchange

        Listing.  The Company shall use its reasonable best efforts to cause the Shares to be approved for listing on the Nasdaq Stock Market as promptly as possible.

3.9         Authorized

        Shares.  The Company will at all times reserve, free of any preemptive or similar rights of stockholders of the Company, a number of unissued shares of Class A Common Stock, sufficient to convert automatically, in accordance with the
    terms of the certificate of incorporation of the Company, all of the shares of Class C Common Stock then outstanding.

3.10      Rule

        144 Reporting.  With a view to making available to the Investor the benefits of certain rules and regulations of the SEC which may permit the sale of the Shares by the Investor without registration under the Securities Act upon
    compliance with the initial holding period and other applicable requirements of Rule 144 under the Securities Act, the Company agrees to use its reasonable best efforts to:

(i)         make and keep adequate current public information with respect to the Company available, as those terms are understood and defined in Rule 144(c)(1) or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of this Agreement;

(ii)        so long as an Investor owns any of the Shares, furnish to such Investor forthwith upon request: (A) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 under the Securities Act, and of the Exchange Act; (B) a copy of the most recent annual or quarterly report of the Company; and (C) such other reports and documents as the Investor may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any of the Shares without registration; and

(iii)       to take such further action as the Trustee may reasonably request, all to the extent required from time to time to enable any Investor to sell Shares without registration under the Securities Act.

ARTICLE 4.

TERMINATION

4.1         Termination.

    This Agreement may be terminated prior to the Closing:

(a)          by mutual written agreement of the Company and the Trustee;

24

(b)        by the Company or the Trustee, upon written notice to the other Party in the event that the Closing does not occur on or before September 1, 2021; provided, however, that the right to terminate this Agreement pursuant to this Section 4.1(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;

(c)        by the Company or the Trustee, upon written notice to the other Party, in the event that (i) Stockholder Approval is required under applicable Law or the rules and regulations of the Nasdaq Stock Market, but has not been obtained on or prior to the closing date of the Merger or (ii) the Authorized Shares Increase Approval has not been obtained on or prior to the closing date of the Merger;

(d)        by the Trustee, upon written notice to the Company, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Company in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(ii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in the absence of such breach or condition; provided that this Section 4.1(d) shall only apply if none of the Investors are in material breach of any of the terms of this Agreement;

(e)         by the Company, upon written notice to the Trustee, if (i) there has been a breach of any representation, warranty, covenant or agreement made by an Investor in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(iii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in absence of such breach or condition; provided that this Section 4.1(e) shall only apply if the Company is not in material breach of any of the terms of this Agreement; or

(f)         by any Party, upon written notice to the other Party, in the event that any Governmental Entity shall have issued any order, decree or injunction or taken any other action restraining, enjoining or prohibiting any of the transactions contemplated by this Agreement, and such order, decree, injunction or other action shall have become final and non-appealable.

4.2       Effects

        of Termination.  In the event of any termination of this Agreement as provided in Section 4.1, this Agreement \(other than Section 3.4, this Article 4 and Article 6 of this Agreement, which shall remain in full force and effect\) shall
    forthwith become wholly void and of no further force and effect; provided, that nothing herein shall relieve any Party from liability for fraud or willful breach of this Agreement.

25

ARTICLE 5.

INDEMNITY

5.1         Indemnification

        by the Company.

(a)        After the Closing, and subject to Sections 5.1(b), 5.3 and 5.4, the Company shall indemnify, defend and hold harmless to the fullest extent permitted by Law each Investor and its Affiliates, and their respective successors and assigns, officers, directors, partners, members and employees, as applicable, (the “Investor Indemnified Parties”) against and from, and reimburse any of the Investor Indemnified Parties for, all Losses that any of the Investor Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Company in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by the Company to perform any of its covenants or agreements contained in this Agreement.  Notwithstanding anything herein to the contrary, the obligations of the Company under this Section 5.1(a) shall not be applicable to or inure to the benefit of any transferee of the Common Stock sold pursuant to this Agreement who is not an Affiliate of an Investor.

(b)         Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless any of the Investor Indemnified Parties against, or reimburse any of the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) (other than Losses arising out of the inaccuracy or breach of any Company Specified Representations) until the aggregate amount of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a) exceeds $100,000 (the “Threshold Amount”), upon the occurrence of which the Company shall be obligated for all of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a).  Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless the Investor Indemnified Parties against, or reimburse the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1.

(c)         For purposes of Section 5.1(a), in determining whether there has been a breach of a representation or warranty, the Parties hereto shall ignore any “materiality,” “Material Adverse Effect” or similar qualifications.

5.2          Indemnification

        by the Investor.

(a)          After the Closing, and subject to Sections 5.2(b), 5.3 and 5.4, each Investor shall severally, and not jointly, indemnify, defend and hold harmless to the fullest extent permitted by Law the Company and its respective Affiliates and their respective successors and assigns, officers, directors, partners, members, employees, representatives and agents (collectively, the “Company Indemnified Parties”) against and from, and reimburse any of the Company Indemnified Parties for, all Losses that the Company Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by such Investor in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by such Investor to perform any of its covenants or agreements contained in this Agreement.

26

(b)         Notwithstanding anything to the contrary contained herein, the Investors shall not be required to indemnify, defend or hold harmless any of the Company Indemnified Parties against, or reimburse any of the Company Indemnified Parties for any Losses pursuant to Section 5.2(a)(1) until the aggregate amount of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a) exceeds the Threshold Amount, upon the occurrence of which the applicable Investors shall be obligated for all of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a)(1).  Notwithstanding anything to the contrary contained herein, the Investors shall not be required to indemnify, defend or hold harmless the Company Indemnified Parties against, or reimburse the Company Indemnified Parties for, any Losses pursuant to Section 5.2(a)(1) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investors to the Company pursuant to Section 1.1 hereof.

(c)          For purposes of Section 5.2(a), in determining whether there has been a breach of a representation or warranty, the Parties shall ignore any “materiality” or similar qualifications.

5.3          Notification

        of Claims.

(a)         Any Person that may be entitled to be indemnified under this Article 5 (the “Indemnified Party”) shall promptly notify the party or parties liable for such indemnification (the “Indemnifying Party”) in writing of any claim in respect of which indemnity may be sought hereunder, including any pending or threatened claim or demand by a third party that the Indemnified Party has determined has given or could reasonably give rise to a right of indemnification under this Agreement (including a pending or threatened claim or demand asserted by a third party against the Indemnified Party) (each, a “Third Party Claim”), describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or demand; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Agreement except to the extent that the Indemnifying Party is materially prejudiced by such failure.  The Parties agree that notices for claims in respect of a breach of a representation, warranty, covenant or agreement must be delivered prior to the expiration of any applicable survival period specified in Section 6.1 for such representation, warranty, covenant or agreement; provided, that if, prior to such applicable date, a Party hereto shall have notified the other Party hereto in accordance with the requirements of this Section 5.3(a) of a claim for indemnification under this Agreement (whether or not formal legal action shall have been commenced based upon such claim), such claim shall continue to be subject to indemnification in accordance with this Agreement notwithstanding the passing of such applicable date.

27

(b)        Upon receipt of a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) in respect of a Third Party Claim, the Indemnifying Party may, by notice to the Indemnified Party delivered within twenty (20) Business Days of the receipt of notice of such Third Party Claim, assume the defense and control of any Third Party Claim, with its own counsel reasonably acceptable to the Indemnified Party and at its own expense.  The Indemnified Party shall have the right to employ counsel on its own behalf for, and otherwise participate in the defense of, any such Third Party Claim, but the fees and expenses of its counsel will be at its own expense unless (A) the employment of counsel by the Indemnified Party at the Indemnifying Party’s expense has been authorized in writing by the Indemnifying Party, (B) the Indemnified Party reasonably believes there may be a conflict of interest between the Indemnified Party and the Indemnifying Party in the conduct of the defense of such Third Party Claim, (C) the Indemnified Party reasonably believes there are legal defenses available to it that are different from, additional to or inconsistent with those available to the Indemnifying Party, or (D) the Indemnifying Party has not in fact employed counsel to assume the defense of such Third Party Claim within a reasonable time after receipt of notice of the commencement of such Third Party Claim, in each of which cases the fees and expenses of such Indemnified Party’s counsel shall be at the expense of the Indemnifying Party; provided, however, that in the event that the Company is required to assume the fees and expenses of such Investor Indemnified Party’s counsel in accordance with the foregoing and such Investor Indemnified Party is similarly situated with any other “Investor Indemnified Party” under any of the other stock purchase agreements with respect to any Third Party Claim, and does not have any conflict of interest with such Person in the conduct of the defense of such Third Party Claim or have legal defenses available to it that are different from, additional to or inconsistent with those available to such Person, such Investor Indemnified Party shall be required to employ the same counsel as such Person and the Company shall be responsible for the fees and expenses of only one such counsel for such Investor Indemnified Party and such other Person or Persons (assuming any of clauses (A) through (D) above is satisfied).  The Indemnified Party may take any actions reasonably necessary to defend such Third Party Claim prior to the time that it receives a notice from the Indemnifying Party as contemplated by the immediately preceding sentence.  The Indemnified Party shall, and shall cause each of its Affiliates and representatives to, use reasonable best efforts to cooperate with the Indemnifying Party in the defense of any Third Party Claim.  The Indemnifying Party shall not, without the prior written consent of the Indemnified Party (which shall not be unreasonably withheld or delayed), consent to a settlement, compromise or discharge of, or the entry of any judgment arising from, any Third Party Claim, unless such settlement, compromise, discharge or entry of any judgment does not involve any statement, finding or admission of any fault, culpability, failure to act, violation of Law or admission of any wrongdoing by or on behalf of the Indemnified Party, and the Indemnifying Party shall (i) pay or cause to be paid all amounts arising out of such settlement or judgment concurrently with the effectiveness of such settlement or judgment (unless otherwise provided in such judgment), (ii) not encumber any of the assets of any Indemnified Party or agree to any restriction or condition that would apply to or materially adversely affect any Indemnified Party or the conduct of any Indemnified Party’s business and (iii) obtain, as a condition of any settlement, compromise, discharge, entry of judgment (if applicable), or other resolution, a complete and unconditional release of each Indemnified Party in form and substance reasonably satisfactory to such Indemnified Party from any and all liabilities in respect of such Third Party Claim.  An Indemnified Party shall not settle, compromise or consent to the entry of any judgment with respect to any claim or demand for which it is seeking indemnification from the Indemnifying Party or admit to any liability with respect to such claim or demand without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed); provided, that such consent shall not be required if the Indemnifying Party has not fulfilled any material obligations under this Section 5.3(b).

(c)         In the event any Indemnifying Party receives a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) that does not involve a Third Party Claim, the Indemnifying Party shall notify the Indemnified Party within twenty (20) Business Days following its receipt of such notice whether the Indemnifying Party disputes its liability to the Indemnified Party under this Agreement.  The Indemnified Party shall reasonably cooperate with and assist the Indemnifying Party in determining the validity of any such claim for indemnity by the Indemnified Party.

28

5.4        Indemnification

        Payment.  In the event a claim or any Action for indemnification hereunder has been finally determined, the amount of such final determination shall be paid by the Indemnifying Party to the Indemnified Party on demand in immediately
    available funds.  A claim or an Action, and the liability for and amount of damages therefor, shall be deemed to be “finally determined” for purposes of this Agreement when the Parties have so determined by mutual agreement or, if disputed,
    when a final non-appealable judicial order has been entered into with respect to such claim or Action.

5.5        Exclusive

        Remedies.  Each Party acknowledges and agrees that following the Closing, the indemnification provisions hereunder shall be the sole and exclusive remedies of the Parties for any breach of the representations, warranties or covenants
    contained in this Agreement.  No investigation of the Company by the Investor, or of the Investor by the Company, whether prior to or after the date of this Agreement, shall limit any Indemnified Party’s exercise of any right hereunder or be deemed
    to be a waiver of any such right.  The Parties agree that any indemnification payment made pursuant to this Agreement shall be treated as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

ARTICLE 6.

MISCELLANEOUS

6.1         Survival.

    The representations and warranties of the Parties contained in this Agreement shall survive in full force and effect until the date that is fifteen \(15\) months after the Closing Date \(or until final resolution of any claim or action arising from
    the breach of any such representation and warranty, if notice of such breach was provided prior to the end of such period\), at which time they shall terminate and no claims shall be made for indemnification under Section 5.1 or Section 5.2, as
    applicable, for breaches of representations or warranties thereafter, except the Company Specified Representations \(other than the representations and warranties made in Section 2.2\(v\), which shall survive until the expiration of the applicable
    statute of limitations\) and the Investor Specified Representations shall survive the Closing indefinitely.  The covenants and agreements set forth in this Agreement shall survive until the expiration of any applicable statute of limitations or
    until performed or no longer operative in accordance with their respective terms.  Notwithstanding the foregoing, the Company Specified Representations shall survive for the period of the applicable statute of limitations.

6.2        Other

        Definitions.  Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa, and references to any
    agreement, document or instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time.  In addition, the following terms shall have the meanings assigned to them below:

29

(a)        the term “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person provided that no security holder of the Company shall be deemed to be an Affiliate of any other security holder or of the Company or any of the Company Subsidiaries solely by reason of any investment in the Company and, for purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under 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 or policies of such Person, whether through the ownership of voting securities, by contract or otherwise;

(b)       the term “Agency” means the Federal Housing Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home Administration (now known as Rural Housing and Community Development Services), the Federal National Mortgage Association, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture or any other federal or state agency with authority to (i) determine any investment, origination, lending or servicing requirements with regard to mortgage loans originated, purchased or serviced by the Company or (ii) originate, purchase, or service mortgage loans, or otherwise promote mortgage lending, including state and local housing finance authorities;

(c)          the term “Board of Directors” means the Board of Directors of the Company;

(d)         the term “Business Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York or in the State of California generally are authorized or required by Law or other governmental actions to close;

(e)          the term “Capital Stock” means the capital stock or other applicable type of equity interest in a Person;

(f)          the term “Code” means the Internal Revenue Code of 1986, as amended;

(g)       the term “Company Specified Representations” means the representations and warranties made in Section 2.2(a), Section 2.2(b), Section 2.2(c), Section 2.2(d), Section 2.2(x), Section 2.2(z) and Section 2.2(hh);

(h)        the term “Disclosure Schedule” shall mean a schedule delivered, on or prior to the date of this Agreement, by (i) the Investor to the Company and (ii) the Company to the Investor setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in Section 2.2 with respect to the Company, or in Section 2.3 with respect to the Investor, or to one or more covenants contained in Article 3;

(i)           the term “GAAP” means United States generally accepted accounting principles and practices as in effect from time to time;

30

(j)          the term “Governmental Consent” means any notice to, registration, qualification, designation, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Entity, or the expiration or termination of any statutory waiting periods;

(k)     the term “Governmental Entity” means any court, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign, and any applicable industry self-regulatory organization or securities exchange;

(l)           the term “Insurer” means a Person who insures or guarantees for the benefit of the mortgagee all or any portion of the risk of loss upon borrower default on any of the mortgage loans originated, purchased or serviced by the Bank, including the Federal Housing Administration, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any private mortgage insurer, and providers of hazard, title or other insurance with respect to such mortgage loans or the related collateral;

(m)        the term “Investor Specified Representations” means the representations and warranties made in Section 2.3(b)(i), Section 2.3(d) and Section 2.3(f);

(n)         the term “Knowledge” of the Company and words of similar import mean the knowledge of any directors or executive officers of the Company listed on the Disclosure Schedule hereto;

(o)       the term “Loan Investor” means any Person (including an Agency) having a beneficial interest in any mortgage loan originated, purchased or serviced by the Bank or a security backed by or representing an interest in any such mortgage loan;

(p)        the term “Losses” means any and all losses, damages, reasonable costs, reasonable expenses (including reasonable attorneys’ fees and disbursements), liabilities, settlement payments, awards, judgments, fines, obligations, claims, and deficiencies of any kind, excluding special, consequential, exemplary and punitive damages;

(q)         the term “Person” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, Governmental Entity or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity;

(r)          the term “Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company or other entity (x) of which such Person or a Subsidiary of such Person is a general partner or (y) of which a majority of the voting securities or other voting interests, or 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;

31

(s)         the term “Tax” or “Taxes” means all United States federal, state, local or foreign income, profits, estimated, gross receipts, windfall profits, severance, property, intangible property, occupation, production, sales, use, license, excise, emergency excise, franchise, capital gains, capital stock, employment, withholding, transfer, stamp, payroll, goods and services, value added, alternative or add-on minimum tax, or any other tax, custom, duty or governmental fee, or other like assessment or charge of any kind whatsoever, together with any interest, penalties, fines, related liabilities or additions to tax that may become payable in respect thereof imposed by any Governmental Entity, whether or not disputed;

(t)        the term “Tax Return” means any return, declaration, report or similar statement required to be filed with respect to any Taxes (including any attached schedules), including, without limitation, any information return, claim or refund, amended return and declaration of estimated Tax;

(u)         the term “Voting Securities” means at any time shares of any class of Capital Stock of the Company, including but not limited to Voting Common Stock (or, after giving effect to the Merger Transactions, Class A Common Stock), and Voting Debt that are then entitled to vote generally in the election of directors;

(v)          the word “or” is not exclusive;

(w)         the words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”;

(x)        the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision; and

(y)       all article, section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit and schedule references not attributed to a particular document shall be references to such exhibits and schedules to this Agreement.

6.3         Amendment

        and Waivers.  The conditions to each Party’s obligation to consummate the Closing are for the sole benefit of such Party and may be waived by such Party in whole or in part to the extent permitted by Law.  No amendment or waiver of
    any provision of this Agreement will be effective against any Party unless it is in a writing signed by a duly authorized officer of such Party.

6.4      Counterparts

        and Facsimile.  For the convenience of the Parties, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together
    constitute the same agreement.  Executed signature pages to this Agreement may be delivered by facsimile and such facsimiles shall be deemed as sufficient as if manually signed signature pages had been delivered.

6.5         Governing

        Law.  This Agreement will be governed by and construed in accordance with the Laws of the State of California applicable to contracts made and to be performed entirely within such State.

32

6.6      WAIVER

        OF JURY TRIAL.  TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, INVESTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS AGREEMENT, THE
    TRANSACTIONS CONTEMPLATED HEREBY WHETHER BASED ON CONTRACT, EQUITY, TORT OR ANY OTHER THEORY.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN BY INVESTOR, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

6.7         Notices.

    Any notice, request, instruction or other document to be given hereunder by any Party to the other will be in writing and will be deemed to have been duly given \(a\) on the date of delivery if delivered personally or by telecopy or facsimile, upon
    confirmation of receipt, \(b\) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or \(c\) on the third Business Day following the date of mailing if delivered by registered or certified
    mail, return receipt requested, postage prepaid, provided that any such notice, request, instruction or other document to be given hereunder shall not be deemed to have been duly given unless and until it is sent via electronic mail to the
    recipient thereof.  All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice.

(a)          If to the Investors, to the address set forth on the Trustee’s signature page to this Agreement.

(b)          If to the Company:

Broadway Financial Corporation

5055 Wilshire Boulevard, Suite 500

Los Angeles, California 90036

Attn: Brenda Battey,

Chief Financial Officer

Email: bbattey@broadwayfederalbank.com

with a copy (which copy shall not constitute notice) to:

Arnold & Porter LLP

777 South Figueroa Street,

44th Floor

Los Angeles, California 90017

Attn: James R. Walther, Esq.

Fax: (213) 243-4199

Email: James.Walther@arnoldporter.com

6.8      Entire

        Agreement.  This Agreement constitutes the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, inducements or conditions, both written and oral, among the Parties, with respect
    to the subject matter hereof and thereof.

33

6.9         Successors

        and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns, including any purchasers of the Common Stock to be issued pursuant to this Agreement.  The
    Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Trustee.  Each Investor may assign some or all of its rights hereunder or thereunder without the consent of the Company to any
    Affiliate of such Investor, and such assignee shall be deemed to be an Investor hereunder with respect to such assigned rights and shall be bound by the terms and conditions of this Agreement that apply to such Investor.

6.10       Captions.

    The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.

6.11       Severability.

    If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such
    provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal
    substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon 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.

6.12      Third

        Party Beneficiaries.  Nothing contained in this Agreement, expressed or implied, is intended to confer upon any Person other than the Parties, any benefit right or remedies, except that the Placement Agents may rely on the
    representations and warranties contained herein to the same extent as if they were party to this Agreement and the provisions of Sections 5.1 and 5.2 shall inure to the benefit of the Persons referred to in such Sections.

6.13     Public

        Announcements.  The Investor will not make \(and will use its reasonable best efforts to ensure that its Affiliates and representatives do not make\) any news release or public disclosure with respect to this Agreement and any of the
    transactions contemplated hereby, without first consulting with the Company and, in each case, also receiving the Company’s consent \(which shall not be unreasonably withheld, conditioned or delayed\).

6.14       Specific

        Performance.  The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms.  It is accordingly agreed that the Parties
    shall be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity.

6.15       No

        Recourse to Other Persons.  This Agreement may only be enforced against the named Parties.  All claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance
    of this Agreement may be made only against the entities that are expressly identified as Parties or that are subject to the terms hereof, and no past, present or future director, officer, employee, incorporator, member, manager, partner,
    stockholder, Affiliate, agent, attorney or representative of any Party \(including any person negotiating or executing this Agreement on behalf of a Party\) shall have any liability or obligation with respect to this Agreement or with respect to any
    claim or cause of action, whether in tort, contract or otherwise, that may arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement and the transactions contemplated hereby.

[signature page follows]

34

IN WITNESS WHEREOF, the Parties 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:
Name: Wayne-Kent A. Bradshaw
--- ---
Title: President and Chief Executive Officer

[Stock Purchase Agreement]

For and on behalf of
BUTTERFIELD TRUST (BERMUDA) LIMITED, as Trustee for each of the following:
THE LORRAINE GRACE WILL TRUST
THE ANNE GRACE KELLY TRUST 99
THE GWENDOLYN GRACE TRUST 99
THE LORRAINE L. GRACE TRUST 99
THE RUTH GRACE JERVIS MILLENNIUM TRUST
By:
Name: Denice Dane
--- ---
Title: Authorized Signatory
--- ---
By:
---
Name: Kristie-Ann Rayner
--- ---
Title: Authorized Signatory
--- ---
Address for notices:
---
Butterfield Trust (Bermuda) Limited
Rosebank Centre, 11 Bermudiana Road
PE broke HM 08, Bermuda
Attn: Mrs. Catherine Smith

[Stock Purchase Agreement]

ANNEX A

Investor Shares

Trust Name Number of Shares
The Lorraine Grace Will Trust 225,000
The Anne Grace Kelly Trust 99 140,000
The Gwendolyn Grace Trust 99 115,000
The Lorraine L. Grace Trust 99 85,000
The Ruth Grace Jervis Millennium Trust 70,000

[Annex A to the Stock Purchase Agreement]

EXECUTION VERSION

Exhibit 10.31

BROADWAY FINANCIAL CORPORATION

STOCK PURCHASE AGREEMENT

February 19, 2021

TABLE OF CONTENTS

Page
ARTICLE 1. PURCHASE; CLOSING 2
1.1 Issuance, Sale and Purchase 2
1.2 Closing; Deliverables for the Closing; Conditions to the Closing 2
ARTICLE 2. REPRESENTATIONS AND WARRANTIES 5
2.1 Certain Terms 5
2.2 Representations and Warranties of the Company 6
2.3 Representations and Warranties of the Investor 20
ARTICLE 3. COVENANTS 22
3.1 Conduct of Business Prior to Closing 22
3.2 Use of Proceeds 22
3.3 Regulatory Filings 22
3.4 Confidentiality 22
3.5 Publicity 22
3.6 Commercially Reasonable Efforts 23
3.7 Legend. 23
3.8 Exchange Listing 24
3.9 Authorized Shares 24
3.10 Rule 144 Reporting 24
3.11 Exchange Rights 24
ARTICLE 4. TERMINATION 25
4.1 Termination 25
4.2 Effects of Termination 25
ARTICLE 5. INDEMNITY 26
5.1 Indemnification by the Company 26
5.2 Indemnification by the Investor 27
5.3 Notification of Claims 27
5.4 Indemnification Payment 29
5.5 Exclusive Remedies 29
ARTICLE 6. MISCELLANEOUS 29
6.1 Survival 29

i

6.2 Other Definitions 30
6.3 Amendment and Waivers 32
6.4 Counterparts and Facsimile 33
6.5 Governing Law 33
6.6 WAIVER OF JURY TRIAL 33
6.7 Notices 33
6.8 Entire Agreement 34
6.9 Successors and Assigns 34
6.10 Captions 34
6.11 Severability 34
6.12 Third Party Beneficiaries 34
6.13 Public Announcements 34
6.14 Specific Performance 35
6.15 No Recourse to Other Persons 35

INDEX OF DEFINED TERMS

Page
Action 8
Affiliate 30
Agency 30
Agreement 1
Authorized Shares Increase Approval 3
Bank 6
Bank Merger 1
Benefit Plans 15
Board of Directors 30
Business Day 30
Capital Stock 30
CDFI 6
CFB 1
CFB Sub 1
Class A Common Stock 1
Class B Common Stock 1
Class C Common Stock 1
Closing 2
Closing Date 2
Code 30

ii

Common Stock 1
Company 1
Company Employees 15
Company Financial Statements 9
Company Indemnified Parties 27
Company Insurance Policies 15
Company IT Assets 10
Company Reports 9
Company Specified Representations 30
Company Stock Plan 7
Company Subsidiaries 6
Company Subsidiary 6
Concurrent Other Transactions 1
control 30
controlled by 30
controlling 30
Disclosure Schedule 31
Disqualification Event 18
EESA 16
ERISA 15
ERISA Affiliate 16
Exchange Act 9
FDIC 6
Federal Reserve 6
GAAP 31
Governmental Authorizations 13
Governmental Consent 31
Governmental Entity 31
Indemnified Party 27
Indemnifying Party 27
Insider 18
Insurer 31
Intellectual Property Rights 15
Investment 1
Investor 1
Investor Indemnified Parties 26
Investor Specified Representations 31
Knowledge 31
Law 13
Liens 8
Loan Investor 31
Losses 31
Material Adverse Effect 5
Merger 1
Merger Agreement 1

iii

Merger Transactions 1
Multiemployer Plan 16
Non-Voting Common Stock 7
OFAC 12
Parties 1
Per Share Purchase Price 2
Person 31
Personal Information 11
Placement Agents 1
Preferred Stock 7
Previously Disclosed 5
Privacy Laws 11
Purchase Price 2
Registration Statement 21
Rule 506 18
SEC 5
Securities Act 7
Shares 2
SLHCA Act 6
Stockholder Approval 3
Subsidiary 32
Surviving Bank 1
Tax 32
Tax Return 33
Taxes 32
Third Party Claim 27
Threshold Amount 26
under common control with 30
Voting Common Stock 7
Voting Debt 7
Voting Securities 32

iv

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Agreement”) is dated as of February 19, 2021, and is entered into by and among Broadway Financial Corporation, a Delaware corporation (the “Company”),

      and Texas Capital Community Development Corporation, a national banking association \(the “Investor”, and together with the Company, the “Parties”\)

RECITALS

WHEREAS, the Company is a party to that certain Agreement and Plan of Merger (the “Merger Agreement”) with CFBanc Corporation, a District of Columbia benefit corporation (“CFB”) which provides, among other things and subject to the terms and conditions of the Merger Agreement, for (i) the merger of CFB with and into the Company, with the Company continuing as the surviving entity in the Merger (the “Merger”), (ii) immediately following the Merger, Broadway Federal Bank, f.s.b., a wholly owned subsidiary of the Company, will merge with and into City First Bank of D.C., National Association (“CFB Sub”), a wholly owned subsidiary of CFB (the “Bank Merger” and together with the Merger and the

    other transactions contemplated by the Merger Agreement, the “Merger Transactions”\), with CFB Sub continuing as the surviving entity \(the “Surviving Bank”\), and \(iii\) the Company’s voting common stock, par value $0.01 per share, will be renamed Class A Common Stock \(“Class A Common Stock”\), a new class of non-voting common stock of the Company, par value $0.01 per share, will be created which will be named Class B Common Stock \(“Class

        B Common Stock”\) and the Company’s currently authorized non-voting common stock, par value $0.01 per share, will be renamed Class C Common Stock \(the “Class C Common Stock” and
    collectively, the “Common Stock”\);

WHEREAS, the Company has engaged Raymond James & Associates, Inc. and Keefe, Bruyette & Woods, Inc. as co-placement agents (the “Placement Agents”) for the offering of the Common Stock.

