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| BYFC > SEC Filings for BYFC > Form 8-K on 19-Nov-2008 | All Recent SEC Filings |
19-Nov-2008
Entry into a Material Definitive Agreement, Unregistered Sale of Equ
On November 14, 2008, as part of the Capital Purchase Program (the "CPP")of the United States Department of the Treasury (the "UST"), Broadway Financial Corporation (the "Company") entered into a Letter Agreement, incorporating an attached Securities Purchase Agreement - Standard Terms (collectively, the "Securities Purchase Agreement") with the UST. Under the Securities Purchase Agreement, the Company agreed to sell 9,000 shares of the Company's Fixed Rate Cumulative Perpetual Preferred Stock, Series D (the "Senior Preferred Stock"), having a liquidation preference of $1,000 per share, for a total price of $9,000,000,000. The Senior Preferred Stock will pay cumulative dividends at the rate of 5% per year for the first five years and 9% per year thereafter. The shares are callable by the Company at par after three years if the repurchase is made with newly raised common equity capital.
Prior to the third anniversary of the UST's purchase of the Senior Preferred Stock, unless Senior Preferred Stock has been redeemed or the UST has transferred all of the Senior Preferred Stock to third parties, the consent of the UST will be required for the Company to increase its Common Stock dividend or repurchase its Common Stock or other equity or capital securities. The Senior Preferred Stock will be non-voting except for class voting rights on matters that would adversely affect the rights of the holders of the Senior Preferred Stock. The Securities Purchase Agreement is attached thereto is attached as Exhibit 10.16 hereto and is incorporated herein by reference.
In conjunction with the purchase of the Company's Senior Preferred Stock, UST received a warrant (the "Warrant") to purchase 183,175 shares of Company common stock (the "Warrant Shares") at $7.37 per share, which would represent an aggregate common stock investment in the Company on exercise of the Warrant in full equal to $1.35 million or 15 percent of the senior preferred investment. The term of the Warrant is ten years.
Both the Senior Preferred Stock and Warrant will be accounted for as components of Tier 1 capital.
The Senior Preferred Stock and the Warrant were issued in a private placement
exempt from registration under the Securities Act of 1933 pursuant to
Section 4(2) of that Act. . The Company has agreed to register resales of the
Senior Preferred Stock and the Warrant, and issuances and resales of the Warrant
Shares, as soon as practicable after the date of the issuance of the Senior
Preferred Stock and the Warrant.
The information concerning the issuance and sale of Senior Preferred Stock and the Warrant set forth under "Item 1.01 Entry into a Material Definitive Agreement" is incorporated herein by reference.
On November 14, 2008 the Company filed a Certificate of Designations with the Delaware Secretary of State for the purpose of amending its Certificate of Incorporation to establish the designation, rights, preferences, limitations and privileges of the Senior Preferred Stock. The
On November 14, 2008, the Company issued a press release announcing the consummation of the transactions described above under "Item 1.01. Entry into a Material Definitive Agreement." A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
3.3 Certificate of Designations for Fixed Rate Cumulative Perpetual Preferred Stock, Series D
4.8 Form of Series D Preferred Stock Certificate
4.9 Warrant to Purchase Common Stock
10.16 Letter Agreement, dated November 14, 2008, between the Company and the UST, which includes the Securities Purchase Agreement attached thereto, with respect to the issuance and sale of the Senior Preferred Stock and the Warrant Letter Agreement
99.1 Press release dated November 14, 2008
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