WHEREAS, the Company desires to issue and sell to the Investor, and the Investor desires to purchase from the Company, on the terms and conditions described herein, shares of Class A Common Stock at the Per Share Purchase Price specified herein (the “Investment”);

WHEREAS, the Investment is proposed to be made subject to completion of the Merger Transactions;

WHEREAS, the Investment is proposed to be made concurrently with the sale by the Company of shares of Class A Common Stock and Class C Common Stock at the Per Share Purchase Price via private placement to certain other investors (the “Concurrent Other Transactions”); and

NOW, THEREFORE, in consideration of the premises, and of the respective representations, warranties, covenants and other agreements of the Parties set forth herein, the Parties hereby agree as follows:

ARTICLE 1.

PURCHASE; CLOSING

1.1        Issuance,

        Sale and Purchase. On the terms and subject to the conditions set forth herein, the Company agrees to issue and sell to the Investor, and the Investor agrees to purchase from the Company, free
    and clear of any Liens, 1,685,393 shares of Class A Common Stock \(the “Shares”\) at a per share purchase price of $1.78, or, if lower, the same price paid by any other Person who acquires shares \(or
    enters into any agreement to acquire shares\) of Class A Common Stock \(or any other Voting Stock or Non-Voting Stock or common equivalent Preferred Stock\) in any Concurrent Other Transaction \(the “Per Share
        Purchase Price”\), payable to the Company in immediately available funds at the Closing; provided, however, that the number of Shares that the Investor is required to purchase pursuant to this Section 1.1 shall be reduced, if and to
    the extent necessary to cause the percentage of the Company’s Class A Common Stock held by the Investor as of immediately following the Closing and the closing of the Concurrent Other Transactions not to exceed 4.99% of the total number of shares
    of Class A Common Stock outstanding immediately following the Closing and the closing of the Concurrent Other Transactions.  The aggregate purchase price payable pursuant to this Section 1.1 is referred to herein as the “Purchase Price”\).

1.2         Closing;

        Deliverables for the Closing; Conditions to the Closing.

(a)         Closing.  Unless this Agreement has been terminated pursuant to Article 4, and subject to the satisfaction or, to the extent permitted by Law and this Agreement, the written waiver of the conditions set forth in Section 1.2(c), the closing of the transaction contemplated by this Agreement (the “Closing”) shall take place at the offices of Arnold & Porter LLP, located at 777 South Figueroa Street, 44th Floor, Los Angeles, California 90017, or remotely via the electronic or other exchange of documents and signature pages, at 9:00 a.m. Pacific Time on the second Business Day after the satisfaction or, if permissible, waiver of the conditions set forth in Section 1.2(c) (other than those which by their nature are to be satisfied at Closing, but subject to the satisfaction or waiver of such conditions), or at such other place or such other date as may be agreed to by the Parties (the “Closing Date”).

(b)         Closing Deliverables.  Subject to the satisfaction or permitted waiver of the conditions to the Closing set forth in Section 1.2(c), at the Closing the Parties shall make the following deliveries:

(i)          the Company shall deliver to the Investor one or more certificates evidencing the Shares registered in the name of the Investor (or if the Shares are to be uncertificated, the Company shall deliver appropriate evidence of such registration of the Shares in the name of the Investor);

(ii)         the Company shall deliver to the Investor a schedule setting forth the aggregate number of shares of each class of Capital Stock outstanding immediately after giving effect to the Merger Transactions, the Concurrent Other Transactions and the transactions contemplated hereby; and

2

(iii)         the Investor shall deliver the Purchase Price by wire transfer of immediately available funds to the account specified by the Company for this purpose by notice to the Investor prior to the Closing.

(c)           Closing Conditions.

(i)          The obligations of the Investor, on the one hand, and the Company, on the other hand, to consummate the purchase and sale of the Shares provided for in this Agreement are each subject to the satisfaction or, to the extent permitted by Law and this Agreement, the waiver by the Company or the Investor, as applicable, of the following conditions to the Closing under this Agreement:

(A)      All Governmental Consents required to have been obtained at or prior to the Closing Date in connection with the execution, delivery or performance of this Agreement and the consummation of the transactions contemplated hereby shall have been obtained and shall be in full force and effect.

(B)       The Merger Transactions shall have been consummated in accordance with the Merger Agreement, including the approval of the Merger Agreement by the stockholders of each of the Company and CFB;

(C)        If required under applicable Law or the rules and regulations of the Nasdaq Stock Market, the approval by stockholders of the Company of resolutions providing for the Company’s issuance of the maximum number of shares of Common Stock to be issued under this Agreement and in the Concurrent Other Transactions in accordance with this Agreement, the definitive documentation relating to the Concurrent Other Transactions, and applicable Law and the rules and regulations of the Nasdaq Stock Market (such approval being referred to herein as the “Stockholder Approval”) shall have been obtained;

(D)       Approval by the stockholders of the Company to increase in the authorized number of shares of Voting Common Stock (which will become Class A Common Stock upon completion of the Merger) from 50,000,000 shares to 75,000,000 shares, to be effected by the filing of an amended and restated certificate of incorporation of the Company (the “Authorized Shares Increase Approval”), shall have been obtained.

(ii)         The obligation of the Investor to consummate the purchase of Shares provided for in this Agreement is also subject to the satisfaction or waiver by the Investor of the following conditions to the Closing:

(A)      (i) The Company Specified Representations shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date and (ii) the other representations and warranties of the Company set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except, in the case of this clause (ii) only, to the extent that the failure to be true and correct (without regard to any materiality or Material Adverse Effect qualifications contained therein), would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and except, in the case of clauses (i) and (ii), that representations and warranties made as of a specified date shall be true and correct as of such date;

3

(B)       The Company shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date;

(C)        The Investor shall have received a certificate, dated as of the Closing Date, signed on behalf of the Company by a senior executive officer certifying to the effect that the conditions set forth in Section 1.2(c)(ii)(A), Section 1.2(c)(ii)(B) and Section 1.2(c)(ii)(D) have been satisfied on and as of the Closing Date;

(D)        Since the date of this Agreement, no Material Adverse Effect shall have occurred and no change or other event shall have occurred that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(iii)        The obligation of the Company to consummate the sale of the Shares provided for in this Agreement is also subject to the satisfaction or written waiver by the Company of the following conditions to the Closing:

(A)        The representations and warranties of the Investor set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except to the extent that the failure to be true and correct (without regard to any materiality qualifications contained therein) would not materially adversely affect the ability of the Investor to perform its obligations hereunder and except that (1) representations and warranties made as of a specified date shall be true and correct as of such date and (2) the representations and warranties of the Investor set forth in Sections 2.3(d) and 2.3(f) shall be true and correct in all respects;

(B)         The Investor shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date; and

(C)        The Company shall have received a certificate, dated as of the Closing Date, signed on behalf of the Investor by a duly authorized person certifying to the effect that the conditions set forth in Section 1.2(c)(iii)(A) and Section 1.2(c)(iii)(B) have been satisfied on and as of the Closing Date.

4

ARTICLE 2.

REPRESENTATIONS AND WARRANTIES

2.1         Certain

        Terms.

(a)        As used in this Agreement, the term “Material Adverse Effect” means any circumstance, event, change, development or effect that, individually or in the aggregate, would reasonably be expected to (i) result in a material adverse effect on the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole, or (ii) materially impair or delay the ability of the Company or any of the Company Subsidiaries to perform its or their obligations under this Agreement to consummate the Closing or any of the transactions contemplated hereby; provided, however, that in determining whether a Material Adverse Effect has occurred under clause (i), there shall be excluded any circumstance, event, change, development or effect to the extent resulting from (A) actions or omissions of the Company or any Company Subsidiary expressly required or contemplated by the terms of this Agreement, (B) changes after the date hereof in general economic conditions in the United States, including financial market volatility or downturns, or in the markets in which the Company and the Company Subsidiaries operate, (C) changes after the date hereof affecting the banking industry generally, (D) any changes after the date hereof in applicable Laws or accounting rules or principles, including changes in GAAP, (E) changes in the market price or trading volume of the Common Stock or the Company’s other outstanding securities (but not the underlying causes of such changes), (F) any epidemic, pandemic or disease outbreak (including the Covid-19 virus) including any worsening of such conditions; or (G) any failure by the Company or any of the Company Subsidiaries to meet any internal projections or forecasts with regard to the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole (but not the underlying causes of such failure), in each case to the extent that such circumstance, event, change, development or effect referred to in clauses (B), (C), (D) and (F) do not have a disproportionate effect on the Company and the Company Subsidiaries compared to other participants in the industries or markets in which the Company and the Company Subsidiaries operate.

(b)        As used in this Agreement, the term “Previously Disclosed” (i) with regard to any Party, means information set forth in its Disclosure Schedule under Section references corresponding with the provision of this Agreement to which such information relates (including, in the case of the Company, information identified in the Company’s Disclosure Schedule); provided, however, that if such information is disclosed in such a way as to make its relevance or applicability to another provision of this Agreement reasonably apparent on its face, such information shall be deemed to be responsive to such other provision of this Agreement and (ii) with regard to the Company, includes information publicly disclosed by the Company in any reports, schedules, forms, statements and other documents filed or furnished by the Company under the Securities Act and the Exchange Act with the Securities and Exchange Commission (the “SEC”), including pursuant to Section 13(a) or 15(d) thereof, since December 31, 2017, in each case available at least two Business Days prior to the date of this Agreement (excluding any risk factor disclosures contained in such documents under the heading “Risk Factors,” any disclosure under the heading “Market Risk” and any disclosure of risks included in any “forward-looking statements” disclaimer or other statements that are similarly non-specific and are predictive or forward-looking in nature). Notwithstanding anything in this Agreement to the contrary, the mere inclusion of an item in a Disclosure Schedule shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

5

2.2       Representations and Warranties of the Company. Except as Previously Disclosed, the Company hereby represents and warrants to the Investor, as of the date of this Agreement and as of the Closing Date (except for the representations and warranties that are as of a specific date, which are made as of that date) that:

(a)         Organization and Authority.  Each of the Company and the Company Subsidiaries is a corporation or other entity duly organized and validly existing under the laws of the jurisdiction of its incorporation or organization. Each of the Company and the Company Subsidiaries is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, except where any failure to be so qualified would not reasonably be expected to materially and adversely affect the Company and the Company Subsidiaries, taken as a whole.  Further, each of the Company and the Company Subsidiaries has the corporate or other organizational power and authority to own its properties and assets and to carry on its business as it is now being conducted.  The Company has Previously Disclosed correct and complete copies of the certificate of incorporation and bylaws (or similar governing documents) as amended through the date of this Agreement for the Company and Broadway Federal Bank, f.s.b. (the “Bank”).  The Company is duly registered with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) as a savings and loan holding company under the Savings and Loan Holding Company Act, as amended, 12 U.S.C. 1467a (the “SLHCA Act”).  As of the date hereof, the Company is a certified “community development financial institution” designated as such under the Community Development Banking and Financial Institutions Act of 1994, as amended (12 U.S.C. Sections 5311 et seq.) and its implementing regulations, as applicable (a “CDFI”).  Following the consummation of the Bank Merger, the Surviving Bank will apply to be designated as a CDFI.

(b)         Company Subsidiaries.  As of the date of this Agreement, the Company has Previously Disclosed a true, complete and correct list of each entity in which the Company, directly or indirectly, owns sufficient capital stock or holds a sufficient equity or similar interest such that it is consolidated with the Company in the financial statements of the Company or has the power to elect a majority of the board of directors or other persons performing similar functions (each, a “Company Subsidiary” and, collectively, the “Company Subsidiaries”).

    Except for the Company Subsidiaries and as Previously Disclosed, the Company does not own beneficially or control, directly or indirectly, more than 5% of any class of equity securities or similar interests of any corporation, bank, business trust,
    association or similar organization, and is not, directly or indirectly, a partner in any general partnership or party to any joint venture or similar arrangement.  The Company owns, directly or indirectly, all of its interests in each Company
    Subsidiary free and clear of any and all Liens.  No equity security of any Company Subsidiary is or may be required to be issued by reason of any option, warrant, scrip, preemptive right, right to subscribe to, gross-up right, call or commitment of
    any character whatsoever relating to, or security or right convertible into, shares of any capital stock or other interest of such Company Subsidiary, and there are no contracts, commitments, understandings or arrangements by which any Company
    Subsidiary is bound to issue additional shares of its capital stock or other interest, or any option, warrant or right to purchase or acquire any additional shares of its capital stock.  The deposit accounts of the Bank are insured by the Federal
    Deposit Insurance Corporation \(“FDIC”\) to the fullest extent permitted by the Federal Deposit Insurance Act, as amended, and the rules and regulations of the FDIC thereunder, and all premiums and
    assessments required to be paid in connection therewith have been paid when due \(after giving effect to any applicable extensions\). The Company beneficially owns all of the outstanding capital securities of, and has sole control of, the Bank.

6

(c)          Capitalization.

(i)          Except as set forth on the Disclosure Schedule, as of the date hereof, the authorized Capital Stock of the Company consists of 50,000,000 shares of Voting Common Stock, par value $0.01 per share (“Voting Common Stock”), 25,000,000 shares of Non-Voting Common Stock, par value $0.01 (“Non-Voting Common Stock”), and 1,000,000 shares of preferred stock, par value $0.01 (“Preferred Stock”).

(ii)        As of the date hereof, before giving effect to the transaction provided for herein, the Merger Transactions and the Concurrent Other Transactions the Company has issued and outstanding: (i) 19,281,758 of shares of Voting Common Stock, including 556,169 shares of Voting Common Stock granted in respect of outstanding restricted stock awards, (ii) 1,637,902 shares of Voting Common Stock held by the trust for the Broadway Federal Bank, f.s.b. Employee Stock Ownership Plan, and (iii) 8,756,396 shares of Non-Voting Common Stock.

(iii)        As of the date hereof, other than in respect of awards outstanding under or issuable pursuant to the Company’s 2008 Long-Term Incentive Plan (the “Company

        Stock Plan”\) consisting of options to purchase an aggregate of 450,000 shares of common stock, and except in connection with this Agreement and the transactions contemplated hereby, the Merger Agreement and the Concurrent Other
    Transactions, the Company has not \(A\) agreed to issue or authorized the issuance after the date hereof of any shares of Common Stock or Preferred Stock, or any securities convertible into or exchangeable or exercisable for shares of Common Stock or
    Preferred Stock, \(B\) reserved for issuance any shares of Capital Stock of the Company or \(C\) repurchased or redeemed, or agreed to or authorized the repurchase or redemption of, any shares of Capital Stock of the Company.

(iv)       All of the issued and outstanding shares of Capital Stock of the Company have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, except for the preemptive rights granted to certain institutional stockholders of the Company identified on Schedule 2.2(c)(iv) of the Company’s Disclosure Schedule.  None of the outstanding shares of Capital Stock or other securities of the Company or any of the Company Subsidiaries was issued, sold or offered by the Company or any Company Subsidiary in violation of the Securities Act of 1933, as amended (the “Securities Act”) or the securities or blue sky laws of any state or jurisdiction, or in violation of any agreement, arrangement or commitment to which the Company was or is a party or subject, or in violation of any preemptive or similar rights of any Person.  No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which the stockholders of the Company may vote (“Voting Debt”) are issued and outstanding.

(v)        As of the date of this Agreement, except for the outstanding awards under the Company Stock Plan, the Company does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of, or securities or rights convertible into or exchangeable or exercisable for, any shares of Capital Stock or Voting Debt of the Company.

7

(d)          Authorization; No Conflicts.

(i)        The Company has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The Board of Directors has approved the transactions contemplated by this Agreement.  This Agreement has been duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery by the Investor, is the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles (whether applied in equity or at law).

(ii)        Neither the execution and delivery by the Company of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by the Company with any of the provisions hereof, will, with or without the passage of time and giving of notice, (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any liens, charges, adverse rights or claims, pledges, covenants, title defects, security interests or other encumbrances of any kind (“Liens”) upon any of the properties or assets of the Company or any Company Subsidiary, under any of the terms, conditions or provisions of (1) the certificate of incorporation or bylaws (or similar governing documents) of the Company and each Company Subsidiary or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any of the Company Subsidiaries is a party or by which it may be bound, or to which the Company or any of the Company Subsidiaries, or any of the properties or assets of the Company or any of the Company Subsidiaries may be subject, or (B) violate any Law applicable to the Company or any of the Company Subsidiaries or any of their respective properties or assets except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(e)          Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of this Agreement or for the sale by the Company of Common Stock to the Investor pursuant to this Agreement.

(f)         Litigation and Other Proceedings.  Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, there is no pending or, to the Knowledge of the Company, threatened claim, action, suit, arbitration, complaint, charge or investigation or proceeding (each an “Action”) against the Company or any Company Subsidiary or any of their respective assets, rights or properties, nor is the Company or any Company Subsidiary a party or named as subject to the provisions of any order, writ, injunction, settlement, judgment or decree of any court, arbitrator or government agency, or instrumentality.  There has not been, and to the Knowledge of the Company, there is not pending or contemplated, any investigation or other Action by the SEC involving the Company or any current or former director or officer of the Company in his or her capacity as such.

8

(g)       Financial Statements.  The audited consolidated balance sheets of the Company and the Company Subsidiaries and the related consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2019 and the unaudited consolidated balance sheets of the Company and the Company Subsidiaries and the related unaudited consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s quarterly reports on Form 10-Q filed with the SEC for the quarterly period ending September 30, 2020 (the “Company Financial Statements”) (i) have been prepared from, and are in accordance with, the books and records of the Company and the Company Subsidiaries, (ii) complied, as of the date of such filing, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, (iii) have been prepared in accordance with GAAP applied on a consistent basis and (iv) present fairly in all material respects the consolidated financial position of the Company and the Company Subsidiaries at the dates and the consolidated results of operations, changes in stockholders’ equity and cash flows of the Company and the Company Subsidiaries for the periods stated therein.

(h)         Reports.  Since December 31, 2017, the Company and each Company Subsidiary have filed all material reports, registrations, documents, filings, statements and submissions, together with any required amendments thereto, that they were required to file with any Governmental Entity, including all those required under the Exchange Act, including all reports, registrations, documents, filings, statements and submissions required pursuant to Section 13(a) or 15(d) thereof (the foregoing, collectively, being referred to herein as the “Company Reports”) and have paid all material fees and assessments due and payable in connection therewith.  As of their respective filing dates, or as subsequently amended prior to the date hereof, the Company Reports complied in all material respects with all statutes and applicable rules and regulations of the applicable Governmental Entities.  As of the date of this Agreement, there are no outstanding comments from the SEC or any other Governmental Entity with respect to any Company Report that were the subject of written correspondence that have not been resolved.  The Company Reports, including the documents incorporated by reference in each of them, each contained all the information required to be included in it and, when it was filed and, as of the date of each such Company Report filed with the SEC, or if amended prior to the date of this Agreement, as of the date of such amendment, did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in it, in light of the circumstances under which they were made, not misleading and complied as to form in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  No executive officer of the Company has failed in any respect to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002.

9

(i)          Internal Accounting and Disclosure Controls.  The records, systems, controls, data and information of the Company and the Company Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of the Company or the Company Subsidiaries (including all means of access thereto and therefrom) or reputable banking industry service providers, except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have an adverse effect on the system of internal accounting controls described below in this Section 2.2(i).  The Company (i) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) intended to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known to the chief executive officer and the chief financial officer of the Company by others within those entities, and (ii) has disclosed, based on its most recent evaluation prior to the date of this Agreement, to the Company’s outside auditors and the audit committee of the Board of Directors (A) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information, and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.  As of the date of this Agreement, the Company has no Knowledge of any reason that its outside auditors and its chief executive and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when due.  Since December 31, 2017, neither the Company nor any Company Subsidiary nor any director or officer of the Company nor, to the Knowledge of the Company, any employee, auditor, accountant or representative of the Company or any Company Subsidiary has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any Company Subsidiary or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any Company Subsidiary has engaged in questionable accounting or auditing practices.

(j)           Data Privacy

(i)        The Company and the Company Subsidiaries have taken commercially reasonable steps consistent with customary industry practices to protect the confidentiality, integrity, availability and security of the computers, servers, workstations, routers, hubs, switches, circuits, networks and other information technology equipment owned or controlled by them or by any third party and material to the Company and the Company Subsidiaries (the “Company IT Assets”) (and all information and transactions stored or contained therein or transmitted thereby) against any unauthorized use, access, interruption, modification or corruption, and there has been no unauthorized use, access, interruption, modification or corruption of the Company IT Assets.

10

(ii)        In connection with their receipt, purchase, collection, securing, safeguarding, storage, transfer (including any transfer across national borders), disclosure, destruction/disposal, and/or use or other processing of any Personal Information, each of the Company and the Company Subsidiaries, is and has been, in material compliance with all Privacy Laws, their respective privacy policies and the requirements of any contract or codes of conduct to which any of the Company or the Company Subsidiaries is a party.  The privacy policies of the Company are customary for the industry in which the Company operates.  The Company and the Company Subsidiaries have commercially reasonable and appropriate physical, technical, organizational, and administrative security measures and policies in place designed to protect all Personal Information collected by them or on their behalf from and against unauthorized access, use, interruption, modification, corruption, and/or disclosure.  The Company and the Company Subsidiaries have binding written agreements obligating (in accordance with and as required by Privacy Laws (as applicable)) all third parties collecting, accessing, receiving, storing or processing Personal Information on behalf of the Company and the Company Subsidiaries to (i) comply with all applicable Privacy Laws, (ii) take commercially reasonable and appropriate steps to protect and secure such Personal Information from and against unauthorized access, use interruption, modification, corruption, and/or disclosure which are no less stringent than those applied by the Company and the Company Subsidiaries and (iii) promptly notify the Company and the Company Subsidiaries of any unauthorized access, use interruption, modification, corruption, and/or disclosure of Personal Information or Company IT Assets processing Personal Information.  The Company and the Company Subsidiaries are, and since December 31, 2017, have been, in compliance in all material respects with all Privacy Laws and any other applicable Laws in all relevant jurisdictions relating to data loss, theft and breach of security notification obligations.  Since December 31, 2017, none of the Company or any of the Company Subsidiaries has experienced a material breach of its information technology systems or a data loss, exposure or theft as defined by the Laws in all relevant jurisdictions.  None of the Company or any of the Company Subsidiaries has been charged with, or received any notice of any claims of, the violation in any material respect of any Privacy Laws or any of their respective privacy policies.  The consummation of the transactions contemplated hereby will not breach or otherwise cause any violation of any Privacy Law.

(iii)         For the purposes of this Section 2.2(j):

(1)        “Personal Information” means, in addition to any definition provided by applicable law or by the Company and the Company Subsidiaries in any of their respective privacy policies, contracts, or other public-facing statements for any similar term (e.g., “personally identifiable information” or “PII”), all information identifying, regarding or capable of being associated with an individual person or device.  Personal Information may relate to any individual, including a current, prospective or former client (or a client’s customer or end user) or employee of any Person, and includes information in any form, including paper, electronic and other forms.

(2)         “Privacy Laws” means all applicable laws, legal requirements, and self-regulatory guidelines and principles relating to privacy, data security, and Personal Information and similar applicable consumer protection laws, including with respect to the receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security, disposal, destruction, disclosure or transfer of Personal Information and any and all applicable laws governing breach notification in connection with Personal Information.  As used in this Agreement, “Privacy Laws” shall include the California Consumer Privacy Act, General Data Protection Regulation and the rules and regulations promulgated thereunder, and applicable state laws.

(k)         No Undisclosed Liabilities.  There are no liabilities of the Company or any of the Company Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, except for (i) liabilities adequately reflected or reserved against in accordance with GAAP in the Company’s audited balance sheet as of December 31, 2019 and (ii) liabilities that have arisen in the ordinary and usual course of business and consistent with past practice since December 31, 2019 and that have not or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

11

(l)       Mortgage Lending.  The Company and each of the Company Subsidiaries have complied in all material respects with, and all documentation in connection with the origination, processing, underwriting and credit approval of any mortgage loan originated, purchased or serviced by the Company or any Company Subsidiary has satisfied, in all material respects (i) all Laws with respect to the origination, insuring, purchase, sale, servicing, or filing of claims in connection with mortgage loans, including all Laws relating to real estate settlement procedures, consumer credit protection, truth in lending laws, usury limitations, fair housing, transfers of servicing, collection practices, equal credit opportunity and adjustable rate mortgages, (ii) the responsibilities and obligations relating to mortgage loans set forth in any agreement between the Company and any Agency, Loan Investor or Insurer, (iii) the applicable rules, regulations, guidelines, handbooks and other requirements of any Agency, Loan Investor or Insurer and (iv) the terms and provisions of any mortgage or other collateral documents and other loan documents with respect to each mortgage loan.

(m)        Bank Secrecy Act; Anti-Money Laundering; OFAC; and Customer Information.  The Company is not aware of, has not been advised of, and, to the Knowledge of the Company, has no reason to believe that any facts or circumstances exist that would cause it or any Company Subsidiary to be deemed to be not operating in compliance, in all material respects, with the Bank Secrecy Act of 1970, as amended, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (also known as the USA PATRIOT Act), any order or regulation issued by the Treasury’s Office of Foreign Assets Control (“OFAC”), or any other applicable anti-money laundering or anti-terrorist-financing statute, rule or regulation.  The Company is not aware of any facts or circumstances that would cause it to believe that any nonpublic customer information has been disclosed to or accessed by an unauthorized third party in a manner that would cause or require it to undertake any material remedial action.  The Company and each of the Company Subsidiaries have adopted and implemented an anti-money laundering program that contains adequate and appropriate customer identification verification procedures that comply with the USA PATRIOT Act and such anti-money laundering program meets the requirements in all material respects of Section 352 of the USA PATRIOT Act and the regulations thereunder, and they have complied in all respects with any requirements to file reports and other necessary documents as required by the USA PATRIOT Act and the regulations thereunder.  The Company will not directly or indirectly use the proceeds of the sale of the Common Stock pursuant to transactions contemplated by this Agreement, or lend, contribute or otherwise make available such proceeds to any Company Subsidiary, joint venture partner or other Person, towards any sales or operations in any country appearing on the OFAC Specially Designated Nationals List (“SDN List”) or for the purpose of financing the activities of any Person currently appearing on the SDN List.

12

(n)        Certain Payments.  Neither the Company nor any of the Company Subsidiaries, nor any directors or officers of the Company, nor to the Knowledge of the Company, employees or any Affiliates of the Company or the Company Subsidiaries or any other Person who to the Knowledge of the Company is associated with or acting on behalf of the Company or any of the Company Subsidiaries has directly or indirectly (i) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment in material violation of any Law, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable anti-bribery or anti-corruption laws, to any Person, private or public, regardless of form, whether in money, property, or services (A) to obtain favorable treatment in securing business for the Company or any of the Company Subsidiaries, (B) to pay for favorable treatment for business secured by the Company or any of the Company Subsidiaries, or (C) to obtain special concessions or for special concessions already obtained, for or in respect of the Company or any of the Company Subsidiaries or (ii) established or maintained any fund or asset with respect to the Company or any of the Company Subsidiaries that was required by Law or GAAP to have been recorded and was not recorded in the books and records of the Company or any of the Company Subsidiaries.  Neither the Company nor any Company Subsidiaries has conducted any internal investigation, made any voluntary, directed, or involuntary disclosure to any Governmental Entity, or received any audit report, written communication from a Governmental Entity, or whistleblower or other written complaint, involving alleged violations in any material respect of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable anti-bribery or anti-corruption laws on the part of the Company, any of the Company Subsidiaries, or any Person acting on behalf of the Company or any of the Company Subsidiaries.

(o)         Absence of Certain Changes.  Since December 31, 2019 and except as Previously Disclosed or as required or contemplated by the terms of this Agreement, (i) the Company and the Company Subsidiaries have conducted their respective businesses in all material respects in the ordinary and usual course of business consistent with past practices, (ii) through (and including) the date of this Agreement, no fact, event, change, condition, development, circumstance or effect has occurred that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (iii) no material default (or event which, with notice or lapse of time, or both, would constitute a material default) exists on the part of the Company or any Company Subsidiary in the due performance and observance of any term, covenant or condition of any agreement to which the Company or any Company Subsidiary is a party and which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(p)          Compliance with Laws.

(i)          The Company, each Company Subsidiary and each of their officers, agents, representatives and employees possesses, holds and have all material permits, licenses, franchises, authorizations, orders, consents, registrations, accreditations and approvals of, and have made all filings, applications and registrations with, Governmental Entities that are required in order to permit the Company and each Company Subsidiary to own or lease their properties and assets and to carry on their business as presently conducted and that are material to the business of the Company and each Company Subsidiary (collectively, the “Governmental Authorizations”).  The Company and the Company Subsidiaries, and to the Company’s Knowledge, their respective officers, agents, representatives and employees, are not in default under any of such Governmental Authorizations, which default(s) would be, or be reasonably expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries (taken as a whole).  The Company and each Company Subsidiary have complied with and (A) are not, and since December 31, 2017, have not been, in default or violation in any respect of, (B) are not under investigation with respect to, and (C) have not been threatened to be charged with or given notice of any material violation of, any applicable material domestic (federal, state or local) or foreign law, statute, ordinance, license, rule, regulation, policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental Entity (each, a “Law”),

    other than such noncompliance, defaults or violations as would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries \(taken as a whole\).  No Governmental Entity has placed any
    material restriction on the business or properties of the Company or any of the Company Subsidiaries.  As of the date hereof, the Bank has a Community Reinvestment Act rating of “outstanding.”

13

(ii)       Except for normal examinations conducted by a Governmental Entity in the ordinary course of business of the Company and the Company Subsidiaries, (A) no Governmental Entity has initiated or has pending any proceeding or, to the Knowledge of the Company, investigation into the business or operations of the Company or any of the Company Subsidiaries since December 31, 2017, (B) there is no unresolved violation or exception by any Governmental Entity with respect to any report or statement relating to any examinations or inspections of the Company or any of the Company Subsidiaries, and (C) there have been no formal or informal inquiries by, or disagreements or disputes with, any Governmental Entity with respect to the business, operations, policies or procedures of the Company or any of the Company Subsidiaries since December 31, 2017, in each case of clauses (A) through (C), which would reasonably be expected, individually or in the aggregate, to be material to the Company and the Company Subsidiaries (taken as a whole).

(iii)       The Company and the Company Subsidiaries are not, and since December 31, 2017, have not been, in violation or default of any provisions of their respective certification of incorporation or bylaws (or similar governing documents).

(q)         Adequate Capitalization.  As of September 30, 2020, the Bank met or exceeded the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.  As of the Closing and after giving effect to this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions, the Bank meets or exceeds the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.

(r)         Agreements with Regulatory Agencies.  The Company and the Company Subsidiaries (A) are not subject to any cease-and-desist or other similar order or enforcement action issued by, (B) are not a party to any written agreement, consent agreement or memorandum of understanding with, (C) are not a party to any commitment letter or similar undertaking to, and (D) are not subject to any capital directive by, and since December 31, 2017, neither the Company nor any of the Company Subsidiaries has adopted any board resolutions at the request of any Governmental Entity that currently restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its liquidity and funding policies and practices, its ability to pay dividends, its credit, risk management or compliance policies, its internal controls, its management or its operations or business, nor has the Company nor any of the Company Subsidiaries been advised since December 31, 2019 by any Governmental Entity that it is considering issuing, initiating, ordering, or requesting any of the same.

14

(s)         Insurance.  The Company and each of the Company Subsidiaries are presently insured, and have been insured for at least the past two years, for reasonable amounts with financially sound and reputable insurance companies against such risks as companies engaged in a similar business would, in accordance with good business practice, customarily be insured.  All of the policies, bonds and other arrangements providing for the foregoing (the “Company Insurance Policies”) are in full force and effect, the premiums due and payable thereon have been or will be timely paid through the Closing Date, and there is no material breach or default (and no condition exists or event has occurred that, with the giving of notice or lapse of time or both, would constitute such a material breach or default) by the Company or any of the Company Subsidiaries under any of the Company Insurance Policies or, to the Knowledge of the Company, by any other party to the Company Insurance Policies.  Neither the Company nor any of the Company Subsidiaries has received any written notice of cancellation or non-renewal of any Company Insurance Policy nor is the termination of any such policies threatened in writing by the insurer, and there is no material claim for coverage by the Company, or any of the Company Subsidiaries, pending under any of such Company Insurance Policies as to which coverage has been denied or disputed by the underwriters of such Company Insurance Policies or in respect of which such underwriters have reserved their rights.

(t)          Title.  The Company and the Company Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and valid title to all material personal property owned by them, in each case free and clear of all Liens, except for Liens which do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any Company Subsidiary.  Any real property and facilities held under lease by the Company or the Company Subsidiaries are leased pursuant to valid, subsisting and enforceable leases with such exceptions that are not material and do not interfere with the use made and proposed to be made of such property and facilities by the Company or the Company Subsidiaries.

(u)          Intellectual

          Property. The Company and the Company Subsidiaries own or possess adequate rights or licenses to use all trademarks, service marks and all applications and registrations therefor, trade names, patents, patent rights, copyrights,
      original works of authorship, inventions, trade secrets and other intellectual property rights \(collectively, “Intellectual Property Rights”\) used in their businesses as conducted on the date of this
      Agreement, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  To the Knowledge of the Company, no product or service of the Company or the Company Subsidiaries infringes the
      Intellectual Property Rights of others.

(v)          Employee Benefits.

(i)         Section 2.2(v) of the Disclosure Schedule sets forth a correct and complete list of each “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including, without limitation, multiemployer plans within the meaning of Section 3(37) of ERISA), and all stock purchase, stock option, severance, employment, change-in-control, fringe benefit, bonus, incentive, deferred compensation and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transactions contemplated by this Agreement or otherwise), whether formal or informal, oral or written, under which (A) any current or former employee or director of the Company or any of the Company Subsidiaries (the “Company Employees”) has any present or future right to benefits and which are contributed to, sponsored by or maintained by the Company or any of the Company Subsidiaries or (B) the Company or any Company Subsidiary has had or has any present or future liability. All such plans, agreements, programs, policies and arrangements are collectively referred herein to as the “Benefit

        Plans.”

15

(ii)         (A) Each Benefit Plan has been established and administered in all material respects in accordance with its terms, and in compliance with the applicable provisions of ERISA, the Code and other Laws; (B) no “reportable event” (as such term is defined in Section 4043 of ERISA) that could reasonably be expected to result in material liability has occurred with respect to any Benefit Plan, and (C) no non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) has been engaged in by the Company or any Company Subsidiary with respect to any Benefit Plan that has or is expected to result in any material liability or “accumulated funding deficiency” (as such term is defined in Section 302 of ERISA and Section 412 of the Code (whether or not waived)).

(iii)        The Company and the Company Subsidiaries will be in compliance, as of the Closing Date, with Sections 111 and 302 of the Emergency Economic Stabilization Act of 2008, as amended by the U.S. American Recovery and Reinvestment Act of 2009, including all guidance issued thereunder by a Governmental Entity (collectively “EESA”).

(iv)         None of the Company or any Company Subsidiary or any trade or business, whether or not incorporated (an “ERISA Affiliate”), all of which together with the Company or any Company Subsidiary would be deemed a “single employer” within the meaning of Section 4001 of ERISA, has, at any time during the last six years, contributed to or been obligated to contribute to any plan that is (i) subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code or (ii) a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA (a “Multiemployer Plan”) or a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA; and none of Company and the Company Subsidiaries nor any of their respective ERISA Affiliates has incurred any liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as those terms are defined in Part I of Subtitle E of Title IV of ERISA.

(v)         Neither the Company nor any Company Subsidiary has any material unfunded liabilities existing under or in connection with any Benefit Plan, and each such Benefit Plan has been established and administered in all respects in accordance with its terms, and in compliance with applicable law, except where failure to be in compliance would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.

(vi)        Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby could (either alone or in conjunction with any other event) reasonably be expected to result in, cause the accelerated vesting, funding or delivery of, or increase the amount or value of, any payment or benefit to any employee, officer or director of the Company or any Company Subsidiary.

16

(w)        Taxes.  All material Tax Returns required to be filed by, or on behalf of, the Company or the Company Subsidiaries have been timely filed, or will be timely filed, in accordance with all Laws, and all such Tax Returns are, or will be at the time of filing, complete and correct in all material respects.  The Company and the Company Subsidiaries have timely paid all material Taxes due and payable (whether or not shown on such Tax Returns), or, where payment is not yet due, have made adequate financial statement provisions therefor in accordance with GAAP.  There are no Liens with respect to Taxes upon any of the assets or properties of either the Company or the Company Subsidiaries other than with respect to Taxes not yet due and payable.  As of the date of this Agreement, there are not pending or threatened in writing, any audits, examinations, investigations or other proceedings initiated by the Internal Revenue Service in respect of U.S. federal income tax matters.  None of the Company or any of the Company Subsidiaries has been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the date hereof that was purported or intended to be governed by Section 355 of the Code (or any similar provision of state, local or foreign Law).  The Company and each Company Subsidiary is, and has been since the date of its formation, a corporation for U.S. federal income tax purposes, and neither the Company nor any Company Subsidiary has elected pursuant to the Code to be treated as a Subchapter S corporation pursuant to Section 1362(a) of the Code, nor has it made any other elections pursuant to the Code (other than elections that relate solely to methods of accounting, depreciation or amortization) that would have, or be reasonably expected to result in, individually or in the aggregate, a Material Adverse Effect.

(x)          Labor.

(i)        Employees of the Company and the Company Subsidiaries are not represented by any labor union nor are any collective bargaining agreements otherwise in effect with respect to such employees.  No labor organization or group of employees of the Company or any Company Subsidiary has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions presently pending or threatened to be brought or filed with the National Labor Relations Board or any other labor relations tribunal or authority, nor have there been in the last three years.  There are no strikes, work stoppages, slowdowns, labor picketing lockouts, material arbitrations or material grievances, or other material labor disputes pending or, to the Knowledge of the Company, threatened against or involving the Company or any Company Subsidiary, nor have there been any in the past year.

(ii)         Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company and the Company Subsidiaries are in compliance with all federal and state Laws and requirements respecting employment and employment practices, terms and conditions of employment, collective bargaining, disability, immigration, health and safety, wages, hours and benefits, non-discrimination in employment, workers’ compensation and the collection and payment of withholding and/or payroll taxes and similar taxes.

(iii)      There is no charge or complaint pending or threatened before any Governmental Entity alleging unlawful discrimination in employment practices, unfair labor practices or other unlawful employment practices by the Company or any Company Subsidiary.

17

(iv)       To the Knowledge of the Company, since December 31, 2017, no allegations of sexual harassment or misconduct have been made against (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000. Since December 31, 2017, neither the Company nor any of the Company Subsidiaries has entered into any settlement agreements related to allegations of sexual harassment or misconduct by (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000.

(y)         Brokers and Finders.  Except as Previously Disclosed, neither the Company nor any of its officers, directors, employees or agents has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Company in connection with this Agreement or the transactions contemplated hereby, the fees of which would be payable by the Investor.

(z)          Offering of Securities.

(i)         Neither the Company nor any Person acting on its behalf has taken any action (including any offering of any securities of the Company under circumstances which would require the integration of such offering with the offering of any of the Shares to be issued pursuant to this Agreement under the Securities Act and the rules and regulations of the SEC promulgated thereunder) which would subject the offering, issuance or sale of any of the Shares to be issued pursuant to this Agreement to be subject to the registration requirements of the Securities Act.

(ii)         The Company is not disqualified from relying on Rule 506 of Regulation D (“Rule 506”) under the Securities Act for any of the reasons stated in Rule 506(d) (each such reason, a “Disqualification Event”) in connection with the issuance and sale of the Shares to the Investor.  The Company has furnished the Investor, a reasonable time prior to the date hereof, a description in writing of any matters that would have triggered disqualification under Rule 506(d) but which occurred before September 23, 2013, in each case, in compliance with the disclosure requirements of Rule 506(e).

(aa)      Affiliate Transactions.  No officer, director, five percent (5%) stockholder or other Affiliate of the Company (or any Company Subsidiary), or any individual who, to the Knowledge of the Company, is related by marriage or adoption to or shares the same home as any such Person, or any entity which, to the Knowledge of the Company, is controlled by any such Person (collectively, an “Insider”), is a party to any contract or transaction with the Company (or any Company Subsidiary) which pertains to the business of the Company (or any Company Subsidiary) or has any interest in any property, real or personal or mixed, tangible or intangible, used in or pertaining to the business of the Company or any Company Subsidiary.  The foregoing representation and warranty does not include deposit accounts of an Insider at the Company or any Company Subsidiary or loans of $250,000 or less made in the ordinary course of business to Insiders in compliance with Regulation O and other applicable Law.

18

(bb)       Private Placement.  Assuming the accuracy of the Investor’s representations and warranties set forth in Section 2.3 of this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investor.  Assuming the Stockholder Approval is obtained (if required), the issuance and sale of the Shares hereunder does not contravene the rules and regulations of the Nasdaq Stock Market.

(cc)       Listing and Maintenance Requirements.  The Company’s Voting Common Stock is (and at the Closing, the Class A Common Stock will be) registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to terminate the registration of the Voting Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received written notice from the Nasdaq Stock Market to the effect that the Company is not in compliance with the listing or maintenance requirements of the Nasdaq Stock Market.

(dd)        Investment Company.  Neither the Company nor any of the Company Subsidiaries is required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

(ee)       Acknowledgment Regarding the Investor’s Purchase of Shares.  The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby.  The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions and any advice given by the Investor or any of its representatives or agents in connection with this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions is merely incidental to Investor’s purchase of the Shares.

(ff)         No General Solicitation or General Advertising.  Neither the Company nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Shares.

(gg)        Shell Company Status.  The Company is not, and has never been, an issuer identified in Rule 144(i)(1) under the Securities Act.

(hh)       Valid Issuance of Shares.  The Shares sold and delivered in accordance with the terms hereof for the consideration expressed herein will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws.  Assuming the accuracy of the representations and warranties of the Investor set forth in Section 2.3, the Shares will be issued in compliance with all applicable federal and state securities laws.

19

2.3        Representations and Warranties of the Investor. Except as Previously Disclosed, the Investor hereby represents and warrants to the Company, as of the date hereof and as of the Closing Date (except for the representations and warranties that are as of a specific date which are made as of that date) that:

(a)         Organization and Authority.  The Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and where failure to be so qualified would be reasonably expected to materially and adversely impair or delay its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

(b)          Authorization; No Conflicts.

(i)       The Investor has the necessary power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by its board of directors, general partner or managing members, investment committee, investment adviser or other authorized person, as the case may be, and no further approval or authorization by any of its stockholders, partners or other equity owners, as the case may be, is required.  This Agreement has been duly and validly executed and delivered by the Investor and, assuming due authorization, execution and delivery by the Company is the valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

(ii)       Neither the execution, delivery and performance by the Investor of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by the Investor with any of the provisions hereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any Liens upon any of the properties or assets of the Investor under any of the terms, conditions or provisions of (1) its articles of incorporation or bylaws, its certificate of limited partnership or partnership agreement or its similar governing documents or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Investor is a party or by which the Investor may be bound, or to which the Investor or any of the properties or assets of the Investor may be subject, or (B) violate any Law applicable to the Investor or any of its properties or assets, except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to materially adversely affect the Investor’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

(c)          Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of this Agreement or for the purchase by the Investor of the Shares pursuant to this Agreement.

20

(d)        Purchase for Investment; Accredited Investor Status; Pre-Existing Relationship.  The Investor acknowledges that the Shares to be purchased by the Investor pursuant to this Agreement have not been registered under the Securities Act or under any state securities laws and may not be resold or transferred by the Investor without such registration or appropriate reliance on any available exemption from such requirements.  The Investor (i) is acquiring the Shares pursuant to an exemption from the registration requirements of the Securities Act and other applicable securities laws solely for investment with no present intention to distribute any of the Shares to any Person, (ii) will not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, (iii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Shares and of making an informed investment decision and (iv) is an “accredited investor” (as that term is defined by Rule 501 under the Securities Act), (vi) is aware that the Company has entered into the Merger Agreement pursuant to which it is required to file with the SEC a Registration Statement on Form S-4 (the “Registration Statement”), and (vi) began discussions regarding the potential for the Investment by this Agreement with representatives of the Company before the Registration Statement was filed with the SEC and Investor’s purchase of the Shares was not solicited by the Registration Statement or any other filing made by the Company with the SEC.

(e)          Brokers and Finders.  Neither the Investor, nor its Affiliates nor any of their respective officers or directors, has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Investor in connection with this Agreement or the transactions contemplated hereby.

(f)          Access to Information.  The Investor acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and the Company Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the Investment; and (iv) the opportunity to ask questions of management of the Company.

(g)       No Reliance.  The Investor has not relied on any representation or warranty made by any Person by or on behalf of the Company, including, without limitation, the Placement Agents, in connection with the Investment other than those contained in this Agreement.

(h)         Placement Agents.  The Investor acknowledges that the Placement Agents have not performed any due diligence review on behalf of the Investor.  Furthermore, the Investor will purchase the Shares directly from the Company and not from the Placement Agents and understands that neither the Placement Agents nor any other broker or dealer has any obligation to make a market in the Common Stock.

21

(i)          Accuracy of Representations.  The Investor understands that each of the Placement Agents and the Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements in connection with the transactions contemplated by this Agreement and agrees that if any of the representations or acknowledgements made by it are no longer accurate as of the Closing Date, or if any of the agreements made by it are breached on or prior to the Closing Date, it shall promptly notify the Placement Agents and the Company.

ARTICLE 3.

COVENANTS

3.1        Conduct

        of Business Prior to Closing. Except as otherwise expressly required or contemplated by this Agreement or applicable Law, or with the prior written consent of the Investor, between the date
    of this Agreement and the Closing, the Company shall, and the Company shall cause each Company Subsidiary to:

(a)          use commercially reasonable efforts to conduct its business only in the ordinary course of business consistent with past practice; and

(b)         use commercially reasonable efforts to (i) preserve the present business operations, organization (including officers and employees) and goodwill of the Company and any Company Subsidiary and (ii) preserve business relationships with customers, suppliers, consultants and others having business dealings with the Company; provided, however, that nothing in this clause (b) shall place any limit on the ability of the Board of Directors to act in accordance with, or require any actions that the Board of Directors may, in good faith, determine to be inconsistent with, its duties or the Company’s obligations under applicable Law or imposed by any Governmental Entity.

3.2         Use of Proceeds. The proceeds received by the Company from the sale of the Shares contemplated hereunder (net of any applicable costs and expenses) will be used in a manner consistent in all material respects with the capital deployment plan provided by the Company to the Investor prior to the execution of this Agreement.

3.3         Regulatory Filings. The Company shall make all filings pursuant to any applicable state securities laws and Regulation D of the Securities Act that are required to be made in connection with the Closing.

3.4       Confidentiality. The Investor acknowledges that the information being provided to it in connection with the transactions contemplated hereby includes confidential information that has not been publicly disclosed and agrees to maintain the confidentiality of the information with the same degree of care that it uses to protect its own confidential information.

3.5         Publicity. The Company shall not publicly disclose the financial or other terms of the transactions contemplated hereby or the name of any Investor or any Affiliate or investment adviser of any Investor, or include the name of any Investor or any Affiliate or investment adviser of any Investor in any press release or filing with the SEC or the Nasdaq Stock Market and shall not use any names, trademarks, service marks or trade names of the Investor or its Affiliates in any form of advertising and publicity or public statements, without the prior written consent of such Investor, except (i) as required by federal securities law in connection with the filing of final transaction documents with the SEC or (ii) to the extent such disclosure is required by applicable law, at the request of the staff of the SEC or at the request of the Nasdaq Stock Market regulations, in which case the Company shall provide each such Investor with prior written notice of such disclosure and the form of such disclosure shall be subject to the approval of such Investor, such approval not to be unreasonably withheld or delayed.

22

3.6       Commercially Reasonable Efforts. Upon the terms and subject to the conditions herein provided, except as otherwise provided in this Agreement, each of the Parties hereto agrees to use its commercially reasonable efforts to take or cause to be taken all action, to do or cause to be done and to assist and cooperate with the other Party in doing all things necessary, proper or advisable under applicable Laws to consummate and make effective the transactions contemplated hereby, including but not limited to: (a) the satisfaction of the conditions precedent to the obligations of the Parties; (b) the obtaining of applicable Governmental Consents, and consents, waivers and approvals of any other third parties; (c) defending of any claim, action, suit, investigation or proceeding, whether judicial or administrative, challenging this Agreement or the performance of the obligations hereunder; and (d) the execution and delivery of such instruments, and the taking of such other actions as the other Party may reasonably request in order to carry out the intent of this Agreement.  Notwithstanding the foregoing, under no circumstances will the Investor be required to disclose to the Company, the Company Subsidiaries or any third party any information the disclosure of which is prohibited by Law, nor shall it be required to agree to any restrictions, conditions or commitments imposed or otherwise required by any Government Entity that are determined by the Investor in its sole discretion to be unduly burdensome, other than customary passivity commitments, in order to consummate and make effective the transactions contemplated hereby.

3.7         Legend.

(a)          The Investor agrees that all certificates or other instruments representing the Shares subject to this Agreement shall bear legends substantially to the following effect, until such time as they are not required under Section 3.7(b)

“THE SHARES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.”

(b)          Upon request of the Investor, the Company shall promptly cause such legends to be removed from any certificate for any Shares to be so transferred if such Shares are being transferred pursuant to an exemption from the registration securities requirements of the Securities Act and applicable state Laws, subject to receipt by the Company of an opinion of counsel for the Investor reasonably satisfactory to the Company to the effect that such legend is no longer required under the Securities Act and applicable state Laws.  The Investor acknowledges that the sale of the Shares provided for herein has not been registered under the Securities Act or under any state securities Laws and agrees that it shall not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities Laws.

23

3.8         Exchange Listing. The

    Company shall use its reasonable best efforts to cause the following to be approved for listing on the Nasdaq Stock Market as promptly as possible: the Shares.

3.9       Authorized

        Shares. The Company will at all times reserve, free of any preemptive or similar rights of stockholders of the Company, a number of unissued shares of Class A Common Stock, sufficient to
    convert automatically, in accordance with the terms of the certificate of incorporation of the Company, all of the shares of Class C Common Stock then outstanding.

3.10       Rule

        144 Reporting. With a view to making available to the Investor the benefits of certain rules and regulations of the SEC which may permit the sale of the Shares by the Investor without
    registration under the Securities Act upon compliance with the initial holding period and other applicable requirements of Rule 144 under the Securities Act, the Company agrees to use its reasonable best efforts to:

(i)       make and keep adequate current public information with respect to the Company available, as those terms are understood and defined in Rule 144(c)(1) or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of this Agreement;

(ii)         so long as the Investor owns any of the Shares, furnish to the Investor forthwith upon request: (A) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 under the Securities Act, and of the Exchange Act; (B) a copy of the most recent annual or quarterly report of the Company; and (C) such other reports and documents as the Investor may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any of the Shares without registration; and

(iii)       to take such further action as the Investor may reasonably request, all to the extent required from time to time to enable the Investor to sell Shares without registration under the Securities Act.

3.11       Exchange Rights. The Investor shall have the right from time to time to exchange any of the shares of Class A Common Stock acquired by the Investor hereunder for Class C Common Stock in order to reduce its ownership of voting common stock to less than 4.99% of the then outstanding shares of Class A Common Stock. Any shares of Class C Common Stock received by the Investor or any Affiliate of the Investor pursuant to this Section 3.11 shall not be convertible by the Investor into shares of Class A Common Stock or any other voting security of the Company, and any such shares shall be subject to the restrictions set forth in the provisions of the Company’s certificate of incorporation relating to the Class C Common Stock.

24

ARTICLE 4.

TERMINATION

4.1         Termination. This Agreement may be terminated prior to the Closing:

(a)          by mutual written agreement of the Company and the Investor;

(b)        by either Party, upon written notice to the other Party in the event that the Closing does not occur on or before September 1, 2021; provided, however, that the right to terminate this Agreement pursuant to this Section 4.1(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;

(c)         by either Party, upon written notice to the other Party, (i) in the event that Stockholder Approval is required under applicable Law or the rules and regulations of the Nasdaq Stock Market, but has not been obtained on or prior to the closing date of the Merger or (ii) the Authorized Shares Increase Approval has not been obtained on or prior to the closing date of the Merger; provided, however, that the right to terminate this Agreement pursuant to this Section 4.1(c) shall not be available to any Party whose failure to fulfill any obligation under this Agreement shall have been the proximate cause of the failure of the Closing to occur on or prior to such date;

(d)         by the Investor, upon written notice to the Company, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Company in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(ii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in the absence of such breach or condition; provided that this Section 4.1(d) shall only apply if the Investor is not in material breach of any of the terms of this Agreement;

(e)          by the Company, upon written notice to the Investor, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Investor in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(iii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in absence of such breach or condition; provided that this Section 4.1(e) shall only apply if the Company is not in material breach of any of the terms of this Agreement; or

(f)        by any Party, upon written notice to the other Party, in the event that any Governmental Entity shall have issued any order, decree or injunction or taken any other action restraining, enjoining or prohibiting any of the transactions contemplated by this Agreement, and such order, decree, injunction or other action shall have become final and non-appealable.

4.2         Effects

        of Termination. In the event of any termination of this Agreement as provided in Section 4.1, this Agreement \(other than Section 3.4, this Article 4 and Article 6 of this Agreement, which
    shall remain in full force and effect\) shall forthwith become wholly void and of no further force and effect; provided, that nothing herein shall relieve any Party from liability for fraud or willful breach of this Agreement.

25

ARTICLE 5.

INDEMNITY

5.1         Indemnification

        by the Company.

(a)          After the Closing, and subject to Sections 5.1(b), 5.3 and 5.4, the Company shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Investor and its Affiliates, and their respective successors and assigns, officers, directors, partners, members and employees, as applicable, (the “Investor Indemnified Parties”) against and from, and reimburse any of the Investor Indemnified Parties for, all Losses that any of the Investor Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Company in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by the Company to perform any of its covenants or agreements contained in this Agreement.  Notwithstanding anything herein to the contrary, the obligations of the Company under this Section 5.1(a) shall not be applicable to or inure to the benefit of any transferee of the Common Stock sold pursuant to this Agreement who is not an Affiliate of the Investor.

(b)         Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless any of the Investor Indemnified Parties against, or reimburse any of the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) (other than Losses arising out of the inaccuracy or breach of any Company Specified Representations) until the aggregate amount of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a) exceeds $100,000 (the “Threshold Amount”), upon the occurrence of which the Company shall be obligated for all of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a).  Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless the Investor Indemnified Parties against, or reimburse the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1.

(c)         For purposes of Section 5.1(a), in determining whether there has been a breach of a representation or warranty, the Parties hereto shall ignore any “materiality,” “Material Adverse Effect” or similar qualifications.

26

5.2        Indemnification by the Investor.

(a)         After the Closing, and subject to Sections 5.2(b), 5.3 and 5.4, the Investor shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Company and its respective Affiliates and their respective successors and assigns, officers, directors, partners, members, employees, representatives and agents (collectively, the “Company Indemnified Parties”) against and from, and reimburse any of the Company Indemnified Parties for, all Losses that the Company Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Investor in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by such Investor to perform any of its covenants or agreements contained in this Agreement.

(b)          Notwithstanding anything to the contrary contained herein, the Investor shall not be required to indemnify, defend or hold harmless any of the Company Indemnified Parties against, or reimburse any of the Company Indemnified Parties for any Losses pursuant to Section 5.2(a)(1) until the aggregate amount of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a) exceeds the Threshold Amount, upon the occurrence of which the Investor shall be obligated for all of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a)(1).  Notwithstanding anything to the contrary contained herein, the Investor shall not be required to indemnify, defend or hold harmless the Company Indemnified Parties against, or reimburse the Company Indemnified Parties for, any Losses pursuant to Section 5.2(a)(1) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1 hereof.

(c)          For purposes of Section 5.2(a), in determining whether there has been a breach of a representation or warranty, the Parties shall ignore any “materiality” or similar qualifications.

5.3         Notification

        of Claims.

(a)         Any Person that may be entitled to be indemnified under this Article 5 (the “Indemnified Party”) shall promptly notify the party or parties liable for such indemnification (the “Indemnifying Party”) in writing of any claim in respect of which indemnity may be sought hereunder, including any pending or threatened claim or demand by a third party that the Indemnified Party has determined has given or could reasonably give rise to a right of indemnification under this Agreement (including a pending or threatened claim or demand asserted by a third party against the Indemnified Party) (each, a “Third Party Claim”), describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or demand; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Agreement except to the extent that the Indemnifying Party is materially prejudiced by such failure.  The Parties agree that notices for claims in respect of a breach of a representation, warranty, covenant or agreement must be delivered prior to the expiration of any applicable survival period specified in Section 6.1 for such representation, warranty, covenant or agreement; provided, that if, prior to such applicable date, a Party hereto shall have notified the other Party hereto in accordance with the requirements of this Section 5.3(a) of a claim for indemnification under this Agreement (whether or not formal legal action shall have been commenced based upon such claim), such claim shall continue to be subject to indemnification in accordance with this Agreement notwithstanding the passing of such applicable date.

27

(b)         Upon receipt of a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) in respect of a Third Party Claim, the Indemnifying Party may, by notice to the Indemnified Party delivered within twenty (20) Business Days of the receipt of notice of such Third Party Claim, assume the defense and control of any Third Party Claim, with its own counsel reasonably acceptable to the Indemnified Party and at its own expense.  The Indemnified Party shall have the right to employ counsel on its own behalf for, and otherwise participate in the defense of, any such Third Party Claim, but the fees and expenses of its counsel will be at its own expense unless (A) the employment of counsel by the Indemnified Party at the Indemnifying Party’s expense has been authorized in writing by the Indemnifying Party, (B) the Indemnified Party reasonably believes there may be a conflict of interest between the Indemnified Party and the Indemnifying Party in the conduct of the defense of such Third Party Claim, (C) the Indemnified Party reasonably believes there are legal defenses available to it that are different from, additional to or inconsistent with those available to the Indemnifying Party, or (D) the Indemnifying Party has not in fact employed counsel to assume the defense of such Third Party Claim within a reasonable time after receipt of notice of the commencement of such Third Party Claim, in each of which cases the fees and expenses of such Indemnified Party’s counsel shall be at the expense of the Indemnifying Party; provided, however, that in the event that the Company is required to assume the fees and expenses of such Investor Indemnified Party’s counsel in accordance with the foregoing and such Investor Indemnified Party is similarly situated with any other “Investor Indemnified Party” under any of the other stock purchase agreements with respect to any Third Party Claim, and does not have any conflict of interest with such Person in the conduct of the defense of such Third Party Claim or have legal defenses available to it that are different from, additional to or inconsistent with those available to such Person, such Investor Indemnified Party shall be required to employ the same counsel as such Person and the Company shall be responsible for the fees and expenses of only one such counsel for such Investor Indemnified Party and such other Person or Persons (assuming any of clauses (A) through (D) above is satisfied).  The Indemnified Party may take any actions reasonably necessary to defend such Third Party Claim prior to the time that it receives a notice from the Indemnifying Party as contemplated by the immediately preceding sentence.  The Indemnified Party shall, and shall cause each of its Affiliates and representatives to, use reasonable best efforts to cooperate with the Indemnifying Party in the defense of any Third Party Claim.  The Indemnifying Party shall not, without the prior written consent of the Indemnified Party (which shall not be unreasonably withheld or delayed), consent to a settlement, compromise or discharge of, or the entry of any judgment arising from, any Third Party Claim, unless such settlement, compromise, discharge or entry of any judgment does not involve any statement, finding or admission of any fault, culpability, failure to act, violation of Law or admission of any wrongdoing by or on behalf of the Indemnified Party, and the Indemnifying Party shall (i) pay or cause to be paid all amounts arising out of such settlement or judgment concurrently with the effectiveness of such settlement or judgment (unless otherwise provided in such judgment), (ii) not encumber any of the assets of any Indemnified Party or agree to any restriction or condition that would apply to or materially adversely affect any Indemnified Party or the conduct of any Indemnified Party’s business and (iii) obtain, as a condition of any settlement, compromise, discharge, entry of judgment (if applicable), or other resolution, a complete and unconditional release of each Indemnified Party in form and substance reasonably satisfactory to such Indemnified Party from any and all liabilities in respect of such Third Party Claim.  An Indemnified Party shall not settle, compromise or consent to the entry of any judgment with respect to any claim or demand for which it is seeking indemnification from the Indemnifying Party or admit to any liability with respect to such claim or demand without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed); provided, that such consent shall not be required if the Indemnifying Party has not fulfilled any material obligations under this Section 5.3(b).

28

(c)         In the event any Indemnifying Party receives a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) that does not involve a Third Party Claim, the Indemnifying Party shall notify the Indemnified Party within twenty (20) Business Days following its receipt of such notice whether the Indemnifying Party disputes its liability to the Indemnified Party under this Agreement.  The Indemnified Party shall reasonably cooperate with and assist the Indemnifying Party in determining the validity of any such claim for indemnity by the Indemnified Party.

5.4         Indemnification

        Payment. In the event a claim or any Action for indemnification hereunder has been finally determined, the amount of such final determination shall be
    paid by the Indemnifying Party to the Indemnified Party on demand in immediately available funds.  A claim or an Action, and the liability for and amount of damages therefor, shall be deemed to be “finally determined” for purposes of this
    Agreement when the Parties have so determined by mutual agreement or, if disputed, when a final non-appealable judicial order has been entered into with respect to such claim or Action.

5.5       Exclusive

        Remedies. Subject to Section 6.14, each Party acknowledges and agrees that following the Closing, the indemnification provisions hereunder shall be the
    sole and exclusive remedies of the Parties for any breach of the representations, warranties or covenants contained in this Agreement.  No investigation of the Company by the Investor, or of the Investor by the Company, whether prior to or after
    the date of this Agreement, shall limit any Indemnified Party’s exercise of any right hereunder or be deemed to be a waiver of any such right.  The Parties agree that any indemnification payment made pursuant to this Agreement shall be treated as
    an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

ARTICLE 6.

MISCELLANEOUS

6.1         Survival. The representations and warranties of the Parties contained in this Agreement shall survive in full force and effect until the date that is fifteen (15) months after the Closing Date (or until final resolution of any claim or action arising from the breach of any such representation and warranty, if notice of such breach was provided prior to the end of such period), at which time they shall terminate and no claims shall be made for indemnification under Section 5.1 or Section 5.2, as applicable, for breaches of representations or warranties thereafter, except the Company Specified Representations (other than the representations and warranties made in Section 2.2(v), which shall survive until the expiration of the applicable statute of limitations) and the Investor Specified Representations shall survive the Closing indefinitely.  The covenants and agreements set forth in this Agreement shall survive until the expiration of any applicable statute of limitations or until performed or no longer operative in accordance with their respective terms.  Notwithstanding the foregoing, the Company Specified Representations shall survive for the period of the applicable statute of limitations.

29

6.2        Other Definitions. Wherever

    required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa, and references to any agreement, document or instrument shall be
    deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time.  In addition, the following terms shall have the meanings assigned to them below:

(a)        the term “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person provided that no security holder of the Company shall be deemed to be an Affiliate of any other security holder or of the Company or any of the Company Subsidiaries solely by reason of any investment in the Company and, for purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under 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 or policies of such Person, whether through the ownership of voting securities, by contract or otherwise;

(b)       the term “Agency” means the Federal Housing Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home Administration (now known as Rural Housing and Community Development Services), the Federal National Mortgage Association, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture or any other federal or state agency with authority to (i) determine any investment, origination, lending or servicing requirements with regard to mortgage loans originated, purchased or serviced by the Company or (ii) originate, purchase, or service mortgage loans, or otherwise promote mortgage lending, including state and local housing finance authorities;

(c)          the term “Board of Directors” means the Board of Directors of the Company;

(d)         the term “Business Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York or in the State of California generally are authorized or required by Law or other governmental actions to close;

(e)          the term “Capital Stock” means the capital stock or other applicable type of equity interest in a Person;

(f)           the term “Code” means the Internal Revenue Code of 1986, as amended;

(g)         the term “Company Specified Representations” means the representations and warranties made in Section 2.2(a), Section 2.2(b), Section 2.2(c), Section 2.2(d), Section 2.2(x), Section 2.2(z) and Section 2.2(hh);

30

(h)        the term “Disclosure Schedule” shall mean a schedule delivered, on or prior to the date of this Agreement, by (i) the Investor to the Company and (ii) the Company to the Investor setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in Section 2.2 with respect to the Company, or in Section 2.3 with respect to the Investor, or to one or more covenants contained in Article 3;

(i)          the term “GAAP” means United States generally accepted accounting principles and practices as in effect from time to time;

(j)          the term “Governmental Consent” means any notice to, registration, qualification, designation, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Entity, or the expiration or termination of any statutory waiting periods;

(k)      the term “Governmental Entity” means any court, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign, and any applicable industry self-regulatory organization or securities exchange;

(l)          the term “Insurer” means a Person who insures or guarantees for the benefit of the mortgagee all or any portion of the risk of loss upon borrower default on any of the mortgage loans originated, purchased or serviced by the Bank, including the Federal Housing Administration, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any private mortgage insurer, and providers of hazard, title or other insurance with respect to such mortgage loans or the related collateral;

(m)       the term “Investor Specified Representations” means the representations and warranties made in Section 2.3(b)(i), Section 2.3(d) and Section 2.3(f);

(n)        the term “Knowledge” of the Company and words of similar import mean the knowledge of any directors or executive officers of the Company listed on the Disclosure Schedule hereto;

(o)        the term “Loan Investor” means any Person (including an Agency) having a beneficial interest in any mortgage loan originated, purchased or serviced by the Bank or a security backed by or representing an interest in any such mortgage loan;

(p)        the term “Losses” means any and all losses, damages, reasonable costs, reasonable expenses (including reasonable attorneys’ fees and disbursements), liabilities, settlement payments, awards, judgments, fines, obligations, claims, and deficiencies of any kind, excluding special, consequential, exemplary and punitive damages;

(q)         the term “Person” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, Governmental Entity or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity;

31

(r)         the term “Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company or other entity (x) of which such Person or a Subsidiary of such Person is a general partner or (y) of which a majority of the voting securities or other voting interests, or 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;

(s)         the term “Tax” or “Taxes” means all United States federal, state, local or foreign income, profits, estimated, gross receipts, windfall profits, severance, property, intangible property, occupation, production, sales, use, license, excise, emergency excise, franchise, capital gains, capital stock, employment, withholding, transfer, stamp, payroll, goods and services, value added, alternative or add-on minimum tax, or any other tax, custom, duty or governmental fee, or other like assessment or charge of any kind whatsoever, together with any interest, penalties, fines, related liabilities or additions to tax that may become payable in respect thereof imposed by any Governmental Entity, whether or not disputed;

(t)          the term “Tax Return” means any return, declaration, report or similar statement required to be filed with respect to any Taxes (including any attached schedules), including, without limitation, any information return, claim or refund, amended return and declaration of estimated Tax;

(u)         the term “Voting Securities” means at any time shares of any class of Capital Stock of the Company, including but not limited to Voting Common Stock (or, after giving effect to the Merger Transactions, Class A Common Stock), and Voting Debt that are then entitled to vote generally in the election of directors;

(v)          the word “or” is not exclusive;

(w)        the words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”;

(x)        the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision; and

(y)        all article, section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit and schedule references not attributed to a particular document shall be references to such exhibits and schedules to this Agreement.

6.3        Amendment

        and Waivers.  The conditions to each Party’s obligation to consummate the Closing are for the sole benefit of such Party and may be waived by such Party in whole or in part to the extent
    permitted by Law.  No amendment or waiver of any provision of this Agreement will be effective against any Party unless it is in a writing signed by a duly authorized officer of such Party.

32

6.4        Counterparts and Facsimile. For the convenience of the Parties, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement.  Executed signature pages to this Agreement may be delivered by facsimile and such facsimiles shall be deemed as sufficient as if manually signed signature pages had been delivered.

6.5         Governing

        Law. This Agreement will be governed by and construed in accordance with the Laws of the State of California applicable to contracts made and to be performed entirely within such State.

6.6      WAIVER

        OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, INVESTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
    RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY WHETHER BASED ON CONTRACT, EQUITY, TORT OR ANY OTHER THEORY.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN BY INVESTOR, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL
    COUNSEL.

6.7         Notices. Any notice, request, instruction or other document to be given hereunder by any Party to the other will be in writing and will be deemed to have been duly given (a) on the date of delivery if delivered personally or by telecopy or facsimile, upon confirmation of receipt, (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid, provided that any such notice, request, instruction or other document to be given hereunder shall not be deemed to have been duly given unless and until it is sent via electronic mail to the recipient thereof.  All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice.

(a)          If to the Investor, to the address set forth on the Investor’s signature page to this Agreement.

(b)          If to the Company:

Broadway Financial Corporation

5055 Wilshire Boulevard, Suite 500

Los Angeles, California 90036

Attn: Brenda Battey,

Chief Financial Officer

Email: bbattey@broadwayfederalbank.com

with a copy (which copy shall not constitute notice) to:

Arnold & Porter LLP

777 South Figueroa Street,

44th Floor

Los Angeles, California 90017

Attn: James R. Walther, Esq.

Fax: (213) 243-4199

Email: James.Walther@arnoldporter.com

33

6.8     Entire Agreement. This Agreement constitutes the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, inducements or conditions, both written and oral, among the Parties, with respect to the subject matter hereof and thereof.

6.9         Successors

        and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns, including any
    purchasers of the Common Stock to be issued pursuant to this Agreement.  The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor.  The Investor may assign some or all of
    its rights hereunder or thereunder without the consent of the Company to any Affiliate of the Investor, and such assignee shall be deemed to be an Investor hereunder with respect to such assigned rights and shall be bound by the terms and
    conditions of this Agreement that apply to the Investor.

6.10      Captions. The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.

6.11      Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon 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.

6.12       Third

        Party Beneficiaries. Nothing contained in this Agreement, expressed or implied, is intended to confer upon any Person other than the Parties, any
    benefit right or remedies, except that the Placement Agents may rely on the representations and warranties contained herein to the same extent as if they were party to this Agreement and the provisions of Sections 5.1 and 5.2 shall inure to the
    benefit of the Persons referred to in such Sections.

6.13     Public

        Announcements. The Investor will not make \(and will use its reasonable best efforts to ensure that its Affiliates and representatives do not make\) any
    news release or public disclosure with respect to this Agreement and any of the transactions contemplated hereby, without first consulting with the Company and, in each case, also receiving the Company’s consent \(which shall not be unreasonably
    withheld, conditioned or delayed\).

34

6.14        Specific Performance. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms.  It is accordingly agreed that the Parties shall be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity.

6.15       No Recourse to Other Persons. This Agreement may only be enforced against the named Parties.  All claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may be made only against the entities that are expressly identified as Parties or that are subject to the terms hereof, and no past, present or future director, officer, employee, incorporator, member, manager, partner, stockholder, Affiliate, agent, attorney or representative of any Party (including any person negotiating or executing this Agreement on behalf of a Party) shall have any liability or obligation with respect to this Agreement or with respect to any claim or cause of action, whether in tort, contract or otherwise, that may arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement and the transactions contemplated hereby.

[signature page follows]

35

IN WITNESS WHEREOF, the Parties 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:
Name: Wayne-Kent A. Bradshaw
Title: President and Chief Executive Officer

[Stock Purchase Agreement]

TEXAS CAPITAL COMMUNITY<br><br> <br>DEVELOPMENT CORPORATION
By:
Name:
Title:
Address for notices:

[Stock Purchase Agreement]

STRICTLY CONFIDENTIAL

Execution Version

Exhibit 10.32

STOCK PURCHASE AGREEMENT

BY AND BETWEEN

BROADWAY FINANCIAL CORPORATION

AND

J.P. MORGAN CHASE COMMUNITY DEVELOPMENT CORPORATION

February 20, 2021

TABLE OF CONTENTS

Page
ARTICLE 1. PURCHASE; CLOSING 2
1.1 Issuance, Sale and Purchase 2
1.2 Closing; Deliverables for the Closing; Conditions to the Closing 2
ARTICLE 2. REPRESENTATIONS AND WARRANTIES 5
2.1 Certain Terms 5
2.2 Representations and Warranties of the Company 6
2.3 Representations and Warranties of the Investor 21
ARTICLE 3. COVENANTS 23
3.1 Conduct of Business Prior to Closing 23
3.2 Use of Proceeds 23
3.3 Regulatory Filings 23
3.4 Confidentiality 23
3.5 Publicity 24
3.6 Commercially Reasonable Efforts 24
3.7 Legend. 24
3.8 Exchange Listing 25
3.9 Authorized Shares 25
3.10 Rule 144 Reporting 25
3.11 Automatic Conversion 26
ARTICLE 4. TERMINATION 26
4.1 Termination 26
4.2 Effects of Termination 27
ARTICLE 5. INDEMNITY 27
5.1 Indemnification by the Company 27
5.2 Indemnification by the Investor 28
5.3 Notification of Claims 29
5.4 Indemnification Payment 30
5.5 Exclusive Remedies 31
ARTICLE 6. MISCELLANEOUS 31
6.1 Survival 31
6.2 Other Definitions 31

i

6.3 Amendment and Waivers 34
6.4 Counterparts and Facsimile 34
6.5 Governing Law 34
6.6 WAIVER OF JURY TRIAL 35
6.7 Notices 35
6.8 Entire Agreement 36
6.9 Successors and Assigns 36
6.10 Captions 36
6.11 Severability 36
6.12 Third Party Beneficiaries 37
6.13 Public Announcements 37
6.14 Specific Performance 37
6.15 No Recourse to Other Persons 37

INDEX OF DEFINED TERMS

Page
Action 9
Affiliate 31
Agency 32
Agreement 1
Anti-Corruption Laws 14
Authorized Shares Increase Approval 3
Bank 1
Bank Merger 1
Benefit Plans 16
Board of Directors 32
Business Day 32
Capital Stock 32
CDFI 6
CFB 1
CFB Sub 1
Class A Common Stock 1
Class B Common Stock 1
Class C Common Stock 1
Closing 2
Closing Date 2
Code 32
Common Stock 1

ii

Company 1
Company Employees 16
Company Financial Statements 10
Company Indemnified Parties 28
Company Insurance Policies 16
Company IT Assets 11
Company Reports 10
Company Specified Representations 32
Company Stock Plan 8
Company Subsidiaries 7
Company Subsidiary 7
Concurrent Other Transactions 1
control 31
controlled by 31
controlling 31
Disclosure Schedule 32
Disqualification Event 19
ERISA 16
ERISA Affiliate 17
Exchange Act 10
FDIC 7
Federal Reserve 6
GAAP 32
Governmental Authorizations 14
Governmental Consent 32
Governmental Entity 32
Indemnified Party 29
Indemnifying Party 29
Insider 20
Insurer 33
Intellectual Property Rights 16
Investment 1
Investor 1
Investor Indemnified Parties 27
Investor Specified Representations 33
Investor’s Rights Letter Agreement 1
Knowledge 33
Law 14
Liens 9
Loan Investor 33
Losses 33
Material Adverse Effect 5
Merger 1
Merger Agreement 1
Merger Transactions 1

iii

Multiemployer Plan 17
Non-Voting Common Stock 7
OFAC 13
Parties 1
Per Share Purchase Price 2
Person 33
Personal Information 12
Placement Agents 1
Preferred Stock 7
Previously Disclosed 6
Privacy Laws 12
Purchase Price 2
Registration Statement 21
Rule 506 19
Sanctioned Country 33
Sanctioned Person 33
Sanctions Laws 13
SEC 6
Securities Act 8
Shares 2
Stockholder Approval 3
Subsidiary 33
Surviving Bank 1
Tax 34
Tax Return 34
Taxes 34
Third Party Claim 29
Threshold Amount 28
Transaction Agreements 1
under common control with 31
Voting Common Stock 7
Voting Debt 8
Voting Securities 34

iv

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Agreement”) is dated as of February 20, 2021, and is entered into by and among Broadway Financial Corporation, a Delaware corporation (the “Company”),

        and J.P. Morgan Chase Community Development Corporation, a Delaware Corporation \(the “Investor”, and together with the Company, the “Parties”\)

RECITALS

WHEREAS, the Company is a party to that certain Agreement and Plan of Merger (the “Merger Agreement”) with CFBanc Corporation, a District of Columbia public benefit corporation (“CFB”), which provides, among other things and subject to the terms and conditions of the Merger Agreement, for (i) the merger of CFB with and into the Company, with the Company continuing as the surviving entity in the Merger (the “Merger”), (ii) immediately

        following the Merger, Broadway Federal Bank, f.s.b., a wholly owned subsidiary of the Company
      \(the “Bank”\), will merge with and into City First Bank of D.C., National Association \(“CFB Sub”\), a wholly owned subsidiary of CFB \(the “Bank Merger” and together with the Merger and the other transactions contemplated by the Merger Agreement, the “Merger Transactions”\), with CFB Sub continuing as the surviving entity \(the “Surviving Bank”\),
      and \(iii\) the Company’s voting common stock, par value $0.01 per share, will be renamed Class A Common Stock \(“Class A Common Stock”\), a new class of non-voting common stock of the Company, par value
      $0.01 per share, will be created which will be named Class B Common Stock \(“Class B Common Stock”\) and the Company’s currently authorized non-voting common stock, par value $0.01 per share, will be
      renamed Class C Common Stock \(the “Class C Common Stock” and collectively, the “Common Stock” \);

WHEREAS, the Company has engaged Raymond James & Associates, Inc. and Keefe, Bruyette & Woods, Inc. as co-placement agents (the “Placement Agents”) for the offering of the Common Stock.

WHEREAS, the Company desires to issue and sell to the Investor, and the Investor desires to purchase from the Company, on the terms and conditions described herein, shares of Class C Common Stock at the Per Share Purchase Price specified herein (the “Investment”);

WHEREAS, the Investment is proposed to be made subject to completion of the Merger Transactions;

WHEREAS, it is proposed that the Company and the Investor enter into that certain investor’s rights letter agreement, dated as of the Closing Date, in substantially the same form as attached hereto as Exhibit A (the “Investor’s Rights Letter Agreement” and together with this Agreement and the Exchange Agreement referred to below, the Transaction Agreements”);

WHEREAS, the Investment is proposed to be made concurrently with the sale by the Company of shares of Class A Common Stock and Class C Common Stock at the Per Share Purchase Price via private placement to certain other investors set forth on Annex A attached hereto (the “Concurrent Other Transactions”); and

NOW, THEREFORE, in consideration of the premises, and of the respective representations, warranties, covenants and other agreements of the Parties set forth herein, the Parties hereby agree as follows:

ARTICLE 1.

PURCHASE; CLOSING

1.1        Issuance, Sale and Purchase.  On the terms and subject to the conditions set forth herein, the Company agrees to issue and sell to the Investor, and the Investor agrees to purchase from the Company, free and clear of any Liens, 5,056,179 shares of Class C Common Stock (the “Shares”), which will (together with shares of Class C Common Stock received by the Investor pursuant to the Exchange Agreement, by and between the Company and the Investor, to be entered into following the closing of the Merger Transaction) represent approximately 8.04% of the total outstanding shares of the Common Stock of the Company (excluding outstanding restricted stock awards) immediately following the Closing and the closing of the Concurrent Other Transactions, at a per share purchase price of $1.78 or, if lower, the same price paid by any other Person who acquires shares (or enters into any agreement to acquire shares) of Class A Common Stock or Class C Common Stock (or any other Voting Common Stock or Non-Voting Stock or common equivalent Preferred Stock) after the date hereof and prior to, or substantially contemporaneous with, the Closing (in either case, the “Per Share Purchase Price”), payable to the Company in immediately available funds at the Closing; provided, however, that in no event shall the Investor purchase a number of shares of Class C Common Stock that would result in the Investor owning more than 9.90% of the total number of shares of the Common Stock outstanding immediately following the Closing and the closing of the Concurrent Other Transactions.  The aggregate purchase price payable pursuant to this Section 1.1 is $8,999,998.62 and is referred to herein as the “Purchase Price”).

1.2         Closing; Deliverables for the Closing; Conditions to the Closing.

(a)        Closing.  Unless this Agreement has been terminated pursuant to Article 4, and subject to the satisfaction or, to the extent permitted by Law and this Agreement, the written waiver of the conditions set forth in Section 1.2(c), the closing of the transaction contemplated by this Agreement (the “Closing”) shall take place remotely via the electronic or other exchange of documents and signature pages, at 9:00 a.m. Pacific Time on the second Business Day after the satisfaction or, if permissible, waiver of the conditions set forth in Section 1.2(c) (other than those which by their nature are to be satisfied at Closing, but subject to the satisfaction or waiver of such conditions), or at such other place or such other date as may be agreed to by the Parties (the “Closing Date”).

(b)          Closing Deliverables.  Subject to the satisfaction or permitted waiver of the conditions to the Closing set forth in Section 1.2(c), at the Closing the Parties shall make the following deliveries:

(i)          the Company shall deliver to the Investor one or more certificates evidencing the Shares registered in the name of the Investor (or if the Shares are to be uncertificated, the Company shall deliver a receipt or similar record confirming that the Shares are registered in the name of the Investor);

2

(ii)       the Company shall deliver to the Investor a schedule setting forth the aggregate number of shares of each class of Capital Stock outstanding immediately after giving effect to the Merger Transactions, the Concurrent Other Transactions and the transactions contemplated hereby;

(iii)        at or prior to the Closing, the Investor shall deliver the Purchase Price to the Company, by wire transfer of immediately available funds to the account set forth in a written notice by the Company delivered to the Investor at least three Business Days prior to the Closing.

(c)          Closing Conditions.

(i)         The obligations of the Investor, on the one hand, and the Company, on the other hand, to consummate the purchase and sale of the Shares provided for in this Agreement are each subject to the satisfaction or, to the extent permitted by Law and this Agreement, the waiver by the Company or the Investor, as applicable, of the following conditions to the Closing under this Agreement:

(A)          All Governmental Consents required to have been obtained at or prior to the Closing Date in connection with the execution, delivery or performance of this Agreement and the consummation of the transactions contemplated hereby shall have been obtained and shall be in full force and effect;

(B)           The Merger Transactions shall have been consummated in accordance with the Merger Agreement, including the approval of the Merger Agreement by the stockholders of each of the Company and CFB; and

(C)          If required under applicable Law or the rules and regulations of the Nasdaq Stock Market, the approval by stockholders of the Company of resolutions providing for the Company’s issuance of the maximum number of shares of Common Stock to be issued under this Agreement in accordance with this Agreement and in the Concurrent Other Transactions, the definitive documentation relating to the Concurrent Other Transactions, and applicable Law and the rules and regulations of the Nasdaq Stock Market (such approval being referred to herein as the “Stockholder Approval”) shall have been obtained.

(D)          Approval by the stockholders of the Company to increase in the authorized number of shares of Voting Common Stock (which will become Class A Common Stock upon completion of the Merger) from 50,000,000 shares to 75,000,000 shares, to be effected by the filing of an amended and restated certificate of incorporation of the Company (the “Authorized Shares Increase Approval”), shall have been obtained.

(ii)         The obligation of the Investor to consummate the purchase of Shares provided for in this Agreement is also subject to the satisfaction or waiver by the Investor of the following conditions to the Closing:

3

(A)          (i) The Company Specified Representations shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date and (ii) the other representations and warranties of the Company set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except, in the case of this clause (ii) only, to the extent that the failure to be true and correct (without regard to any materiality or Material Adverse Effect qualifications contained therein), would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and except, in the case of clauses (i) and (ii), that representations and warranties made as of a specified date shall be true and correct as of such date;

(B)          The Company shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date;

(C)         The Investor shall have received a certificate, dated as of the Closing Date, signed on behalf of the Company by a senior executive officer certifying to the effect that the conditions set forth in Section 1.2(c)(ii)(A), Section 1.2(c)(ii)(B) and Section 1.2(c)(ii)(F) have been satisfied on and as of the Closing Date;

(D)        The Investor shall have received a certificate, dated as of the Closing Date, signed by the Secretary of the Company certifying (i) the bylaws of the Company and (ii) resolutions of the board of directors of the Company approving the Transaction Agreements and the transactions contemplated under the Transaction Agreements;

(E)           The Company shall have executed and delivered a counterpart signature page to the Investor’s Rights Letter Agreement in substantially the form attached hereto as Exhibit A;

(F)           The Investor shall have received from Arnold & Porter Kaye Scholer LLP, counsel for the Company, an opinion, dated as of the Closing Date, in substantially the form of Exhibit B attached hereto;

(G)          Since the date of this Agreement, no Material Adverse Effect shall have occurred and no change or other event shall have occurred that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and

(H)          The Company shall have executed and delivered the Exchange Agreement in the form attached hereto as Exhibit C and the Closing (as defined therein) shall have occurred prior to the Closing.

(iii)          The obligation of the Company to consummate the sale of the Shares provided for in this Agreement is also subject to the satisfaction or written waiver by the Company of the following conditions to the Closing:

4

(A)          The representations and warranties of the Investor set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except to the extent that the failure to be true and correct (without regard to any materiality qualifications contained therein) would not materially adversely affect the ability of the Investor to perform its obligations hereunder and except that (1) representations and warranties made as of a specified date shall be true and correct as of such date and (2) the representations and warranties of the Investor set forth in Section 2.3(c) 2.3(e) shall be true and correct in all respects; and

(B)          The Investor shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date.

ARTICLE 2.

REPRESENTATIONS AND WARRANTIES

2.1         Certain Terms.

(a)         As used in this Agreement, the term “Material Adverse Effect” means any circumstance, event, change, development or effect that, individually or in the aggregate, would reasonably be expected to (i) result in a material adverse effect on the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole, or (ii) materially impair or delay the ability of the Company or any of the Company Subsidiaries to perform its or their obligations under this Agreement to consummate the Closing or any of the transactions contemplated hereby; provided, however, that in determining whether a Material Adverse Effect has occurred under clause (i), there shall be excluded any circumstance, event, change, development or effect to the extent resulting from (A) actions or omissions of the Company or any Company Subsidiary expressly required or contemplated by the terms of this Agreement, (B) changes after the date hereof in general economic conditions in the United States, including financial market volatility or downturns, or in the markets in which the Company and the Company Subsidiaries operate, (C) changes after the date hereof affecting the banking industry generally, (D) any changes after the date hereof in applicable Laws or accounting rules or principles, including changes in GAAP, (E) changes in the market price or trading volume of the Common Stock or the Company’s other outstanding securities (but not the underlying causes of such changes), (F) any epidemic, pandemic or disease outbreak (including the Covid-19 virus) including any worsening of such conditions; or (G) any failure by the Company or any of the Company Subsidiaries to meet any internal projections or forecasts with regard to the assets, liabilities, business, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole (but not the underlying causes of such failure), in each case to the extent that such circumstance, event, change, development or effect referred to in clauses (B), (C) and (D) do not have a disproportionate effect on the Company and the Company Subsidiaries compared to other participants in the industries or markets in which the Company and the Company Subsidiaries operate.

5

(b)         As used in this Agreement, the term “Previously Disclosed” (i) with regard to any Party, means information set forth in its Disclosure Schedule under Section references corresponding with the provision of Section 2.2 to which such information relates (including, in the case of the Company, information identified in the Company’s Disclosure Schedule) provided, however, that if such information is disclosed in such a way as to make its applicability to another provision of Section 2.2 reasonably apparent on its face, such information shall be deemed to be responsive to such other provision of this Agreement and (ii) with regard to the Company, includes information publicly disclosed by the Company in any reports, schedules, forms, statements and other documents filed or furnished by the Company under the Securities Act and the Exchange Act with the Securities and Exchange Commission (the “SEC”), including pursuant to Section 13(a) or 15(d) thereof, since December 31, 2017, in each case available on the SEC’s Electronic Data Gathering, Analysis and Retrieval system prior to the date of this Agreement (excluding any risk factor disclosures contained in such documents under the heading “Risk Factors” and any disclosure of risks included in any “forward-looking statements” disclaimer or other statements that are similarly non-specific and are predictive or forward-looking in nature). Notwithstanding anything in this Agreement to the contrary, the mere inclusion of an item in a Disclosure Schedule shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

2.2         Representations and Warranties of the Company.  Except as Previously Disclosed, the Company hereby represents and warrants to the Investor, as of the date of this Agreement and, after giving effect to the Merger Transactions, as of the Closing Date (except for the representations and warranties that are as of a specific date, which are made as of that date) that:

(a)          Organization and Authority.  Each of the Company and the Company Subsidiaries is a corporation or other entity duly organized and validly existing under the laws of the jurisdiction of its incorporation or organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, except where any failure to be so qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and has the corporate or other organizational power and authority to own its properties and assets and to carry on its business as it is now being conducted.  The Company has Previously Disclosed correct and complete copies of the certificate of incorporation and bylaws (or similar governing documents) as amended through the date of this Agreement for the Company and the Bank.  The Company is duly registered with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) as a savings and loan holding company under the Savings and Loan Holding Company Act, as amended, 12 U.S.C. 1467a.  As of the date hereof, the Company is a certified “community development financial institution” designated as such under the Community Development Banking and Financial Institutions Act of 1994, as amended (12 U.S.C. Sections 5311 et seq.) and its implementing regulations, as applicable (a “CDFI”).  Following the consummation of the Bank Merger, the Surviving Bank will apply to be designated as a CDFI.

6

(b)         Company Subsidiaries.  As of the date of this Agreement, the Company has Previously Disclosed a true, complete and correct list of each entity in which the Company, directly or indirectly, owns sufficient capital stock or holds a sufficient equity or similar interest such that it is consolidated with the Company in the financial statements of the Company or has the power to elect a majority of the board of directors or other persons performing similar functions (each, a “Company Subsidiary” and, collectively, the “Company Subsidiaries”).

      Each of the Company Subsidiaries is set forth in the Disclosure Schedule. Except for the Company Subsidiaries, and as set forth in the Disclosure Schedule, the Company does not own beneficially or control, directly or indirectly, equity
      securities or similar interests of any corporation, bank, business trust, association or similar organization, and is not, directly or indirectly, a partner in any general partnership or party to any joint venture or similar arrangement.  The
      Company owns, directly or indirectly, all of its interests in each Company Subsidiary free and clear of any and all Liens.  No equity security of any Company Subsidiary is or may be required to be issued by reason of any option, warrant, scrip,
      preemptive right, right to subscribe to, gross-up right, call or commitment of any character whatsoever relating to, or security or right convertible into, shares of any capital stock or other interest of such Company Subsidiary, and there are no
      contracts, commitments, understandings or arrangements by which any Company Subsidiary is bound to issue additional shares of its capital stock or other interest, or any option, warrant or right to purchase or acquire any additional shares of its
      capital stock.  The deposit accounts of the Bank are insured by the Federal Deposit Insurance Corporation \(“FDIC”\) to the fullest extent permitted by the Federal Deposit Insurance Act, as amended,
      and the rules and regulations of the FDIC thereunder, and all premiums and assessments required to be paid in connection therewith have been paid when due \(after giving effect to any applicable extensions\). The Company beneficially owns all of
      the outstanding capital securities of, and has sole control of, the Bank. As of the date of this Agreement, the Bank is duly qualified as a “minority depository institution” \(as defined in Section 308 of the Financial Institutions Reform,
      Recovery and Enforcement Act of 1989\). Upon the consummation of the Merger Transactions, the Surviving Bank shall be deemed a Company Subsidiary and the Surviving Bank shall apply to be qualified as a “minority depository institution”.

(c)          Capitalization.

(i)         Except as set forth on the Disclosure Schedule, as of the date hereof, the authorized Capital Stock of the Company consists of 50,000,000 shares of Voting Common Stock, par value $0.01 per share (“Voting Common Stock”), 25,000,000 shares of Non-Voting Common Stock, par value $0.01 (“Non-Voting Common Stock”), and 1,000,000 shares of preferred stock, par value $0.01 (“Preferred Stock”).  After giving effect to the amendment of  the certificate of incorporation of the Company pursuant to the Authorized Share Increase Approval (assuming such approval is obtained) and the Merger, the authorized Capital Stock of the Company shall consist of 75,000,000 shares of Class A Common Stock, 15,000,000 shares of Class B Common Stock, 25,000,000 shares of Class C Common Stock and 1,000,000 shares of serial Preferred Stock, par value $0.01 per share.

(ii)        As of the date hereof, before giving effect to the transaction provided for herein, the Merger Transactions and the Concurrent Other Transactions the Company has issued and outstanding: (i) 19,281,758 of shares of Voting Common Stock, including 556,169 shares of Voting Common Stock granted in respect of outstanding restricted stock awards, (ii) 1,637,902 shares of Voting Common Stock held by the trust for the Broadway Federal Bank, f.s.b. Employee Stock Ownership Plan, and (iii) 8,756,396 shares of Non-Voting Common Stock.  No shares of Preferred Stock are outstanding as of the date hereof.

7

(iii)        As of the date hereof, other than in respect of awards outstanding under or issuable pursuant to the Company’s 2008 Long-Term Incentive Plan (the “Company

          Stock Plan”\) consisting of options to purchase an aggregate of 450,000 shares of common stock, and except in connection with this Agreement and the transactions contemplated hereby, the Merger Agreement and the Concurrent Other
      Transactions, the Company has not \(A\) agreed to issue or authorized the issuance after the date hereof of any shares of Common Stock or Preferred Stock, or any securities convertible into or exchangeable or exercisable for shares of Common Stock
      or Preferred Stock, \(B\) reserved for issuance any shares of Capital Stock of the Company or \(C\) repurchased or redeemed, or agreed to or authorized the repurchase or redemption of, any shares of Capital Stock of the Company.

(iv)       All of the issued and outstanding shares of Capital Stock of the Company have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, except for the preemptive rights granted to certain institutional stockholders of the Company identified on Schedule 2.2(c)(iv) of the Disclosure Schedule, which have been duly waived with respect to the Investment in accordance with the agreements specified on Schedule 2.2(c)(iv) of the Disclosure Schedule.  None of the outstanding shares of Capital Stock or other securities of the Company or any of the Company Subsidiaries was issued, sold or offered by the Company or any Company Subsidiary in violation of the Securities Act of 1933, as amended (the “Securities Act”), or the securities or blue sky laws of any state or jurisdiction, or in violation of any agreement, arrangement or commitment to which the Company was or is a party or subject, or in violation of any preemptive or similar rights of any Person.  No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which the stockholders of the Company may vote (“Voting Debt”) are issued and outstanding.

(v)        As of the date of this Agreement, except for the outstanding awards under the Company Stock Plan, the Company does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of, or securities or rights convertible into or exchangeable or exercisable for, or any agreements with respect to the voting of any issued or unissued Capital Stock or Voting Debt of the Company (except for definitive documentation relating to the Concurrent Other Transactions or as Previously Disclosed).

(d)          Authorization; No Conflicts.

(i)         The Company has the corporate power and authority to execute and deliver the Transaction Agreements and to perform its obligations hereunder and thereunder.  The Board of Directors has approved the transactions contemplated by the Transaction Agreements, and, except for the Stockholder Approval and the Authorized Shares Increase Approval, no other corporate approvals are necessary in connection with the consummation by the Company of the transactions contemplated hereby and thereby.  This Agreement has been, and the Investor’s Rights Letter Agreement will be, when executed and delivered by the Company, duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery by the Investor, this Agreement is, and the Investor’s Rights Letter Agreement will be, the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles (whether applied in equity or at law).

8

(ii)         Neither the execution and delivery by the Company of the Transaction Agreements nor the consummation of the transactions contemplated hereby or thereby, nor compliance by the Company with any of the provisions hereof, will, with or without the passage of time and giving of notice, (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any liens, charges, adverse rights or claims, pledges, covenants, title defects, security interests or other encumbrances of any kind (“Liens”)

      upon any of the properties or assets of the Company or any Company Subsidiary, under any of the terms, conditions or provisions of \(1\) the certificate of incorporation or bylaws \(or similar governing documents\) of the Company and each Company
      Subsidiary or \(2\) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any of the Company Subsidiaries is a party or by which it may be bound, or to which the
      Company or any of the Company Subsidiaries, or any of the properties or assets of the Company or any of the Company Subsidiaries may be subject, or \(B\) violate any Law applicable to the Company or any of the Company Subsidiaries or any of their
      respective properties or assets except in the case of clauses \(A\)\(2\) and \(B\) for such violations, conflicts and breaches as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(e)          Governmental Consents.  Except as set forth in the Disclosure Schedule, no Governmental Consents are necessary for the execution and delivery of and performance of the Company under the Transaction Agreements for the sale by the Company of Common Stock to the Investor pursuant to this Agreement.

(f)          Third-Party Consents.  Except as set forth in the Disclosure Schedule, no consents, approvals, releases, and waivers from any third-party are required or necessary for the Company to consummate the transactions contemplated in the Transaction Agreements.

(g)        Litigation and Other Proceedings.  Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, or as would not reasonably be expected to adversely impact the reputation of the Company, the Company Subsidiaries or their respective investors in any material respect, there is no pending or, to the Knowledge of the Company, threatened claim, action, suit, arbitration, complaint, charge or investigation or proceeding (each an “Action”) against (i) the Company or any Company Subsidiary (including any of their respective assets, rights or properties) or (ii) the Company, any Company Subsidiary, or to the Company’s Knowledge, any officer or director of the Company or Company Subsidiary (arising out of their service or board relationship with the Company or such Company Subsidiary) as a party or named as subject to the provisions of any order, writ, injunction, settlement, judgment or decree of any court, arbitrator or government agency, or instrumentality (in the case of officers or directors, such as would affect the Company or the Company Subsidiaries).  There has not been, and to the Knowledge of the Company, there is not pending or contemplated, any investigation or other Action by the SEC involving the Company or any current or former director or officer of the Company in his or her capacity as such.

9

(h)          Financial Statements.  The audited consolidated balance sheets of the Company and the Company Subsidiaries and the related consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2019 and the unaudited consolidated balance sheets of the Company and the Company Subsidiaries and the related unaudited consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, included in the Company’s quarterly reports on Form 10-Q filed with the SEC for the quarterly period ending September 30, 2020 (the “Company Financial Statements”) (i) have been prepared from, and are in accordance with, the books and records of the Company and the Company Subsidiaries, (ii) complied, as of the date of such filing, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, (iii) have been prepared in accordance with GAAP applied on a consistent basis and (iv) present fairly in all material respects the consolidated financial position of the Company and the Company Subsidiaries at the dates and the consolidated results of operations, changes in stockholders’ equity and cash flows of the Company and the Company Subsidiaries for the periods stated therein.

(i)          Reports.  Since December 31, 2017, the Company and each Company Subsidiary have filed all material reports, registrations, documents, filings, statements and submissions, together with any required amendments thereto, that they were required to file with any Governmental Entity, including all those required under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof (the foregoing, collectively, being referred to herein as the “Company Reports”) and have paid all material fees and assessments due and payable in connection therewith.  As of their respective filing dates, or as subsequently amended prior to the date hereof, the Company Reports complied in all material respects with all statutes and applicable rules and regulations of the applicable Governmental Entities.  As of the date of this Agreement, there are no outstanding comments from the SEC or any other Governmental Entity with respect to any Company Report that were the subject of written correspondence that have not been resolved.  The Company Reports, including the documents incorporated by reference in each of them, each contained all the information required to be included in it and, when it was filed and, as of the date of each such Company Report filed with the SEC, or if amended prior to the date of this Agreement, as of the date of such amendment, did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in it, in light of the circumstances under which they were made, not misleading and complied as to form in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  No executive officer of the Company has failed in any respect to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002.

10

(j)        Internal Accounting and Disclosure Controls.  The records, systems, controls, data and information of the Company and the Company Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of the Company or the Company Subsidiaries (including all means of access thereto and therefrom) or reputable banking industry service providers, except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have an adverse effect on the system of internal accounting controls described below in this Section 2.2(j).  The Company (i) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) intended to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known to the chief executive officer and the chief financial officer of the Company by others within those entities, and (ii) has disclosed, based on its most recent evaluation prior to the date of this Agreement, to the Company’s outside auditors and the audit committee of the Board of Directors (A) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information, and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.  As of the date of this Agreement, the Company has no Knowledge of any reason that its outside auditors and its chief executive and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when due.  Since December 31, 2017, neither the Company nor any Company Subsidiary nor, to the Knowledge of the Company, any director, officer, employee, auditor, accountant or representative of the Company or any Company Subsidiary has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any Company Subsidiary or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any Company Subsidiary has engaged in questionable accounting or auditing practices.

(k)          Data Privacy.

(i)         The Company and the Company Subsidiaries have taken reasonable steps consistent with customary industry practices to protect the confidentiality, integrity, availability and security of the computers, servers, workstations, routers, hubs, switches, circuits, networks and other information technology equipment owned or controlled by them or by any third party and material to the Company and the Company Subsidiaries (the “Company IT Assets”) (and all information and transactions stored or contained therein or transmitted thereby) against any unauthorized use, access, interruption, modification or corruption, and there has been no unauthorized use, access, interruption, modification or corruption of the Company IT Assets.

11

(ii)        In connection with their receipt, purchase, collection, securing, safeguarding, storage, transfer (including any transfer across national borders), disclosure, destruction/disposal, and/or use or other processing of any Personal Information, each of the Company and the Company Subsidiaries, is and has been, in material compliance with all Privacy Laws, their respective privacy policies and the requirements of any contract or codes of conduct to which any of the Company or the Company Subsidiaries is a party.  The privacy policies of the Company are customary for the industry in which the Company operates.  The Company and the Company Subsidiaries have commercially reasonable and appropriate physical, technical, organizational, and administrative security measures and policies in place designed to protect all Personal Information collected by them or on their behalf from and against unauthorized access, use, interruption, modification, corruption, and/or disclosure.  The Company and the Company Subsidiaries have binding written agreements obligating (in accordance with and as required by Privacy Laws (as applicable)) all third parties collecting, accessing, receiving, storing or processing Personal Information on behalf of the Company and the Company Subsidiaries to (i) comply with all applicable Privacy Laws, (ii) take commercially reasonable and appropriate steps to protect and secure such Personal Information from and against unauthorized access, use interruption, modification, corruption, and/or disclosure which are no less stringent than those applied by the Company and the Company Subsidiaries and (iii) promptly notify the Company and the Company Subsidiaries of any unauthorized access, use interruption, modification, corruption, and/or disclosure of Personal Information or Company IT Assets processing Personal Information.  The Company and the Company Subsidiaries are, and since December 31, 2017, have been, in compliance in all material respects with all Privacy Laws and any other applicable Laws in all relevant jurisdictions relating to data loss, theft and breach of security notification obligations.  Since December 31, 2017, none of the Company or any of the Company Subsidiaries has experienced a material breach of its information technology systems or a data loss or theft as defined by the Laws in all relevant jurisdictions.  None of the Company or any of the Company Subsidiaries has been charged with, or received any notice of any claims of, the violation in any material respect of any Privacy Laws or any of their respective privacy policies.  The consummation of the transactions contemplated hereby will not breach or otherwise cause any violation of any Privacy Law.

(iii)        For the purposes of this Section 2.2(k):

(1)          “Personal Information” means, in addition to any definition provided by applicable law or by the Company and the Company Subsidiaries in any of their respective privacy policies, contracts, or other public-facing statements for any similar term (e.g., “personally identifiable information” or “PII”), all information identifying, regarding or capable of being associated with an individual person or device.  Personal Information may relate to any individual, including a current, prospective or former client (or a client’s customer or end user) or employee of any Person, and includes information in any form, including paper, electronic and other forms.

(2)          “Privacy Laws” means all applicable laws, legal requirements, and self-regulatory guidelines and principles relating to privacy, data security, and Personal Information and similar applicable consumer protection laws, including with respect to the receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security, disposal, destruction, disclosure or transfer of Personal Information and any and all applicable laws governing breach notification in connection with Personal Information.  As used in this Agreement, “Privacy Laws” shall include the California Consumer Privacy Act, General Data Protection Regulation and the rules and regulations promulgated thereunder, and applicable state laws.

(l)         No Undisclosed Liabilities.  There are no liabilities of the Company or any of the Company Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, except for (i) liabilities adequately reflected or reserved against in accordance with GAAP in the Company’s audited balance sheet as of December 31, 2019 or the Company’s unaudited balance sheet as of September 30, 2020 and (ii)  liabilities that have arisen in the ordinary and usual course of business and consistent with past practice since December 31, 2019 and that have not or would not reasonably be expected to be material to the Company and the Company Subsidiaries, taken as a whole.

12

(m)       Mortgage Lending.  The Company and each of the Company Subsidiaries have complied in all material respects with, and all documentation in connection with the origination, processing, underwriting and credit approval of any mortgage loan originated, purchased or serviced by the Company or any Company Subsidiary has satisfied, in all material respects (i) all Laws with respect to the origination, insuring, purchase, sale, servicing, or filing of claims in connection with mortgage loans, including all Laws relating to real estate settlement procedures, consumer credit protection, truth in lending laws, usury limitations, fair housing, transfers of servicing, collection practices, equal credit opportunity and adjustable rate mortgages, (ii) the responsibilities and obligations relating to mortgage loans set forth in any agreement between the Company and any Agency, Loan Investor or Insurer, (iii) the applicable rules, regulations, guidelines, handbooks and other requirements of any Agency, Loan Investor or Insurer and (iv) the terms and provisions of any mortgage or other collateral documents and other loan documents with respect to each mortgage loan.

(n)         Bank Secrecy Act; Anti-Money Laundering; OFAC; and Customer Information.  The Company, the Company Subsidiaries, their respective Affiliates, and, to the Knowledge of the Company, its or their respective officers, directors, employees and agents, are and have been operating in compliance, in all material respects, in connection with the business of the Company or any Company Subsidiary, with (i) the Bank Secrecy Act of 1970, as amended, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (also known as the USA PATRIOT Act), or any other applicable anti-money laundering or antiterrorist-financing statute or regulation (“AML Laws”), or (ii) any order or regulation issued by the Treasury’s Office of Foreign Assets Control (“OFAC”), or any other applicable international trade, economic sanctions, and export controls statute, rule or regulation (“Sanctions Laws”).  The Company and each of the Company Subsidiaries have adopted and implemented (i) an anti-money laundering program that contains customer identification verification procedures that comply with the USA PATRIOT Act and such anti-money laundering program meets the requirements in all material respects of Section 352 of the USA PATRIOT Act and the regulations thereunder to the extent applicable, and (ii) a sanctions compliance program related to compliance with Sanctions Laws.  The Company and each Company Subsidiary have complied in all respects with any requirements to file reports and other necessary documents as required by the USA PATRIOT Act and the regulations thereunder.  The Company represents that none of it, any Company Subsidiary or their respective Affiliates, and its and their respective directors, officers, employees and, to the Company’s Knowledge, agents is a Sanctioned Person.

13

(o)        Certain Payments.  Neither the Company nor any of the Company Subsidiaries or Affiliates, nor any directors, officers, nor to the Knowledge of the Company, employees (acting on behalf of the Company or any of the Company Subsidiaries) or any of their Affiliates or any other Person who to the Knowledge of the Company is acting on behalf of the Company or any of the Company Subsidiaries has directly or indirectly, in connection with the business of the Company or any of the Company Subsidiaries, (i) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment in violation of any applicable anti-bribery or anti-corruption laws (“Anti-Corruption Laws”), including the U.S. Foreign Corrupt Practices Act of 1977, as amended , to any Person, private or public, regardless of form, whether in money, property, or services or (ii) established or maintained any fund or asset with respect to the Company or any of the Company Subsidiaries that was required by Anti-Corruption Laws to have been recorded and was not recorded in the books and records of the Company or any of the Company Subsidiaries.  The Company and each of the Company Subsidiaries have adopted and implemented a compliance program related to compliance with Anti-Corruption Laws.  Neither the Company nor any Company Subsidiaries has conducted any internal investigation, made any voluntary, directed, or involuntary disclosure to any Governmental Entity, or received any audit report, written communication from a Governmental Entity, or whistleblower or other written complaint, involving alleged violations in any material respect of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any applicable Anti-Corruption Laws on the part of the Company, any of the Company Subsidiaries, or any Person acting on behalf of the Company or any of the Company Subsidiaries.

(p)         Absence of Certain Changes.  Since December 31, 2019 and except as Previously Disclosed or as required or contemplated by the terms of this Agreement, (i) the Company and the Company Subsidiaries have conducted their respective businesses in all material respects in the ordinary and usual course of business consistent with past practices, (ii) through (and including) the date of this Agreement, no fact, event, change, condition, development, circumstance or effect has occurred that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and (iii) no material default (or event which, with notice or lapse of time, or both, would constitute a material default) exists on the part of the Company or any Company Subsidiary in the due performance and observance of any term, covenant or condition of any agreement to which the Company or any Company Subsidiary is a party and which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(q)          Compliance with Laws.

(i)          The Company, each Company Subsidiary and each of their officers, agents, representatives and employees possesses, holds and have all material permits, licenses, franchises, authorizations, orders, consents, registrations, accreditations and approvals of, and have made all filings, applications and registrations with, Governmental Entities that are required in order to permit the Company and each Company Subsidiary to own or lease their properties and assets and to carry on their business as presently conducted and that are material to the business of the Company and each Company Subsidiary (collectively, the “Governmental

          Authorizations”\).  The Company and the Company Subsidiaries, and to the Company’s Knowledge, their respective officers, agents, representatives and employees, are not in default under any of such Governmental Authorizations, which
      default\(s\) would be, or be reasonably expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries \(taken as a whole\).  The Company and each Company Subsidiary have complied with and \(A\) are not, and
      since December 31, 2017, have not been, in default or violation in any respect of, \(B\) are not under investigation with respect to, and \(C\) have not been threatened to be charged with or given notice of any material violation of, any applicable
      material domestic \(federal, state or local\) or foreign law, statute, ordinance, license, rule, regulation, policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental Entity \(each, a “Law”\), other than such noncompliance, defaults or violations as would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries \(taken as a whole\).  No
      Governmental Entity has placed any material restriction on the business or properties of the Company or any of the Company Subsidiaries.  As of the date hereof, the Bank has a Community Reinvestment Act rating of “outstanding.”

14

(ii)         Except for normal examinations conducted by a Governmental Entity in the ordinary course of business of the Company and the Company Subsidiaries, (A) no Governmental Entity has initiated or has pending any proceeding or, to the Knowledge of the Company, investigation into the business or operations of the Company or any of the Company Subsidiaries since December 31, 2017, (B) there is no unresolved violation or exception by any Governmental Entity with respect to any report or statement relating to any examinations or inspections of the Company or any of the Company Subsidiaries, and (C) there have been no formal or informal inquiries by, or disagreements or disputes with, any Governmental Entity with respect to the business, operations, policies or procedures of the Company or any of the Company Subsidiaries since December 31, 2017, in each case of clauses (A) through (C), which would reasonably be expected, individually or in the aggregate, to be material to the Company and the Company Subsidiaries (taken as a whole).

(iii)        The Company and the Company Subsidiaries are not, and since December 31, 2017, have not been, in violation or default of any provisions of their respective certification of incorporation or bylaws (or similar governing documents).

(r)          Adequate Capitalization.  As of December 31, 2020, the Bank met or exceeded the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.  As of the Closing and after giving effect to this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions, the Bank meets or exceeds the standards necessary to be considered “adequately capitalized” under the FDIC’s regulatory framework for prompt corrective action.

(s)          Agreements with Regulatory Agencies.  The Company and the Company Subsidiaries (A) are not subject to any cease-and-desist or other similar order or enforcement action issued by, (B) are not a party to any written agreement, consent agreement or memorandum of understanding with, (C) are not a party to any commitment letter or similar undertaking to, and (D) are not subject to any capital directive by, and since December 31, 2019, neither the Company nor any of the Company Subsidiaries has adopted any board resolutions at the request of any Governmental Entity that currently restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its liquidity and funding policies and practices, its ability to pay dividends, its credit, risk management or compliance policies, its internal controls, its management or its operations or business, nor has the Company nor any of the Company Subsidiaries been advised since December 31, 2019 by any Governmental Entity that it is considering issuing, initiating, ordering, or requesting any of the same.

15

(t)         Insurance.  The Company and each of the Company Subsidiaries are presently insured, and have been insured for at least the past two years, for reasonable amounts with financially sound and reputable insurance companies against such risks as companies engaged in a similar business would, in accordance with good business practice, customarily be insured.  All of the policies, bonds and other arrangements providing for the foregoing (the “Company Insurance Policies”) are in full force and effect, the premiums due and payable thereon have been or will be timely paid through the Closing Date, and there is no material breach or default (and no condition exists or event has occurred that, with the giving of notice or lapse of time or both, would constitute such a material breach or default) by the Company or any of the Company Subsidiaries under any of the Company Insurance Policies or, to the Knowledge of the Company, by any other party to the Company Insurance Policies.  Neither the Company nor any of the Company Subsidiaries has received any written notice of cancellation or non-renewal of any Company Insurance Policy nor, to the Knowledge of the Company, is the termination of any such policies threatened in writing by the insurer, and there is no material claim for coverage by the Company, or any of the Company Subsidiaries, pending under any of such Company Insurance Policies as to which coverage has been denied or disputed by the underwriters of such Company Insurance Policies or in respect of which such underwriters have reserved their rights.

(u)         Title.  The Company and the Company Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and valid title to all material personal property owned by them, in each case free and clear of all Liens, except for Liens which do not materially affect the value of such property or do not interfere with the use made and proposed to be made of such property by the Company or any Company Subsidiary.  Any real property and facilities held under lease by the Company or the Company Subsidiaries are leased pursuant to valid, subsisting and enforceable leases with such exceptions that are not material and do not interfere with the use made and proposed to be made of such property and facilities by the Company or the Company Subsidiaries.

(v)         Intellectual

            Property.  The Company and the Company Subsidiaries own or possess adequate rights or licenses to use all trademarks, service marks
          and all applications and registrations therefor, trade names, patents, patent rights, copyrights, original works of authorship, inventions, trade secrets and other intellectual property rights \(collectively, “Intellectual Property Rights”\) used in their businesses as conducted on the date of this Agreement, except as would not reasonably be
        expected to have, individually or in the aggregate, a Material Adverse Effect.  To the Knowledge of the Company, no
          product or service of the Company or the Company Subsidiaries infringes the Intellectual Property Rights of
          others.

(w)        Employee Benefits.

(i)          Section 2.2(v) of the Disclosure Schedule sets forth a correct and complete list of each “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including, without limitation, multiemployer plans within the meaning of Section 3(37) of ERISA), and all stock purchase, stock option, severance, employment, change-in-control, fringe benefit, bonus, incentive, deferred compensation and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transactions contemplated by this Agreement or otherwise), whether formal or informal, oral or written, under which (A) any current or former employee or director of the Company or any of the Company Subsidiaries (the “Company Employees”) has any present or future right to benefits and which are contributed to, sponsored by or maintained by the Company or any of the Company Subsidiaries or (B) the Company or any Company Subsidiary has had or has any present or future liability. All such plans, agreements, programs, policies and arrangements are collectively referred herein to as the “Benefit Plans.”

16

(ii)         (A) each Benefit Plan has been established and administered in all material respects in accordance with its terms, and in compliance with the applicable provisions of ERISA, the Code and other Laws; (B) no “reportable event” (as such term is defined in Section 4043 of ERISA) that could reasonably be expected to result in material liability has occurred with respect to any Benefit Plan, and (C) no non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) has been engaged in by the Company or any Company Subsidiary with respect to any Benefit Plan that has or is expected to result in any material liability or “accumulated funding deficiency” (as such term is defined in Section 302 of ERISA and Section 412 of the Code (whether or not waived)).

(iii)        The Company and the Company Subsidiaries will be in compliance, as of the Closing Date, with Sections 111 and 302 of the Emergency Economic Stabilization Act of 2008, as amended by the U.S. American Recovery and Reinvestment Act of 2009, including all guidance issued thereunder by a Governmental Entity.

(iv)       None of the Company or any Company Subsidiary or any trade or business, whether or not incorporated (an “ERISA Affiliate”), all of which together with the Company or any Company Subsidiary would be deemed a “single employer” within the meaning of Section 4001 of ERISA, has, at any time during the last six years, contributed to or been obligated to contribute to any plan that is (i) subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code or (ii) a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA (a “Multiemployer Plan”) or a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA; and none of Company and the Company Subsidiaries nor any of their respective ERISA Affiliates has incurred any liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as those terms are defined in Part I of Subtitle E of Title IV of ERISA.

(v)         Neither the Company nor any Company Subsidiary has any material unfunded liabilities existing under or in connection with any Benefit Plan, and each such Benefit Plan has been established and administered in all respects in accordance with its terms, and in compliance with applicable law, except where failure to be in compliance would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.

(vi)        Neither the execution of the Transaction Agreements nor the consummation of the transactions contemplated hereby and thereby could (either alone or in conjunction with any other event) reasonably be expected to result in, cause the accelerated vesting, funding or delivery of, or increase the amount or value of, any payment or benefit to any employee, officer or director of the Company or any Company Subsidiary.

17

(x)          Taxes.  All material Tax Returns required to be filed by, or on behalf of, the Company or the Company Subsidiaries have been timely filed, or will be timely filed, in accordance with all Laws, and all such Tax Returns are, or will be at the time of filing, complete and correct in all material respects.  The Company and the Company Subsidiaries have timely paid all material Taxes due and payable (whether or not shown on such Tax Returns), or, where payment is not yet due, have made adequate financial statement provisions therefor in accordance with GAAP.  There are no Liens with respect to Taxes upon any of the assets or properties of either the Company or the Company Subsidiaries other than with respect to Taxes not yet due and payable.  As of the date of this Agreement, there are not pending or threatened in writing, any audits, examinations, investigations or other proceedings initiated by the Internal Revenue Service in respect of U.S. federal income tax matters.  Neither the Company nor any Company Subsidiary has received a written notice from a jurisdiction in which they do not file Tax Returns that Tax Return filing is required.  None of the Company or any of the Company Subsidiaries has been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the date hereof that was purported or intended to be governed by Section 355 of the Code (or any similar provision of state, local or foreign Law).  Neither the Company nor any of the Company Subsidiaries has engaged in, or advised on, a listed transaction within the meaning of Section 6011 of the Code and the regulations issued thereunder.  The Company and each Company Subsidiary is, and has been since the date of its formation, a corporation for U.S. federal income tax purposes, and neither the Company nor any Company Subsidiary has elected pursuant to the Code to be treated as a Subchapter S corporation pursuant to Section 1362(a) of the Code, nor has it made any other elections pursuant to the Code (other than elections that relate solely to methods of accounting, depreciation or amortization) that would have, or be reasonably expected to result in, individually or in the aggregate, a Material Adverse Effect.  Each of the Company and the Company Subsidiaries has complied with all applicable Laws related to the withholding of material Taxes and has duly and timely paid over to the appropriate taxing authorities all material amounts required to be so withheld and paid over.

(y)          Labor.

(i)         Employees of the Company and the Company Subsidiaries are not represented by any labor union nor are any collective bargaining agreements otherwise in effect with respect to such employees.  No labor organization or group of employees of the Company or any Company Subsidiary has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions presently pending or threatened to be brought or filed with the National Labor Relations Board or any other labor relations tribunal or authority, nor have there been in the last three years.  There are no strikes, work stoppages, slowdowns, labor picketing lockouts, material arbitrations or material grievances, or other material labor disputes pending or, to the Knowledge of the Company, threatened against or involving the Company or any Company Subsidiary, nor have there been any in the past year.

(ii)        The Company and the Company Subsidiaries are in compliance in all material respects with all federal and state Laws and requirements respecting employment and employment practices, terms and conditions of employment, collective bargaining, disability, immigration, health and safety, wages, hours and benefits, non-discrimination in employment, workers’ compensation and the collection and payment of withholding and/or payroll taxes and similar taxes.

(iii)       There is no charge or complaint before any Governmental Entity, or labor arbitration proceeding, pending or threatened alleging unlawful discrimination in employment practices, unfair labor practices or other unlawful employment practices by the Company or any Company Subsidiary.

18

(iv)        To the Knowledge of the Company, since December 31, 2017, (i) no allegations of sexual harassment or misconduct have been made against (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries with a total annual compensation opportunity in excess of $75,000, and (ii) neither the Company nor any of the Company Subsidiaries has entered into any settlement agreements related to allegations of sexual harassment or misconduct by (A) an officer of the Company or any of the Company Subsidiaries, (B) a member of the board of directors of the Company or any of the Company Subsidiaries, or (C) an employee of the Company or any of the Company Subsidiaries.  As of the date hereof, the Company has in place a comprehensive Board of Directors-approved employee code of conduct and anti-harassment and discrimination policy.

(z)         Brokers and Finders.  Neither the Company nor any of its officers, directors, employees or agents has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Company in connection with this Agreement or the transactions contemplated hereby, except for Raymond James & Associates, Inc., Keefe, Bruyette & Woods, Inc., or any other broker or finder, the fees of which would not be payable by the Investor.

(aa)        Offering of Securities.

(i)          Neither the Company nor any Person acting on its behalf has taken any action (including any offering of any securities of the Company under circumstances which would require the integration of such offering with the offering of any of the Shares to be issued pursuant to this Agreement under the Securities Act and the rules and regulations of the SEC promulgated thereunder) which would subject the offering, issuance or sale of any of the Shares to be issued pursuant to this Agreement to be subject to the registration requirements of the Securities Act.  Neither the Company nor any Person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Shares pursuant to the transactions contemplated by this Agreement.  Assuming the accuracy of the Investor’s representations and warranties set forth in this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investor.

(ii)         The Company is not disqualified from relying on Rule 506 of Regulation D (“Rule 506”) under the Securities Act for any of the reasons stated in Rule 506(d) (each such reason, a “Disqualification Event”) in connection with the issuance and sale of the Shares to the Investor.  The Company has furnished the Investor, a reasonable time prior to the date hereof, a description in writing of any matters that would have triggered disqualification under Rule 506(d) but which occurred before September 23, 2013, in each case, in compliance with the disclosure requirements of Rule 506(e).

19

(bb)       Affiliate Transactions.  No officer, director, five percent (5%) stockholder or other Affiliate of the Company (or any Company Subsidiary), or any individual who, to the Knowledge of the Company, is related by marriage or adoption to or shares the same home as any such Person, or any entity which, to the Knowledge of the Company, is controlled by any such Person (collectively, an “Insider”), is a party to any contract, agreement or transaction with the Company (or any Company Subsidiary) which pertains to the business of the Company (or any Company Subsidiary) or has any interest in any property, real or personal or mixed, tangible or intangible, used in or pertaining to the business of the Company or any Company Subsidiary.  The foregoing representation and warranty does not include deposit accounts of an Insider at the Company or any Company Subsidiary or loans of $250,000 or less made in the ordinary course of business to Insiders in compliance with Regulation O and other applicable Law.

(cc)       Private Placement.  Assuming the accuracy of the Investor’s representations and warranties set forth in Section 2.3 of this Agreement, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Investor.  Assuming the Stockholder Approval is obtained (if required), the issuance and sale of the Shares hereunder does not contravene the rules and regulations of the Nasdaq Stock Market.

(dd)       Listing and Maintenance Requirements.  The Company’s Voting Common Stock is (and at the Closing, the Class A Common Stock will be) registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to terminate the registration of the Voting Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received written notice from the Nasdaq Stock Market to the effect that the Company is not in compliance with the listing or maintenance requirements of the Nasdaq Stock Market.

(ee)        Investment Company.  Neither the Company nor any of the Company Subsidiaries is required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

(ff)        Acknowledgment Regarding the Investor’s Purchase of Shares.  The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby.  The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions and any advice given by the Investor or any of its representatives or agents in connection with this Agreement, the transactions contemplated hereby and the Concurrent Other Transactions is merely incidental to Investor’s purchase of the Shares.

(gg)      No General Solicitation or General Advertising.  Neither the Company nor any Person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Shares.

20

(hh)       Shell Company Status.  The Company is not, and has never been, an issuer identified in Rule 144(i)(1) under the Securities Act.

(ii)        Valid Issuance of Shares.  The Shares, when issued, sold and delivered in accordance with the terms hereof for the consideration expressed herein will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws or as otherwise set forth herein, in the Company’s certificate of incorporation or in the Investor’s Rights Letter Agreement.  Assuming the accuracy of the representations and warranties of the Investor set forth in Section 2.3, the Shares will be issued in compliance with all applicable federal and state securities laws.

2.3        Representations and Warranties of the Investor.   Except as Previously Disclosed, the Investor hereby represents and warrants to the Company, as of the date hereof and as of the Closing Date (except for the representations and warranties that are as of a specific date which are made as of that date) that:

(a)          Organization and Authority.  The Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and where failure to be so qualified would be reasonably expected to materially and adversely impair or delay its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

(b)         Authorization; No Conflicts.  The Investor has the necessary power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  All corporate action on the part of the Investor, its officers, directors and stockholders necessary for the execution and delivery by the Investor of the Transaction Agreements, the performance of all obligations of the Investor hereunder and thereunder and the consummation of the transactions contemplated hereunder has been taken.  This Agreement has been duly and validly executed and delivered by the Investor and, assuming due authorization, execution and delivery by the Company is the valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

(c)         Purchase for Investment; Accredited Investor Status; Pre-Existing Relationship.  The Investor acknowledges that the Shares to be purchased by the Investor pursuant to this Agreement have not been registered under the Securities Act or under any state securities laws and may not be resold or transferred by the Investor without such registration or appropriate reliance on any available exemption from such requirements.  The Investor (i) is acquiring the Shares pursuant to an exemption from the registration requirements of the Securities Act and other applicable securities laws solely for investment with no present intention to distribute any of the Shares to any Person, (ii) will not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, (iii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Shares and of making an informed investment decision and (iv) is an “accredited investor” (as that term is defined by Rule 501 under the Securities Act), and (v) is aware that the Company has entered into the Merger Agreement pursuant to which it is required to file with the SEC a Registration Statement on Form S-4 (the “Registration Statement”), and (vi) began discussions regarding the potential for the Investment by this Agreement with representatives of the Company before the Registration Statement was filed with the SEC and Investor’s purchase of the Shares was not solicited by the Registration Statement or any other filing made by the Company with the SEC.

21

(d)         Brokers and Finders.  Neither the Investor, nor its Affiliates nor any of their respective officers or directors, has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Investor in connection with this Agreement or the transactions contemplated hereby.

(e)         Access to Information.  The Investor acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and the Company Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects; (iii) the opportunity to request such additional information that the Company possesses or can acquire without unreasonable effort or expense that it deems necessary to make an informed investment decision with respect to the Investment; and (iv) the opportunity to ask questions of management of the Company. The foregoing, however, does not limit or modify the enforceability of Section 5.1 with respect to breaches of the representations and warranties of the Company in Section 2.2 of this Agreement or the right of the Investor to rely on such representations and warranties.

(f)         No Reliance.  The Investor has not relied on any representation or warranty made by any Person by or on behalf of the Company, including, without limitation, the Placement Agents, in connection with the Investment other than those contained in this Agreement.

(g)         Placement Agents.  The Investor acknowledges that the Placement Agents have not performed any due diligence review on behalf of the Investor.  Furthermore, the Investor will purchase the Shares directly from the Company and not from the Placement Agents and understands that neither the Placement Agents nor any other broker or dealer has any obligation to make a market in the Common Stock.

(h)         Accuracy of Representations.  The Investor understands that the Company will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements in connection with the transactions contemplated by this Agreement and agrees that if any of the representations or acknowledgements made by it are no longer accurate as of the Closing Date, or if any of the agreements made by it are breached on or prior to the Closing Date, it shall promptly notify the Company.

22

ARTICLE 3.

COVENANTS

3.1         Conduct of Business Prior to Closing.  Except as otherwise expressly required or contemplated by this Agreement or applicable Law, or with the prior written consent of the Investor, between the date of this Agreement and the Closing, the Company shall, and the Company shall cause each Company Subsidiary to:

(a)          use commercially reasonable efforts to conduct its business only in the ordinary course of business consistent with past practice; and

(b)        use commercially reasonable efforts to (i) preserve the present business operations, organization (including officers and employees) and goodwill of the Company and any Company Subsidiary and (ii) preserve business relationships with customers, suppliers, consultants and others having business dealings with the Company; provided, however, that nothing in this clause (b) shall place any limit on the ability of the Board of Directors to act in accordance with, or require any actions that the Board of Directors may, in good faith, determine to be inconsistent with, its duties or the Company’s obligations under applicable Law or imposed by any Governmental Entity.

3.2         Use of Proceeds.  The proceeds received by the Company from the sale of the Shares contemplated hereunder (net of any applicable costs and expenses) will be used in a manner consistent in all material respects with the capital deployment plan provided by the Company to the Investor prior to the execution of this Agreement.  The Company will not directly or indirectly use the proceeds of the sale of the Common Stock pursuant to transactions contemplated by this Agreement, or lend, contribute or otherwise make available such proceeds to any Company Subsidiary, joint venture partner or other Person, (i) for the purpose of funding, financing or facilitating any sales, operations, activities, business or transactions in any Sanctioned Country or with any Sanctioned Person, or (ii) in violation of Anti-Corruption Laws.

3.3         Regulatory Filings.  The Company shall make all filings pursuant to any applicable state securities laws and Regulation D of the Securities Act that are required to be made by it in connection with the transactions contemplated by this Agreement.

3.4         Confidentiality.  The Investor acknowledges that the information being provided to it in connection with the transactions contemplated hereby includes confidential information that has not been publicly disclosed and agrees to maintain the confidentiality of the information with the same degree of care that it uses to protect its own similar confidential information unless any such information (i) is or becomes part of the public domain (other than as a result of a breach of this Agreement by the Investor), or (ii) is or has been made known or disclosed to the Investor by a third party without, to the knowledge of the Investor, a breach of any confidentiality obligations by such third party; or (iii) as required by applicable law or as may be required or requested by any governmental, administrative or regulatory authority pursuant to a regulatory inquiry or investigation or otherwise, provided that in the case of clause (iii), Investor shall promptly notify the Company of such request or requirement (to the extent such notice is permitted by law, regulation or regulatory guidance) and exercise reasonable efforts to assist the Company in seeking confidential treatment of such confidential information at the sole cost and expense of the Company.  Notwithstanding the foregoing, nothing shall prohibit the Investor from disclosing, without prior notice, any such information to any governmental agency, regulatory authority or self-regulatory authority with authority to regulate or oversee any aspect of its business, including (without limitation) bank and securities examiners, in the course of inspections, filings, reviews, examinations or inquiries thereby.

23

3.5        Publicity.  The Company shall not disclose the financial or other terms of the transactions contemplated hereby or the name of the Investor or any Affiliate or investment adviser or other adviser of the Investor, without the prior written consent of the Investor, provided that the Company may disclose such information to its financial, legal and other advisors who are subject to confidentiality obligations to the Company with respect to such information.  Without limiting the foregoing, the Company shall not include the name of the Investor or any Affiliate, investment adviser or other adviser of the Investor in any press release or filing with the SEC or the Nasdaq Stock Market and shall not use any names, trademarks, service marks or trade names of the Investor or its Affiliates in any form of advertising and publicity or public statements, without the prior written consent of the Investor. Notwithstanding the foregoing, the Company may disclose such information (i) as required by federal securities law in connection with the filing of final transaction documents with the SEC or (ii) to the extent such disclosure is required by applicable law, at the request of the staff of the SEC or at the request of the Nasdaq Stock Market regulations, in which case the Company shall promptly provide the Investor with prior written notice of such disclosure and the form of such disclosure shall be subject to the approval of the Investor, such approval not to be unreasonably withheld or delayed.

3.6        Commercially Reasonable Efforts.  Upon the terms and subject to the conditions herein provided, except as otherwise provided in this Agreement, each of the Parties hereto agrees to use its commercially reasonable efforts to take or cause to be taken all action, to do or cause to be done and to assist and cooperate reasonably with the other Party in doing all things necessary, proper or advisable under applicable Laws to consummate and make effective the transactions contemplated hereby, including but not limited to: (a) the satisfaction of the conditions precedent to the obligations of the Parties; (b) the obtaining of applicable Governmental Consents, and consents, waivers and approvals of any other third parties; and (c) the execution and delivery of such instruments, and the taking of such other actions as the other Party may reasonably request in order to carry out the intent of this Agreement.  Notwithstanding the foregoing, under no circumstances will the Investor be required to disclose to the Company, the Company Subsidiaries or any third party any information the disclosure of which is prohibited by Law, nor shall it be required to agree to any restrictions, conditions or commitments imposed or otherwise required by any Governmental Entity that are determined by the Investor in its sole discretion to be unduly burdensome, other than customary passivity commitments, in order to consummate and make effective the transactions contemplated hereby.

3.7        Legend.

(a)          The Investor agrees that all certificates or other instruments representing the Shares subject to this Agreement shall bear legends substantially to the following effect, until such time as they are not required under Section 3.7(b)

24

“THE SHARES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.”

“THE SALE OR TRANSFER OF SHARES OF THE CLASS C COMMON STOCK OF THE CORPORATION IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE CERTIFICATE OF INCORPORATION OF THE CORPORATION, A COPY OF WHICH MAY BE OBTAINED FROM THE SECRETARY OF THE CORPORATION.”

(b)         Upon request of the Investor, the Company shall promptly cause such legends to be removed from any certificate for any Shares to be so transferred if such Shares are being transferred pursuant to an exemption from the registration securities requirements of the Securities Act and applicable state Laws, subject to receipt by the Company of an opinion of counsel for the Investor reasonably satisfactory to the Company to the effect that such legend is no longer required under the Securities Act and applicable state Laws.  The Investor acknowledges that the sale of the Shares provided for herein has not been registered under the Securities Act or under any state securities Laws and agrees that it shall not sell or otherwise dispose of any of the Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities Laws.

3.8        Exchange Listing.  The Company shall use its reasonable best efforts to cause to be approved for listing on the Nasdaq Stock Market as promptly as possible any shares of Class A Common Stock into which Shares of Class C Common Stock are converted in connection with resale of such Shares by the Investor in compliance with the restrictions set forth in the certificate of incorporation of the Company.

3.9         Authorized Shares.  The Company will at all times reserve, free of any preemptive or similar rights of stockholders of the Company, a number of unissued shares of Class A Common Stock, sufficient to convert automatically, in accordance with the terms of the certificate of incorporation of the Company, all of the shares of Class C Common Stock then outstanding.

3.10       Rule 144 Reporting.  With a view to making available to the Investor the benefits of certain rules and regulations of the SEC which may permit the sale of the Shares by the Investor without registration under the Securities Act upon compliance with the initial holding period and other applicable requirements of Rule 144 under the Securities Act, the Company agrees to use its reasonable best efforts to:

(i)          make and keep adequate current public information with respect to the Company available, as those terms are understood and defined in Rule 144(c)(1) or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of this Agreement;

25

(ii)         so long as the Investor owns any of the Shares, furnish to the Investor forthwith upon request: (A) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 under the Securities Act, and of the Exchange Act; (B) a copy of the most recent annual or quarterly report of the Company; and (C) such other reports and documents as the Investor may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any of the Shares without registration; and

(iii)        to take such further action as the Investor may reasonably request, all to the extent required from time to time to enable the Investor to sell Shares without registration under the Securities Act.

3.11      Automatic Conversion.

      If the Investor transfers shares of Class C Common Stock held by the Investor to a Person other than the Investor or an Affiliate of the Investor in a transaction that complies with the applicable terms and conditions set forth in the Company’s
      certificate of incorporation, including the restrictions on transfer contained therein that are intended to cause such shares to qualify as non-voting shares under the applicable requirements and policies of the Board of Governors of the Federal
      Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation or any other regulatory body having jurisdiction over the Company or the Bank, then such shares shall immediately and without any further
      action on the part of any Person, automatically convert into shares of Class A Common Stock.

ARTICLE 4.

TERMINATION

4.1         Termination.  This Agreement may be terminated prior to the Closing:

(a)         by mutual written agreement of the Company and the Investor;

(b)         by either Party, upon written notice to the other Party in the event that the Closing does not occur on or before September 1, 2021 (the “Termination

          Date”\); provided, however, that the right to terminate this Agreement pursuant to this Section 4.1\(b\) 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;

(c)         by either Party, upon written notice to the other Party, (i) in the event that Stockholder Approval is required under applicable Law or the rules and regulations of the Nasdaq Stock Market, but has not been obtained on or prior to the closing date of the Merger or (ii) the Authorized Shares Increase Approval has not been obtained on or prior to the closing date of the Merger;

26

(d)         by the Investor, upon written notice to the Company, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Company in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(ii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the Termination Date;

(e)          by the Company, upon written notice to the Investor, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Investor in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(iii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in absence of such breach or condition; provided that this Section 4.1(e) shall only apply if the Company is not in material breach of any of the terms of this Agreement; or

(f)          by any Party, upon written notice to the other Party, in the event that any Governmental Entity shall have issued any order, decree or injunction or taken any other action restraining, enjoining or prohibiting any of the transactions contemplated by this Agreement, and such order, decree, injunction or other action shall have become final and non-appealable.

4.2        Effects of Termination.  In the event of any termination of this Agreement as provided in Section 4.1, this Agreement (other than Section 3.4, this Article 4 and Article 6 of this Agreement, which shall remain in full force and effect) shall forthwith become wholly void and of no further force and effect; provided, that nothing herein shall relieve any Party from liability for fraud or willful breach of this Agreement.

ARTICLE 5.

INDEMNITY

5.1         Indemnification by the Company.

(a)         After the Closing, and subject to Sections 5.1(b), 5.3 and 5.4, the Company shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Investor and its Affiliates, and their respective successors and assigns, officers, directors, partners, members and employees, as applicable, (the “Investor Indemnified Parties”) against and from, and reimburse any of the Investor Indemnified Parties for, all Losses that any of the Investor Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Company in this Agreement or any certificate delivered pursuant hereto or (2) any breach or failure by the Company to perform any of its covenants or agreements contained in this Agreement.  Notwithstanding anything herein to the contrary, the obligations of the Company under this Section 5.1(a) shall not be applicable to or inure to the benefit of any transferee of the Common Stock sold pursuant to this Agreement who is not an Affiliate of the Investor.

27

(b)         Notwithstanding anything to the contrary contained herein, the Company shall not be required to indemnify, defend or hold harmless any of the Investor Indemnified Parties against, or reimburse any of the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) (other than Losses arising out of the inaccuracy or breach of any Company Specified Representations) until the aggregate amount of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a) exceeds $100,000 (the “Threshold Amount”), upon the occurrence of which the Company shall be obligated for all of the Investor Indemnified Parties’ Losses for which the Investor Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.1(a).  Notwithstanding anything to the contrary contained herein, the Company shall not be precluded from bringing or maintaining any claim of intentional, common law fraud by the Investor in making the representations and warranties set forth in Section 2.3, and shall not be required to indemnify, defend or hold harmless the Investor Indemnified Parties against, or reimburse the Investor Indemnified Parties for, any Losses pursuant to Section 5.1(a) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1.

(c)         For purposes of Section 5.1(a), in determining whether there has been a breach of a representation or warranty, the Parties hereto shall ignore any “materiality,” “Material Adverse Effect” or similar qualifications.

5.2         Indemnification by the Investor.

(a)         After the Closing, and subject to Sections 5.2(b), 5.3 and 5.4, the Investor shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Company and its respective Affiliates and their respective successors and assigns, officers, directors, partners, members, employees and consultants retained in connection with the transactions contemplated by this Agreement (collectively, the “Company Indemnified Parties”) against and from, and reimburse any of the Company Indemnified Parties for, all Losses that the Company Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (1) the inaccuracy or breach of any representation or warranty made by the Investor in this Agreement or (2) any breach or failure by such Investor to perform any of its covenants or agreements contained in this Agreement.

(b)         Notwithstanding anything to the contrary contained herein, the Investor shall not be required to indemnify, defend or hold harmless any of the Company Indemnified Parties against, or reimburse any of the Company Indemnified Parties for any Losses pursuant to Section 5.2(a)(1) until the aggregate amount of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a) exceeds the Threshold Amount, upon the occurrence of which the Investor shall be obligated for all of the Company Indemnified Parties’ Losses for which the Company Indemnified Parties are finally determined to be otherwise entitled to indemnification under Section 5.2(a)(1).  Notwithstanding anything to the contrary contained herein, the Investor shall not be required to indemnify, defend or hold harmless the Company Indemnified Parties against, or reimburse the Company Indemnified Parties for, any Losses pursuant to Section 5.2(a)(1) in a cumulative aggregate amount exceeding the Purchase Price paid by the Investor to the Company pursuant to Section 1.1 hereof. Notwithstanding anything to the contrary contained in this Section 5.2, the Investor shall not be precluded from bringing or maintaining any claim of intentional, common law fraud, fraud under the U.S. securities laws, gross negligence, willful misconduct or bad faith in each case by the Company, and shall not be required to indemnify, defend or hold harmless the Company Indemnified Parties for any Losses resulting or arising, in whole or in part, from actions taken by the Company or other Company Indemnified Parties that constitute fraud, gross negligence, willful misconduct or bad faith by the Company or the applicable Company Indemnified Party.

28

(c)        For purposes of Section 5.2(a), in determining whether there has been a breach of a representation or warranty, the Parties shall ignore any “materiality” or similar qualifications.

5.3         Notification of Claims.

(a)          Any Person that may be entitled to be indemnified under this Article 5 (the “Indemnified Party”) shall promptly notify the party or parties liable for such indemnification (the “Indemnifying Party”) in writing of any claim in respect of which indemnity may be sought hereunder, including any pending or threatened claim or demand by a third party that the Indemnified Party has determined has given or could reasonably give rise to a right of indemnification under this Agreement (including a pending or threatened claim or demand asserted by a third party against the Indemnified Party) (each, a “Third Party Claim”), describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or demand; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Agreement except to the extent that the Indemnifying Party is materially prejudiced by such failure.  The Parties agree that notices for claims in respect of a breach of a representation, warranty, covenant or agreement must be delivered prior to the expiration of any applicable survival period specified in Section 6.1 for such representation, warranty, covenant or agreement; provided, that if, prior to such applicable date, a Party hereto shall have notified the other Party hereto in accordance with the requirements of this Section 5.3(a) of a claim for indemnification under this Agreement (whether or not formal legal action shall have been commenced based upon such claim), such claim shall continue to be subject to indemnification in accordance with this Agreement notwithstanding the passing of such applicable date.

29

(b)         Upon receipt of a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) in respect of a Third Party Claim, the Indemnifying Party may, by notice to the Indemnified Party delivered within twenty (20) Business Days of the receipt of notice of such Third Party Claim, assume the defense and control of any Third Party Claim, with its own counsel reasonably acceptable to the Indemnified Party and at its own expense.  The Indemnified Party shall have the right to employ counsel on its own behalf for, and otherwise participate in the defense of, any such Third Party Claim, but the fees and expenses of its counsel will be at its own expense unless (A) the employment of counsel by the Indemnified Party at the Indemnifying Party’s expense has been authorized in writing by the Indemnifying Party, (B) the Indemnified Party reasonably believes there may be a conflict of interest between the Indemnified Party and the Indemnifying Party in the conduct of the defense of such Third Party Claim, (C) the Indemnified Party reasonably believes there are legal defenses available to it that are different from, additional to or inconsistent with those available to the Indemnifying Party, or (D) the Indemnifying Party has not in fact employed counsel to assume the defense of such Third Party Claim within a reasonable time after receipt of notice of the commencement of such Third Party Claim, in each of which cases the fees and expenses of such Indemnified Party’s counsel shall be at the expense of the Indemnifying Party; provided, however, that in the event that the Company is required to assume the fees and expenses of such Investor Indemnified Party’s counsel in accordance with the foregoing and such Investor Indemnified Party is similarly situated with any other “Investor Indemnified Party” under any of the other stock purchase agreements with respect to any Third Party Claim, and does not have any conflict of interest with such Person in the conduct of the defense of such Third Party Claim or have legal defenses available to it that are different from, additional to or inconsistent with those available to such Person, such Investor Indemnified Party shall be required to employ the same counsel as such Person and the Company shall be responsible for the fees and expenses of only one such counsel for such Investor Indemnified Party and such other Person or Persons (assuming any of clauses (A) through (D) above is satisfied).  The Indemnified Party may take any actions reasonably necessary to defend such Third Party Claim prior to the time that it receives a notice from the Indemnifying Party as contemplated by the immediately preceding sentence.  The Indemnified Party shall, and shall cause each of its Affiliates and representatives to, use reasonable best efforts to cooperate with the Indemnifying Party in the defense of any Third Party Claim.  The Indemnifying Party shall not, without the prior written consent of the Indemnified Party (which shall not be unreasonably withheld or delayed), consent to a settlement, compromise or discharge of, or the entry of any judgment arising from, any Third Party Claim, unless such settlement, compromise, discharge or entry of any judgment does not involve any statement, finding or admission of any fault, culpability, failure to act, violation of Law or admission of any wrongdoing by or on behalf of the Indemnified Party, and the Indemnifying Party shall (i) pay or cause to be paid all amounts arising out of such settlement or judgment concurrently with the effectiveness of such settlement or judgment (unless otherwise provided in such judgment), (ii) not encumber any of the assets of any Indemnified Party or agree to any restriction or condition that would apply to or materially adversely affect any Indemnified Party or the conduct of any Indemnified Party’s business and (iii) obtain, as a condition of any settlement, compromise, discharge, entry of judgment (if applicable), or other resolution, a complete and unconditional release of each Indemnified Party in form and substance reasonably satisfactory to such Indemnified Party from any and all liabilities in respect of such Third Party Claim.  An Indemnified Party shall not settle, compromise or consent to the entry of any judgment with respect to any claim or demand for which it is seeking indemnification from the Indemnifying Party or admit to any liability with respect to such claim or demand without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed); provided, that such consent shall not be required if the Indemnifying Party has not fulfilled any material obligations under this Section 5.3(b).

(c)         In the event any Indemnifying Party receives a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) that does not involve a Third Party Claim, the Indemnifying Party shall notify the Indemnified Party within twenty (20) Business Days following its receipt of such notice whether the Indemnifying Party disputes its liability to the Indemnified Party under this Agreement.  The Indemnified Party shall reasonably cooperate with and assist the Indemnifying Party in determining the validity of any such claim for indemnity by the Indemnified Party.

5.4        Indemnification Payment.  In the event a claim or any Action for indemnification hereunder has been finally determined, the amount of such final determination shall be paid by the Indemnifying Party to the Indemnified Party on demand in immediately available funds.  A claim or an Action, and the liability for and amount of damages therefor, shall be deemed to be “finally determined” for purposes of this Agreement when the Parties have so determined by mutual agreement or, if disputed, when a final non-appealable judicial order has been entered into with respect to such claim or Action.

30

5.5         Exclusive Remedies.  Subject to Section 6.14, except in the cases of actual and intentional, common law fraud under New York law, by a Party in making the representations and warranties set forth in Section 2.2, in the case of the Company, and Section 2.3, in the case of Investor, each Party acknowledges and agrees that following the Closing, the indemnification provisions hereunder shall be the sole and exclusive remedies of the Parties for any breach of the representations, warranties or covenants contained in this Agreement.  No investigation of the Company by the Investor, or of the Investor by the Company, whether prior to or after the date of this Agreement, shall limit any Indemnified Party’s exercise of any right hereunder or be deemed to be a waiver of any such right.  The Parties agree that any indemnification payment made pursuant to this Agreement shall be treated as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

ARTICLE 6.

MISCELLANEOUS

6.1         Survival.  The representations and warranties of the Parties contained in this Agreement shall survive in full force and effect until the date that is eighteen (18) months after the Closing Date (or until final resolution of any claim or action arising from the breach of any such representation and warranty, if notice of such breach was provided prior to the end of such period), at which time they shall terminate and no claims shall be made for indemnification under Section 5.1 or Section 5.2, as applicable, for breaches of representations or warranties thereafter, except the Company Specified Representations (other than the representations and warranties made in Section 2.2(w) and the Investor Specified Representations, which shall survive until the expiration of the applicable statute of limitations).  The covenants and agreements set forth in this Agreement shall survive until the expiration of any applicable statute of limitations or until performed or no longer operative in accordance with their respective terms.  Notwithstanding the foregoing, the Company Specified Representations shall survive for the period of the applicable statute of limitations.

6.2        Other Definitions.  Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa, and references to any agreement, document or instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time.  In addition, the following terms shall have the meanings assigned to them below:

(a)         the term “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person provided that no security holder of the Company shall be deemed to be an Affiliate of any other security holder or of the Company or any of the Company Subsidiaries solely by reason of any investment in the Company and, for purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled

          by” and “under 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 or policies
      of such Person, whether through the ownership of voting securities, by contract or otherwise;

31

(b)        the term “Agency” means the Federal Housing Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home Administration (now known as Rural Housing and Community Development Services), the Federal National Mortgage Association, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture or any other federal or state agency with authority to (i) determine any investment, origination, lending or servicing requirements with regard to mortgage loans originated, purchased or serviced by the Company or (ii) originate, purchase, or service mortgage loans, or otherwise promote mortgage lending, including state and local housing finance authorities;

(c)          the term “Board of Directors” means the Board of Directors of the Company;

(d)        the term “Business Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York or in the State of California generally are authorized or required by Law or other governmental actions to close;

(e)          the term “Capital Stock” means the capital stock or other applicable type of equity interest in a Person;

(f)          the term “Code” means the Internal Revenue Code of 1986, as amended;

(g)          the term “Company Specified Representations” means the representations and warranties made in Section 2.2(a), Section 2.2(b), Section 2.2(c), Section 2.2(d), Section 2.2(y), Section 2.2(aa) and Section 2.2(ii);

(h)         the term “Disclosure Schedule” shall mean a schedule attached hereto delivered by the Company to the Investor setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in Section 2.2 with respect to the Company;

(i)          the term “GAAP” means United States generally accepted accounting principles and practices as in effect from time to time;

(j)          the term “Governmental Consent” means any notice to, registration, qualification, designation, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Entity, or the expiration or termination of any statutory waiting periods;

(k)          the term “Governmental Entity” means any court, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign, and any applicable industry self-regulatory organization or securities exchange;

32

(l)         the term “Insurer” means a Person who insures or guarantees for the benefit of the mortgagee all or any portion of the risk of loss upon borrower default on any of the mortgage loans originated, purchased or serviced by the Bank, including the Federal Housing Administration, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any private mortgage insurer, and providers of hazard, title or other insurance with respect to such mortgage loans or the related collateral;

(m)        the term “Investor Specified Representations” means the representations and warranties made in Section 2.3(a), Section 2.3(b), and Section 2.3(c);

(n)          the term “Knowledge” of the Company and words of similar import mean the knowledge, after reasonable inquiry, of any directors or executive officers of the Company listed on the Disclosure Schedule hereto;

(o)          the term “Loan Investor” means any Person (including an Agency) having a beneficial interest in any mortgage loan originated, purchased or serviced by the Bank or a security backed by or representing an interest in any such mortgage loan;

(p)        the term “Losses” means any and all losses, damages, reasonable costs, reasonable expenses (including reasonable attorneys’ fees and disbursements), liabilities, settlement payments, awards, judgments, fines, obligations, claims, and deficiencies of any kind, excluding special, consequential, exemplary and punitive damages, except where such damages are awarded to a third-party pursuant to a final, non-appealable decision issued by a court of competent jurisdiction;

(q)        the term “Person” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, Governmental Entity or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity;

(r)          the term “Sanctioned Country” means a country, region or territory which is itself the subject or target of any comprehensive Sanctions Laws.

(s)          the term “Sanctioned Person” means (a) any Person listed in any sanctions-related list of designated Person maintained by OFAC, the U.S. Department of State, or other relevant sanctions authority, (b) any Person, organized or resident in a Sanctioned Country, or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).

(t)          the term “Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company or other entity (x) of which such Person or a Subsidiary of such Person is a general partner or (y) of which a majority of the voting securities or other voting interests, or 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 or controlled by, by such Person and/or one or more Subsidiaries thereof;

33

(u)        the term “Tax” or “Taxes” means all United States federal, state, local or foreign income, profits, estimated, gross receipts, windfall profits, severance, property, intangible property, occupation, production, sales, use, license, excise, emergency excise, franchise, capital gains, capital stock, employment, withholding, transfer, stamp, payroll, goods and services, value added, alternative or add-on minimum tax, or any other tax, custom, duty or governmental fee, or other like assessment or charge of any kind whatsoever, together with any interest, penalties, fines, related liabilities or additions to tax that may become payable in respect thereof imposed by any Governmental Entity, whether or not disputed;

(v)        the term “Tax Return” means any return, declaration, report or similar statement required to be filed with respect to any Taxes (including any attached schedules), including, without limitation, any information return, claim or refund, amended return and declaration of estimated Tax;

(w)        the term “Voting Securities” means at any time shares of any class of Capital Stock of the Company, including but not limited to Voting Common Stock (or, after giving effect to the Merger Transactions, Class A Common Stock), and Voting Debt that are then entitled to vote generally in the election of directors;

(x)          the word “or” is not exclusive;

(y)          the words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”;

(z)          the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision; and

(aa)       all article, section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit and schedule references not attributed to a particular document shall be references to such exhibits and schedules to this Agreement.

6.3       Amendment

          and Waivers.  The conditions to each Party’s obligation to consummate the Closing are for the sole benefit of such Party and may be waived by such Party in whole or in part to the extent permitted by Law.  No amendment or waiver of
      any provision of this Agreement will be effective against any Party unless it is in a writing signed by a duly authorized officer of such Party.

6.4        Counterparts and Facsimile.  For the convenience of the Parties, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement.  Executed signature pages to this Agreement may be delivered by facsimile and such facsimiles shall be deemed as sufficient as if manually signed signature pages had been delivered.

6.5         Governing Law.  This Agreement will be governed by and construed in accordance with the Laws of the State of New York applicable to contracts made and to be performed entirely within such State.

34

6.6         WAIVER OF JURY TRIAL.  TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, INVESTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY WHETHER BASED ON CONTRACT, EQUITY, TORT OR ANY OTHER THEORY.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN BY INVESTOR, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

6.7        Notices.  Any notice, request, instruction or other document to be given hereunder by any Party to the other will be in writing and will be deemed to have been duly given (a) on the date of delivery if delivered personally or facsimile, upon confirmation of receipt, (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid, provided that any such notice, request, instruction or other document to be given hereunder shall not be deemed to have been duly given unless and until it is sent via electronic mail to the recipient thereof.  All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice.

(a)          If to the Investor:

J.P. Morgan Chase Community Development Corporation

c/o JPMorgan Chase Bank, N.A.

237 Park Avenue, 7^th^ Floor

New York, NY 10017-3140

Telephone: 212 270 2832
Attn: Andrew T. Guida, Managing Director
--- ---
Email: Andrew.t.guida@jpmorgan.com
--- ---

With copy (which shall not constitute notice) to:

JPMorgan Chase Legal Department

4 New York Plaza, 21^st^ Floor

New York, NY 10004-2413

Telephone: 212 623 2453
Attn: Cris T. Kako, Associate General Counsel
--- ---
Email: cris.kako@jpmchase.com
--- ---

With copy (which shall not constitute notice) to:

Wilmer Cutler Pickering Hale and Dorr LLP

7 World Trade Center 250 Greenwich Street

New York, New York 10007

Telephone: 212 230 8800
Attention: Lisa Firenze
--- ---
Email: Lisa.Firenze@WilmerHale.com
--- ---

35

(b)      If to the Company:

Broadway Financial Corporation

5055 Wilshire Boulevard, Suite 500

Los Angeles, California 90036

Attn: Brenda Battey, Chief Financial Officer
Email: bbattey@broadwayfederalbank.com
--- ---

with a copy (which copy shall not constitute notice) to:

Arnold & Porter LLP

777 South Figueroa Street,

44th Floor

Los Angeles, California 90017

Attn: James R. Walther, Esq.
Fax: 213 243 4199
--- ---
Email: James.Walther@arnoldporter.com
--- ---

6.8         Entire Agreement.  This Agreement constitutes the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, inducements or conditions, both written and oral, among the Parties, with respect to the subject matter hereof and thereof.

6.9         Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns, including any purchasers of the Common Stock to be issued pursuant to this Agreement.  The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor.  The Investor may assign some or all of its rights hereunder or thereunder without the consent of the Company to any Affiliate of the Investor, and such assignee shall be deemed to be an Investor hereunder with respect to such assigned rights and shall be bound by the terms and conditions of this Agreement that apply to the Investor.

6.10       Captions.  The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.

6.11       Severability.  If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon 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.

36

6.12      Third Party Beneficiaries.  Nothing contained in this Agreement, expressed or implied, is intended to confer upon any Person other than the Parties, any benefit right or remedies, except that (a) the Placement Agents may rely on the representations and warranties of the Company contained herein to the same extent as if they were party to this Agreement and (b) the provisions of Sections 5.1 and 5.2 shall inure to the benefit of the Persons referred to in such Sections.

6.13      Public Announcements.  The Investor will not make (and will use its reasonable best efforts to ensure that its Affiliates and representatives do not make) any press or news release or public announcement with respect to this Agreement and any of the transactions contemplated hereby, without first consulting with the Company and, in each case, also receiving the Company’s consent (which shall not be unreasonably withheld, conditioned or delayed); provided, however, nothing in this Section 6.13 shall prevent or restrict any disclosure with respect to this Agreement and the transactions contemplated hereby as required by applicable law or as may be required or requested by any governmental, administrative or regulatory authority pursuant to a regulatory inquiry or investigation or otherwise.

6.14       Specific Performance.  The Parties agree that irreparable damage would occur in the event that any of the covenants and agreements set forth in this Agreement were not performed in accordance with their specific terms.  It is accordingly agreed that the Parties shall be entitled to seek specific performance of the covenants and agreements set forth in this Agreement, this being in addition to any other remedies to which they are entitled at law or equity.

6.15       No Recourse to Other Persons.  This Agreement may only be enforced against the named Parties.  All claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may be made only against the entities that are expressly identified as Parties or that are subject to the terms hereof, and no past, present or future director, officer, employee, incorporator, member, manager, partner, stockholder, Affiliate, agent, attorney or representative of any Party (including any person negotiating or executing this Agreement on behalf of a Party) shall have any liability or obligation with respect to this Agreement or with respect to any claim or cause of action, whether in tort, contract or otherwise, that may arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement and the transactions contemplated hereby.

[signature page follows]

37

IN WITNESS WHEREOF, the Parties 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:
---
Name: Wayne-Kent A. Bradshaw
--- ---
Title: President and Chief Executive Officer

[Stock Purchase Agreement]

J.P. MORGAN CHASE COMMUNITY DEVELOPMENT CORPORATION
By:
Name:
Title:

[Stock Purchase Agreement]

Annex A

Concurrent Other Transactions  - Investors

Ally Ventures, a business unit of Ally Financial Inc.

Banc of America Strategic Investments Corporation

Banner Bank

Cedars-Sinai Medical Center

Citicorp Banking Corporation

First Republic Bank

Grace & White, Inc. Profit Sharing Plan

Gerald I. White

Butterfield Trust (Bermuda) Limited as trustee for the following trusts: The Lorraine Grace Will Trust, The Anne Grace Kelly Trust 99, The Gwendolyn Grace Trust 99, The Lorraine L. Grace Trust 99, The Ruth Grace Jervis Millennium Trust

Texas Capital Community Development Corporation

Wells Fargo Central Pacific Holdings, Inc.

EXHIBIT A

FORM OF INVESTOR’S RIGHTS LETTER AGREEMENT

EXECUTION VERSION

INVESTOR’S RIGHTS LETTER AGREEMENT

April 6, 2021

Broadway Financial Corporation

5055 Wilshire Boulevard, Suite 500

Los Angeles, California 90036

Attn: Brenda J. Battey,
Executive Vice President & Chief Financial Officer
Re: Investor’s Rights

Ladies and Gentlemen:

Reference is made to that certain Stock Purchase Agreement, dated as of February 20, 2021 (the “Agreement”), by and between Broadway Financial Corporation, a Delaware corporation (the “Company”), and J.P. Morgan Chase Community Development Corporation, a Delaware corporation (the “Investor”), pursuant to which, after the consummation of the Merger Transactions (as defined in the Agreement), the Company has agreed to issue and deliver to the Investor 5,056,179 shares of non-voting Class C common stock of the Company, par value $0.01 per share (the “Purchased Shares”) for the Purchase Price. The Company has also issued and delivered to the Investor 681,300 shares of Class A Common Stock in exchange for 50,000 shares of voting common stock of CFB pursuant to the Merger Agreement, which were immediately thereafter exchanged for 681,300 shares of Class C Common Stock pursuant to that certain Exchange Agreement, between the Investor and the Company (the “Exchanged Shares”, and together with the Purchased Shares, the “Shares”). This letter agreement memorializes our agreement concerning certain legal compliance matters and certain governance rights that the Investor will be entitled to, effective as of the date hereof, in respect of the Investor’s ownership of the Shares.  Any capitalized terms used herein but not otherwise defined herein shall have their respective meanings as set forth in the Agreement.

1.           Inspection; Information Rights.

(a)         For so long as the Investor holds an amount of Shares (including Shares the Investor has transferred to any of its Affiliates) equal to at least 50% of the Shares acquired by the Investor at the Closing of the Agreement (the foregoing calculation to be adjusted as appropriate for stock splits or other comparable corporate actions), the Company shall permit the Investor, in a manner designed to not interfere with the normal business operations of the Company, to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times during normal business hours as may be requested by the Investor upon reasonable advance notice, and subject to any limitations required by applicable law.

1

(b)         For so long as the Investor holds an amount of Shares (including Shares the Investor has transferred to any of its Affiliates) equal to at least 50% of the Shares acquired by the Investor at the Closing of the Agreement (the foregoing calculation to be adjusted as appropriate for stock splits or other comparable corporate actions), the Company shall deliver to the Investor the following, unless already available on the United States Securities and Exchange Commission’s EDGAR site or successor system:

(i)         as soon as reasonably practicable, but in any event within 90 days after the end of each fiscal year of the Company, an audited consolidated income statement, statement of cash flows and statement of shareholder’s equity and an audited consolidated balance sheet of the Company, together with all related financial notes thereto, in each case prepared in accordance with GAAP;

(ii)        as soon as practicable, but in any event within 45 days after the end of each quarter of each fiscal year of the Company (excluding the fourth quarter of each fiscal year), an unaudited consolidated income statement and statement of cash flows and an unaudited consolidated balance sheet as of the end of such fiscal quarter, in each case prepared in accordance with GAAP;

(iii)        a statement of the total number of outstanding shares of Common Stock of the Company (a “Share Count Statement”) (A) as soon as practicable, but in any event within 45 days of the end of each fiscal quarter of the Company (including the fourth fiscal quarter), or at any time as the Investor may reasonably request from time to time, and (B) promptly, but in any event no more than five business days, following any (x) decrease in the number of outstanding shares of the Company (excluding outstanding restricted stock awards) or (y) increase in the number of outstanding shares of the Company (excluding outstanding restricted stock awards) of more than 1%, in each case, as compared to the most recent Share Count Statement delivered to the Investor;

(iv)        as soon as reasonably practicable reasonably detailed reports with respect to (A) material legal or compliance matters of which the Company or any of the Company Subsidiaries is, or is reasonably expected to become, a party or otherwise subject, or any other matters that may reasonably be expected to adversely impact the reputation of the Company or its investors (any such event, an “Adverse

              Compliance/Reputational Matter”\), and \(B\) any event that has caused, or may reasonably be expected to cause, the Surviving Bank to fail to qualify as a “minority depository institution” \(as defined under applicable law\), provided that
            upon the consummation of the Merger Transactions, the Surviving Bank will not be a “minority depository institution”, but shall promptly thereafter apply to be designated as such and as soon as reasonably practicable, inform the Investor
            when the Surviving Bank has been so designated as a “minority depository institution”\);

2

(v)         The Company shall inform the Investor in writing reasonably promptly after receiving any written notice of any inquiry or request from any Government Entity relating to whether the Company or any Company Subsidiaries are in compliance with AML Laws, Sanctions Laws, and Anti-Corruption Laws.

Notwithstanding anything in this letter agreement to the contrary, the Company shall not be obligated pursuant to Sections 1(a) or 1(b)(iii) though (v) to provide information (1) that it reasonably considers to be confidential competitive information or that is confidential supervisory information, (2) the disclosure of which it reasonably determines (based upon the advice of counsel) will violate applicable Law (including applicable bank secrecy laws and similar legislation), or result in the loss of any attorney-client privilege; provided, however, that if the foregoing applies the Company shall use reasonable efforts to make substitute disclosure arrangements (including redacting information) that would enable the provision of such information without disclosing such competitive information or confidential supervisory information, violating such Law or losing such privilege, (3) that would be materially adverse to the interests of the Company or any of its Subsidiaries in any pending or threatened Action unless the Company and the Investor execute a customary confidentiality agreement relating thereto or (4) that would constitute material non-public information for so long as the Company is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act, unless the Company and the Investor execute a customary confidentiality agreement relating thereto.

2.          AML, OFAC, Anti-Corruption.          For so long as the Investor holds an amount of Shares (including Shares the Investor has transferred to any of its Affiliates) equal to at least 50% of the Shares acquired by the Investor at the Closing of the Agreement, (the foregoing calculation to be adjusted as appropriate for stock splits or other comparable corporate actions), the Company shall, and shall cause each of the Company Subsidiaries and its and their respective officers, directors and employees to maintain and use commercially reasonable efforts to enforce policies and procedures reasonably designed to promote compliance with applicable AML Laws, Sanctions Laws, and Anti-Corruption Laws.

3.           Avoidance of Control.

(a)        Neither the Company nor any Company Subsidiary shall take any action (including any redemption, repurchase, or recapitalization of Voting Securities or Nonvoting Securities of the Company, or securities or rights, options or warrants to purchase Voting Securities or Nonvoting Securities of the Company, or securities of any type whatsoever that are, or may become, convertible into or exchangeable into or exercisable for Voting Securities or Nonvoting Securities of the Company, except where, solely with respect to any such redemption, repurchase or recapitalization of the Common Stock, the Investor is given the right to participate in such redemption, repurchase or recapitalization to the extent of the Investor’s pro rata proportion), that would cause (i) the Voting Securities “owned” or “controlled,” directly or indirectly, by the Investor or any Affiliate of the Investor for purposes of the Bank Holding Company Act, as amended (the “BHC Act”) and its implementing regulations (for the avoidance of doubt, excluding any securities owned or controlled in a fiduciary capacity, solely for trading purposes, pursuant to an underwriting commitment, in inventory in connection with market making activities, received in lieu of a debt previously contracted if disposed of within the time required by applicable law, and such other holdings as may not constitute ownership or control for purposes of the BHC Act, as determined from time to time by interpretations or guidance from the staff of the Board of Governors of the Federal Reserve (the “Federal Reserve”)) to increase above 4.9% of the total Voting Securities outstanding, or (ii) the Investor’s total aggregate ownership percentage of Voting Securities and Nonvoting Securities of the Company to exceed 24.9% of the total issued and outstanding equity of the Company, consistent with the restrictions set forth in the Federal Reserve’s guidance for non-controlling equity investments, without the prior written consent of the Investor; provided, that in the event of a sale, merger, consolidation or other similar transaction involving the Company following the Closing , the Company shall not take any action that would cause the Investor to own more than 4.9% of the total Voting Securities, or more than 24.9% of the total issued and outstanding equity, of the acquirer or surviving company, as applicable, following consummation of any such transaction.  For the purposes of this letter agreement, “Voting Securities” shall have such meaning as defined in 12 CFR 225.2(q)(1) and “Nonvoting Securities” shall have such meaning as defined in 12 CFR 225.2(q)(2), as may be amended or modified from time to time.

3

(b)         In the event that the Company breaches its obligations under this Section 3 or believes that it is reasonably likely to breach such obligations, it shall notify the Investor as promptly as reasonably practicable (and, to the extent applicable and reasonably practicable, prior to any such breach having occurred) and shall cooperate in good faith with the Investor to modify any ownership or other arrangements or take any other action, in each case, as is necessary to cure or avoid such breach.

4.           Transfer Rights.  Notwithstanding anything to the contrary in this letter agreement:

(a)         the Investor may at any time and from time to time transfer all or any part of its Shares to any third party, subject to the transfer restrictions set forth in the certificate of incorporation of the Company, and

(b)        The Investor (or any Affiliate to which the Investor has transferred Shares) may, at any time in its discretion, elect to voluntarily surrender to the Company any or all of the Shares (a “Voluntary Surrender”). The Company shall, upon written notice of the Investor’s intention to effect a Voluntary Surrender (the “Notice of Surrender”), accept the surrender of such Shares as a contribution to the Company for no consideration payable to or by the Investor. The Company shall accept all such Shares specified in the Notice of Surrender as soon as practicable, which surrendered Shares shall be retired by the Company for accounting purposes and treated as authorized but unissued shares of the Company. The exercise of a Voluntary Surrender shall be within the Investor’s sole and exclusive discretion and shall be in addition to, and not in lieu of, any other remedies available to the Investor under this letter agreement.

(c)          Any such transfer referred to in foregoing clauses (a) and (b) will be made in accordance with applicable federal and state securities laws.

5.          Wire Instructions. Pursuant to Section 1.2 of the Agreement, at the Closing, the Investor (or its designee) shall deliver payment of the Purchase Price to the Company by wire transfer of immediately available funds to the account set forth on Exhibit A, which such account information shall be delivered by the Company to the Investor at least three Business Days prior to the Closing.

6.          Further Assurances. The Company and the Investor each agree to execute and deliver, or cause its respective Affiliates to execute and deliver, such further documents and instruments and to take such further actions as may be necessary or desirable and reasonably requested by the other party to carry out the provisions of this letter agreement and perform the obligations herein in compliance with applicable law.

4

7.          Assignment. This letter agreement may not be assigned (in whole or in part) by the Investor without the prior written consent of the Company and any such assignment shall be void and of no force or effect.  Notwithstanding the foregoing, (i) this letter agreement may be assigned (in whole or in part) by the Investor to any of its Affiliates that may hold Shares from time to time.

8.          Termination. This letter agreement shall automatically terminate and be of no further force and effect upon (a) the date the Investor, or any Affiliate of the Investor, ceases to own any Shares or (b) the liquidation, dissolution or winding up of the Company, or execution by the Company of a general assignment for the benefit of creditors or the appointment of a receiver or trustee to take passion of the property or assets of the Company.

9.           Third Party Beneficiaries. Nothing contained in this letter agreement, expressed or implied, is intended to confer upon any Person other than the Parties (or any Affiliates of the Investor that may hold Shares from time to time), any benefit right or remedies.

10.         Miscellaneous.  Sections 6.3, 6.4, 6.5 6.6, 6.7, 6.8, 6.10, 6.11, 6.13, 6.14 and 6.15 of the Agreement are incorporated by reference into this letter agreement, mutatis mutandis.

[Signature Page Follows]

5

The parties have executed this letter agreement as of the date first set forth above.

THE COMPANY:
BROADWAY FINANCIAL CORPORATION
By:
---
(Signature)
--- ---
Name:
Title:

[Investor’s Rights Letter Agreement]

THE INVESTOR:
J.P. MORGAN CHASE COMMUNITY DEVELOPMENT CORPORATION
By:
---
(Signature)
--- ---
Name:
Title:

[Investor’s Rights Letter Agreement]

EXHIBIT B

FORM OF OPINION OF COMPANY COUNSEL

[   ], 2021

To J.P. Morgan Chase Community Development Corporation

Re: Class C Common Stock of Broadway Financial Corporation.

Ladies and Gentlemen:

This opinion is being furnished pursuant to Section 1.2(c)(ii)(F) of the Stock Purchase Agreement, dated as of February [   ], 2021 (the “Agreement”), by and between Broadway Financial Corporation, a Delaware corporation (the “Company”), and J.P. Morgan Chase Community Development Corporation, a Delaware corporation (the “Investor”).  Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed to them in the Agreement.

We have acted as counsel to the Company in connection with the preparation, execution and delivery of the Agreement and in connection with the issuance of the shares contemplated to be issued and sold pursuant to the Agreement.  As such counsel, we have examined and are familiar with and have relied upon the following documents:

(a) the Certificate of Incorporation of the Company, as amended to date (the “Certificate of Incorporation”) and the Bylaws of the Company, as amended to date (the “Bylaws”);
(b) a Certificate of the Secretary of State of the State of Delaware, dated February [   ], 2021, attesting to the continued legal existence and corporate good standing of the Company in Delaware (the “Domestic Certificate”);
--- ---
(c) a Secretary’s Certificate from the Company, dated as of the date hereof (the “Secretary’s Certificate”), attesting to the Company’s Bylaws, certain resolutions adopted by the board of directors of the Company, the<br> incumbency of certain officers of the Company;
--- ---
(d) a Certificate from a senior executive officer of the Company, dated as of the date hereof (the “Officer’s Certificate”), attesting to the accuracy of the Company’s representations and warranties in the Agreement, the<br> Company’s performance, satisfaction and compliance with all covenants, agreements and conditions required by the Agreement to be performed, satisfied or complied with by it at or prior to the Closing, no Material Adverse Effect<br> shall have occurred and no change or other event shall have occurred that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and as to certain other matters; and
--- ---
(e) the Agreement, the Investor’s Rights Letter Agreement dated as of the date hereof, by and between the Company and the Investor and the Exchange Agreement, dated as of the date hereof, by and between the Company and the Investor<br> (such agreements are collectively referred to as the “Transaction Agreements”).
--- ---

[   ], 2021

Page 2

In our examination of the documents described above, we have assumed the genuineness of all signatures, the legal capacity of all individual signatories, the completeness of all corporate and stock records provided to us, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies, and the authenticity of the originals of such latter documents.

In rendering this opinion, we have relied, as to all questions of fact material to this opinion, upon certificates of public officials, the Secretary’s Certificate and Officer’s Certificate and upon the representations and warranties made by the Investor and the Company in the Agreement.  We have not attempted to verify independently such facts.  We have not conducted a search of any electronic databases or the dockets of any court, administrative or regulatory body, agency or other filing office in any jurisdiction.

For purposes of this opinion, we have assumed that the Agreement has been duly authorized, executed and delivered by all parties thereto other than the Company, and that all such other parties have all requisite power and authority to effect the transactions contemplated by the Agreement.  We have also assumed that the Agreement is the valid and binding obligation of each party thereto other than the Company and is enforceable against such other parties in accordance with its terms.  We do not render any opinion as to the application of any federal or state law or regulation to the power, authority or competence of any party to the Agreement other than the Company.

For purposes of this opinion we have assumed that the board of directors of the Company has complied with its fiduciary duties in connection with the transactions contemplated by the Agreement.

Our opinions set forth below are qualified to the extent that they may be subject to or affected by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws relating to or affecting the rights of creditors generally, (ii) statutory or decisional law concerning recourse by creditors to security in the absence of notice or hearing, (iii) duties and standards imposed on creditors and parties to contracts, including, without limitation, requirements of good faith, reasonableness and fair dealing, and (iv) general equitable principles.  We express no opinion as to the availability of any equitable or specific remedy upon any breach of any of the agreements as to which we are opining herein, or any of the agreements, documents or obligations referred to therein, or to the successful assertion of any equitable defenses, inasmuch as the availability of such remedies or the success of any equitable defense may be subject to the discretion of a court.  Other than as specifically mentioned in our opinions below, our opinions do not cover any state securities or “blue sky” laws or regulations, any state or federal securities antifraud laws or regulations, any state or federal antitrust or unfair competition laws or regulations or any foreign trade or national security laws or regulations, including any relating to the Committee on Foreign Investment in the United States.

[   ], 2021

Page 3

We also express no opinion herein as to any provision of any agreement (a) which may be deemed to or construed to waive any right of the Company, (b) to the effect that rights and remedies are not exclusive, that every right or remedy is cumulative and may be exercised in addition to or with any other right or remedy and does not preclude recourse to one or more other rights or remedies, (c) relating to the effect of invalidity or unenforceability of any provision of the Agreement on the validity or enforceability of any other provision thereof, (d) requiring the payment of penalties, consequential damages or liquidated damages, (e) which is in violation of public policy, including, without limitation, any provision relating to indemnification and contribution with respect to securities law matters, (f) purporting to indemnify any person against his, her or its own negligence or intentional misconduct, (g) which provides that the terms of the Agreement may not be waived or modified except in writing or (h) relating to choice of law or consent to jurisdiction.

Our opinions expressed in paragraph 1 below, insofar as they relate to the valid existence, due qualification and good standing of the Company, are based solely on the Domestic Certificate and are limited accordingly, and, as to such matters, our opinions are rendered as of the date of the Domestic Certificate.  We express no opinion as to the tax good standing of the Company in any jurisdiction.

For purposes of our opinions in paragraphs 5 and 6 below, we have relied upon representations made by the Investor in Section 2.3 of the Agreement, and have assumed (without any independent investigation) the accuracy of such representations.  For purposes of our opinions in paragraphs 5 and 6 below, we have also assumed (without any independent investigation) that (i) in connection with the offer and sale of securities to the Investor, neither the Company nor any person acting on its behalf has engaged in any form of “general solicitation or general advertising” within the meaning contemplated by Rule 502 (c) of Regulation D and (ii) none of the persons or entities identified in Rule 506(d)(1) of Regulation D in respect of the Company has engaged in any of the disqualifying activities as described in such Rule that would prevent the Company from relying on Rule 506 of Regulation D or would require disclosure pursuant to Rule 506(e) of Regulation D.

We are opining herein solely as to the Delaware General Corporation Law (the “DGCL”), and the federal laws of the United States of America.

For purposes of our opinions rendered below, we have assumed that the facts and law governing the future performance by the Company of its obligations under the Agreement will be identical to the facts and law governing its performance on the date of this opinion.

Based upon and subject to the foregoing, we are of the opinion that:

1. The Company is a corporation validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to conduct its business as it is, to<br> our knowledge, currently conducted, to enter into and perform its obligations under the Transaction Agreements, and to carry out the transactions contemplated by the Transaction Agreements.
2. As of the date hereof,  the authorized Capital Stock of the Company consists of 75,000,000 shares of Class A Common Stock, par value $0.01 per share, 15,000,000 shares of non-voting Class B Common Stock, par value $0.01 per<br> share, 25,000,000 shares of non-voting Class C Common Stock, par value $0.01 per share (the “Class C Common Stock”) and 1,000,000 shares of serial Preferred Stock, par value $0.01 per share.
--- ---

[   ], 2021

Page 4

3. The Class C Common Stock has been duly authorized by all necessary corporate action on the part of the Company; and the Class C Common Stock, when issued, sold and delivered against payment therefor in accordance with the<br> provisions of the Agreement or when issued and delivered in exchange for Class A common shares in accordance with the Exchange Agreement will be duly and validly issued, fully paid and non-assessable.
4. The execution and delivery by the Company of the Transaction Agreements, and the consummation by the Company of the transactions contemplated thereby, have been duly authorized by all necessary corporate action on the part of the<br> Company, and the Transaction Agreements have been duly executed and delivered by the Company.  The Transaction Agreements constitute the valid and binding obligations of the Company, enforceable against the Company in accordance<br> with its terms.
--- ---
5. The execution and delivery by the Company of the Transaction Agreements, and the consummation by the Company of the transactions contemplated thereby, do not (a) violate the provisions of any U.S. federal or the DGCL; (b) violate<br> the provisions of the Company’s Certificate of Incorporation or Bylaws; (c) violate any judgment, decree, order or award of any court, governmental body or arbitrator specifically naming the Company of which we are aware;
--- ---
6. Based in part on the representations of the Investor in Section 2.3 of the Agreement, the offer, issuance and sale of the Class C Common Stock pursuant to the Agreement are exempt from registration under the Securities Act of<br> 1933, as amended, and from registration under all applicable Delaware state securities laws and regulations.
--- ---

This opinion is provided to the Investor as a legal opinion only and not as a guaranty or warranty of the matters discussed herein.  This opinion is based upon currently existing statutes, rules, regulations and judicial decisions and is rendered as of the date hereof, and we disclaim any obligation to advise you of any change in any of the foregoing sources of law or subsequent developments in law or changes in facts or circumstances which might affect any matters or opinions set forth herein.

This opinion is rendered only to the Investor and is solely for the benefit of the Investor in connection with the transactions contemplated by the Agreement.  This opinion may not be relied upon by the Investor for any other purpose, nor may this opinion be quoted to or relied upon by any other person or entity for any purpose without our prior written consent.

Very truly yours,
ARNOLD & PORTER LLP

EXHIBIT C

FORM OF EXCHANGE AGREEMENT

EXECUTION VERSION

SHARE EXCHANGE AGREEMENT

This Share Exchange Agreement (the “Agreement”) is made on the 6^th^ day of April, 2021, by and between Broadway Financial Corporation, a Delaware public benefit corporation (the “Company”), and J.P. Morgan Chase Community Development Corporation, a Delaware corporation (the “Stockholder”).

Introduction

WHEREAS, pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”), dated August 25, 2020, by and between the Company and CFBanc Corporation, a District of Columbia public benefit corporation (“CFB”), the parties thereto have provided for, among other things, (i) the merger of CFB with and into the Company, with the Company continuing as the surviving entity in the merger (the “Merger”),

            \(ii\) the merger, immediately following the Merger, of Broadway Federal Bank, f.s.b., a wholly owned subsidiary of the Company \(the “Bank”\), with and
              into City First Bank of D.C., National Association \(“CFB Sub”\), a wholly owned subsidiary of CFB \(the “Bank Merger” and together with the Merger and the other transactions contemplated by the Merger Agreement, the “Merger Transactions”\), with CFB Sub continuing as the surviving entity, and \(iii\) the renaming of the Company’s voting common stock, par value $0.01 per share, to Class A Common Stock \(“Class A Common Stock”\), the creation of a new class
            of non-voting common stock of the Company, par value $0.01 per share, as Class B Common Stock \(“Class B Common Stock”\) and the renaming of the Company’s currently authorized non-voting common stock, par value $0.01 per share, to
            Class C Common Stock \(the “Class C Common Stock” and collectively, the “Common Stock”\);

WHEREAS, prior to the consummation of the Merger Transactions the Stockholder held 50,000 shares of CFB’s voting common stock (the “Previous Holding”);

WHEREAS, by operation of the Merger Transactions, the Stockholder received 681,300 shares of Class A Common Stock for its Previous Holding;

WHEREAS, the consummation of the Merger Transactions is a condition to the closing of the transactions contemplated by the Stock Purchase Agreement, dated as of February 20, 2021, by and between the Company and the Stockholder (the “SPA”), pursuant to which the Stockholder is purchasing an additional 5,056,179 shares of Class C Common Stock;

WHEREAS, the Closing (as defined in Section 2 below) also is a condition to the closing of the transactions contemplated by the SPA;

WHEREAS, the Company and the Stockholder will also enter into an Investor’s Rights Letter Agreement with the Company as a condition to the closing of the transactions contemplated by the SPA (the “IRLA”);

WHEREAS, the parties acknowledge and agree that the transaction described herein is intended to be a non-taxable transaction for U.S. federal income tax purposes.

NOW THEREFORE, in consideration of the promises and mutual covenants herein set forth, and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto hereby mutually covenant and agree as follows:

1.           Exchange of Class A Common Stock for Class C Common Stock.  Pursuant to the terms and conditions of this Agreement, at the Closing, the Company will issue to the Stockholder 681,300 shares of Class C Common Stock (the “Replacement Shares”), and, in exchange therefor the Stockholder shall transfer to the Company or, if applicable, the transfer agent for the Replacement Shares, 681,300 shares of Class A Common Stock (the “Exchanged Shares”), free and clear of all liens, encumbrances, pledges and claims of any kind, accompanied by instruments of transfer sufficient to transfer such the Exchanged Shares to the Company.

2.           Closing.  The closing of the transactions contemplated by Section 1 above (the “Closing”) shall take place remotely via the exchange of documents and electronic signatures on the date hereof, or at such other time and place as the Company and the Stockholder mutually agree upon, orally or in writing, but in any event before the closing of the transactions contemplated by SPA.

3.           Company Representations. The Company represents and warrants to Investor as follows:

(a)         Organization; Qualification. The Company is a public benefit corporation duly incorporated and validly existing under the laws of the State of Delaware. The Company has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder.

(b)         Authorization; Valid and Binding Obligation. The board of directors of the Company has approved the transactions contemplated by this Agreement, and no other corporate approvals are necessary in connection with the consummation by the Company of the transactions contemplated hereby. The Replacement Shares, when issued and delivered against receipt of the Exchanged Shares 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.

4.           Stockholder Representations. The Stockholder represents and warrants to the Company as follows:

(a)          Authorization; Valid and Binding Obligation. The Stockholder 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 the Stockholder, enforceable against it in accordance with its terms, assuming the due authorization, execution and delivery hereof by the Company.

(b)         Title to Shares. The Stockholder 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 the Stockholder pursuant to this Agreement.

2

5.           Tax Treatment.  The parties acknowledge and agree that the transaction described herein is intended to be a non-taxable transaction for U.S. federal income tax purposes under Sections 368(a)(1)(E) and 1036(a) of the Internal Revenue Code of 1986, as amended.  Unless required by applicable law, the parties will not take a position contrary this Section 4 on any tax return or other interaction with a taxing authority.

6.          Amendments and Waivers.  This Agreement may be amended or terminated and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Stockholder.  No waivers of or exceptions to any term, condition or provision of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

7.           Counterparts; Facsimile Signatures.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same document.  This Agreement may be executed by facsimile signatures.

8.           Section Headings and References.  The section headings are for the convenience of the parties and in no way alter, modify, amend, limit or restrict the contractual obligations of the parties.  Any reference in this agreement to a particular section or subsection shall refer to a section or subsection of this Agreement, unless specified otherwise.

9.           Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

10.        Construction.  The parties hereto have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

11.         Severability.  If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

12.         Entire Agreement.  This Agreement supersedes all prior discussions, understandings and agreements between the parties with respect to the subject matter hereof and this Agreement, together with the other Transaction Agreements, contains the sole and entire agreement between the parties to this Agreement with respect to the subject matter hereof.

3

13.         Binding Effect; Assignment. The rights and obligations of this Agreement shall bind and inure to the benefit of the parties and their respective successors and permitted assigns. The rights and obligations of this Agreement may not be assigned by either of the parties hereto without the prior written consent of the other party, provided, however, that the rights and obligations of this Agreement may be assigned (in whole or in part) by the Investor to any of its Affiliates that may hold Shares from time to time. Any assignment in violation of this Section 13 shall be void and of no force or effect.

14.          Capitalized Terms. Capitalized terms defined in the preamble and recitals hereto have the meanings set forth in such definitions. Capitalized terms used but not otherwise defined in this Agreement have the meanings assigned to such terms in the SPA.

[Signature page follows]

4

Executed on the date first written above.

COMPANY:
BROADWAY FINANCIAL CORPORATION
By:
---
Name:
---
Title:

[Share Exchange Agreement]

STOCKHOLDER:
J.P. MORGAN CHASE COMMUNITY DEVELOPMENT CORPORATION
By:
---
Name:
---
Title:

[Share Exchange Agreement]

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in Registration Statements on Form S-8 (No. No. 333-218929 and No. 333‑229415) of our report dated March 31, 2021, relating to the consolidated financial statements of Broadway Financial Corporation and Subsidiary, which report appears in the Form 10-K of Broadway Financial Corporation for the year ended December 31, 2020, filed with the Securities and Exchange Commission.

/s/ Moss Adams LLP

Los Angeles, California

March 31, 2021

Exhibit 31.1

SECTION 302 CERTIFICATION

I, Wayne-Kent A. Bradshaw, certify that:

1. I have reviewed this annual report on Form 10-K of Broadway Financial Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not<br> misleading with respect to the period covered by this report;
--- ---
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and<br> for, the periods presented in this report;
--- ---
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting<br> (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
--- ---

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors<br> (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 31, 2021
/s/ Wayne-Kent A. Bradshaw
---
Wayne-Kent A. Bradshaw
Chief Executive Officer
Broadway Financial Corporation

Exhibit 31.2

SECTION 302 CERTIFICATION

I, Brenda Battey, certify that:

1. I have reviewed this annual report on Form 10-K of Broadway Financial Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not<br> misleading with respect to the period covered by this report;
--- ---
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and<br> for, the periods presented in this report;
--- ---
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting<br> (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
--- ---

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors<br> (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 31, 2021
/s/ Brenda J. Battey
---
Brenda J. Battey
Chief Financial Officer
Broadway Financial Corporation

Exhibit 32.1

SECTION 906 CERTIFICATION

The following statement is provided by the undersigned to accompany the foregoing Report on Form 10-K pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed filed pursuant to any provision of the Securities Exchange Act of 1934 or any other securities law.

The undersigned certifies that the foregoing Report on Form 10-K fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78) and that the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Broadway Financial Corporation as of and for the year ended December 31, 2020.

Date:  March 31, 2021 By: /s/ Wayne-Kent A. Bradshaw
Wayne-Kent A. Bradshaw
Chief Executive Officer
Broadway Financial Corporation

Exhibit 32.2

SECTION 906 CERTIFICATION

The following statement is provided by the undersigned to accompany the foregoing Report on Form 10-K pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed filed pursuant to any provision of the Securities Exchange Act of 1934 or any other securities law.

The undersigned certifies that the foregoing Report on Form 10-K fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78) and that the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Broadway Financial Corporation as of and for the year ended December 31, 2020.

Date:  March 31, 2021 By: /s/ Brenda J. Battey
Brenda J. Battey
Chief Financial Officer
Broadway Financial Corporation

Exhibit 99.4

TARP CERTIFICATION FOR YEAR 2020

I, Wayne-Kent A. Bradshaw, certify, based on my knowledge, that:

(i) The compensation committee of Broadway Financial Corporation has discussed, reviewed, and evaluated with senior risk officers at least every six months during any part of the most recently completed fiscal year that was a TARP period,<br> senior executive officer (“SEO”) compensation plans and employee compensation plans and the risks these plans pose to Broadway Financial Corporation;
(ii) The compensation committee of Broadway Financial Corporation has identified and limited during any part of the most recently completed fiscal year that was a TARP period any features in the SEO compensation plans that could lead SEOs to<br> take unnecessary and excessive risks that could threaten the value of Broadway Financial Corporation and identified any features in the employee compensation plans that pose risks to Broadway Financial Corporation and limited those features<br> to ensure that Broadway Financial Corporation is not unnecessarily exposed to risks;
--- ---
(iii) The compensation committee has reviewed, at least every six months during any part of the most recently completed fiscal year that was a TARP period, the terms of each employee compensation plan and identified the features in the plan<br> that could encourage the manipulation of reported earnings of Broadway Financial Corporation to enhance the compensation of an employee, and has limited these features that would encourage the manipulation of reported earnings of Broadway<br> Financial Corporation;
--- ---
(iv) The compensation committee of Broadway Financial Corporation will certify to the reviews of the SEO compensation plans and employee compensation plans required under (i) and (iii) above;
--- ---
(v) The compensation committee of Broadway Financial Corporation will provide a narrative description of how it limited during any part of the most recently completed fiscal year that was a TARP period the features in:
--- ---
a) SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of Broadway Financial Corporation;
--- ---
b) Employee compensation plans that unnecessarily expose Broadway Financial Corporation to risks; and
--- ---
c) Employee compensation plans that could encourage the manipulation of reported earnings of Broadway Financial Corporation to enhance the compensation of an employee;
--- ---
(vi) Broadway Financial Corporation has required that bonus payments to SEOs or any of the next twenty most highly compensated employees, as defined in the regulations and guidance established under section 111 of EESA (bonus payments), be<br> subject to a recovery or “clawback” provision during any part of the most recently completed fiscal year that was a TARP period if the bonus payments were based on materially inaccurate financial statements or any other materially<br> inaccurate performance metric criteria;
--- ---
(vii) Broadway Financial Corporation has prohibited any golden parachute payment, as defined in the regulations and guidance established under section 111 of EESA, to a SEO or any of the next five most highly compensated employees during any<br> part of the most recently completed fiscal year that was a TARP period;
--- ---
(viii) Broadway Financial Corporation has limited bonus payments to its applicable employees in accordance with section 111 of EESA and the regulations and guidance established thereunder during any part of the most recently completed fiscal<br> year that was a TARP period;
--- ---
(ix) Broadway Financial Corporation and its employees have complied with the excessive or luxury expenditures policy, as defined in the regulations and guidance established under section 111 of EESA, during any part of the most recently<br> completed fiscal year that was a TARP period, and that any expenses requiring approval of the board of directors, a committee of the board of directors, an SEO, or an executive officer with a similar level of responsibility were properly<br> approved;
--- ---
(x) Broadway Financial Corporation will permit a non-binding shareholder resolution in compliance with any applicable Federal securities rules and regulations on the disclosures provided under the Federal securities laws related to SEO<br> compensation paid or accrued during any part of the most recently completed fiscal year that was a TARP period;
(xi) Broadway Financial Corporation will disclose the amount, nature, and justification for the offering, during any part of the most recently completed fiscal year that was a TARP period, of any perquisites, as defined in the regulations and<br> guidance established under section 111 of EESA, whose total value exceeds $25,000 for each employee subject to the bonus payment limitations identified in paragraph (viii);
--- ---
(xii) Broadway Financial Corporation will disclose whether Broadway Financial Corporation, the board of directors of Broadway Financial Corporation, or the compensation committee of Broadway Financial Corporation has engaged during any part of<br> the most recently completed fiscal year that was a TARP period a compensation consultant; and the services the compensation consultant or any affiliate of the compensation consultant provided during this period;
--- ---
(xiii) Broadway Financial Corporation has prohibited the payment of any gross-ups, as defined in the regulations and guidance established under section 111 of EESA, to the SEOs and the next twenty most highly compensated employees during any<br> part of the most recently completed fiscal year that was a TARP period;
--- ---
(xiv) Broadway Financial Corporation has substantially complied with all other requirements related to employee compensation that are provided in the agreement between Broadway Financial Corporation and Treasury, including any amendments;
--- ---
(xv) Broadway Financial Corporation has submitted to Treasury a complete and accurate list of the SEOs and the twenty next most highly compensated employees for the current fiscal year, with the non-SEOs ranked in descending order of level of<br> annual compensation, and with the name, title, and employer of each SEO and most highly compensated employee identified; and
--- ---
(xvi) I understand that a knowing and willful false or fraudulent statement made in connection with this certification may be punished by fine, imprisonment, or both.
--- ---
Date: March 31, 2021
--- ---
/s/ Wayne-Kent A. Bradshaw
Wayne-Kent A. Bradshaw
Chief Executive Officer
Broadway Financial Corporation

Exhibit 99.5

TARP CERTIFICATION FOR YEAR 2020

I, Brenda Battey, certify, based on my knowledge, that:

(i) The compensation committee of Broadway Financial Corporation has discussed, reviewed, and evaluated with senior risk officers at least every six months during any part of the most recently completed fiscal year that was a TARP period,<br> senior executive officer (“SEO”) compensation plans and employee compensation plans and the risks these plans pose to Broadway Financial Corporation;
(ii) The compensation committee of Broadway Financial Corporation has identified and limited during any part of the most recently completed fiscal year that was a TARP period any features in the SEO compensation plans that could lead SEOs to<br> take unnecessary and excessive risks that could threaten the value of Broadway Financial Corporation and identified any features in the employee compensation plans that pose risks to Broadway Financial Corporation and limited those features<br> to ensure that Broadway Financial Corporation is not unnecessarily exposed to risks;
--- ---
(iii) The compensation committee has reviewed, at least every six months during any part of the most recently completed fiscal year that was a TARP period, the terms of each employee compensation plan and identified the features in the plan<br> that could encourage the manipulation of reported earnings of Broadway Financial Corporation to enhance the compensation of an employee, and has limited these features that would encourage the manipulation of reported earnings of Broadway<br> Financial Corporation;
--- ---
(iv) The compensation committee of Broadway Financial Corporation will certify to the reviews of the SEO compensation plans and employee compensation plans required under (i) and (iii) above;
--- ---
(v) The compensation committee of Broadway Financial Corporation will provide a narrative description of how it limited during any part of the most recently completed fiscal year that was a TARP period the features in:
--- ---
a) SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of Broadway Financial Corporation;
--- ---
b) Employee compensation plans that unnecessarily expose Broadway Financial Corporation to risks; and
--- ---
c) Employee compensation plans that could encourage the manipulation of reported earnings of Broadway Financial Corporation to enhance the compensation of an employee;
--- ---
(vi) Broadway Financial Corporation has required that bonus payments to SEOs or any of the next twenty most highly compensated employees, as defined in the regulations and guidance established under section 111 of EESA (bonus payments), be<br> subject to a recovery or “clawback” provision during any part of the most recently completed fiscal year that was a TARP period if the bonus payments were based on materially inaccurate financial statements or any other materially<br> inaccurate performance metric criteria;
--- ---
(vii) Broadway Financial Corporation has prohibited any golden parachute payment, as defined in the regulations and guidance established under section 111 of EESA, to a SEO or any of the next five most highly compensated employees during any<br> part of the most recently completed fiscal year that was a TARP period;
--- ---
(viii) Broadway Financial Corporation has limited bonus payments to its applicable employees in accordance with section 111 of EESA and the regulations and guidance established thereunder during any part of the most recently completed fiscal<br> year that was a TARP period;
--- ---
(ix) Broadway Financial Corporation and its employees have complied with the excessive or luxury expenditures policy, as defined in the regulations and guidance established under section 111 of EESA, during any part of the most recently<br> completed fiscal year that was a TARP period, and that any expenses requiring approval of the board of directors, a committee of the board of directors, an SEO, or an executive officer with a similar level of responsibility were properly<br> approved;
--- ---
(x) Broadway Financial Corporation will permit a non-binding shareholder resolution in compliance with any applicable Federal securities rules and regulations on the disclosures provided under the Federal securities laws related to SEO<br> compensation paid or accrued during any part of the most recently completed fiscal year that was a TARP period;
(xi) Broadway Financial Corporation will disclose the amount, nature, and justification for the offering, during any part of the most recently completed fiscal year that was a TARP period, of any perquisites, as defined in the regulations and<br> guidance established under section 111 of EESA, whose total value exceeds $25,000 for each employee subject to the bonus payment limitations identified in paragraph (viii);
--- ---
(xii) Broadway Financial Corporation will disclose whether Broadway Financial Corporation, the board of directors of Broadway Financial Corporation, or the compensation committee of Broadway Financial Corporation has engaged during any part of<br> the most recently completed fiscal year that was a TARP period a compensation consultant; and the services the compensation consultant or any affiliate of the compensation consultant provided during this period;
--- ---
(xiii) Broadway Financial Corporation has prohibited the payment of any gross-ups, as defined in the regulations and guidance established under section 111 of EESA, to the SEOs and the next twenty most highly compensated employees during any<br> part of the most recently completed fiscal year that was a TARP period;
--- ---
(xiv) Broadway Financial Corporation has substantially complied with all other requirements related to employee compensation that are provided in the agreement between Broadway Financial Corporation and Treasury, including any amendments;
--- ---
(xv) Broadway Financial Corporation has submitted to Treasury a complete and accurate list of the SEOs and the twenty next most highly compensated employees for the current fiscal year, with the non-SEOs ranked in descending order of level of<br> annual compensation, and with the name, title, and employer of each SEO and most highly compensated employee identified; and
--- ---
(xvi) I understand that a knowing and willful false or fraudulent statement made in connection with this certification may be punished by fine, imprisonment, or both.
--- ---
Date: March 31, 2021
--- ---
/s/ Brenda J. Battey
Brenda J. Battey
Chief Financial Officer
Broadway Financial Corporation

Report a Problem

Category
Description
Email (optional, for follow-up)