00 ne ONFIDENTIAL TREATEMENT REQUESTED
The Goldman Sachs Group, Inc. | 200 West Street w York, New York 10282

“Tel: 212-902-1000 | Fax: ease Bsos qold man
sachs

June 27, 2011

The Goldman Sachs Group, Inc. and GSUIG Real Estate Member LLC (each, a
“Goldman Acquirer”), and their subsidiaries and affiliates (collectively, “Goldman
Acquirer Group”), will not, without the prior approval of the Board or its staff, directly or
indirectly:

L Exercise or attempt to exercise a controlling influence over the management or
policies of Carver Bancorp, Inc. (“Carver”), New York, New: York, or any of its
subsidiaries;

2. Have or seek to have a representative of Goldman Acquirer Group serve on the
board of directors of Carver or any of its subsidiaries;

3. Have or seek to have any employee or representative of Goldman Acquirer Group
serve as an officer, agent, or employee of Carver or any of its subsidiaries;

4. Take any action that would cause Carver or any of its subsidiaries to become a
subsidiary of Goldman Acquirer Group;

5. Own, control, or hold with power to vote securities that (when aggregated with
securities that the officers and directors of Goldman Acquirer Group own, control, or
hold with power to vote) represent 25 percent or more of any class of voting securities of
Carver or any of its subsidiaries;

6. Own or control equity interests that would result in the combined voting and
nonvoting equity interests of Goldman Acquirer Group and its officers and directors to
equal or exceed 25 percent of the total equity capital of Carver or any of its subsidiaries,
except that, if Goldman Acquirer Group and its officers and directors own, hold, or have
the power to vote less than 15 percent of the outstanding shares of any classes of voting
securities of Carver, Goldman Acquirer Group and its officers and directors may own or
control equity interests greater than 25 percent, but in no case more than 33.3 percent, of
the total equity capital of Carver or any of its subsidiaries;

7. Propose a director or slate of directors in opposition to a nominee or slate of
nominees proposed by the management or board of directors of Carver or any of its
subsidiaries;

8. Enter into any agreement with Carver or any of its subsidiaries that substantially
limits the discretion of Carver’s management over major policies and decisions,
including, but not limited to, policies or decisions about employing and compensating
executive officers; engaging in new business lines; raising additional debt or equity


CONFIDENTIAL TREATEM
The Goldman Sachs Group, Inc. | 200 West Street | New York, New York 10282

‘Fel: 212-902-1000 | Fax: 212-357-5505

oldman
achs

GSUIG REAL ESTATE MEMBER LLC
BY: The Goldman Sachs Group, Inc.
its sole member

BY: ZV
Namet Elizabeth Robinson

Title: Authorized Signatory


-4-

To address the possibility of a controlling influence developing in the future, the Board
retains the authority to review the investment and relationships regularly to determine whether,
under all the facts and circumstances, any investor, or any group of investors, are acting in a
manner that suggests it has control of, or the ability to exercise a controlling influence over,
Carver for purposes of the BHC Act. If you have any questions about this matter, please contact
Anna M. Harrington, Attorney (202-452-6406), Christopher M. Paridon, Senior Attorney
(202-452-3274), or Kathleen M. O’Day, Deputy General Counsel (202-452-3786), of the
Board’s Legal Division.

Sincerely,

both,

ce: Office of Thrift Supervision


‘The Goldman & 6 1200 West strest| CONFIDENTIAL TREATEMENT REQUESTED

1e Goldman Sachs Group, Inc. | 200 West Street | New York, New York 10282

“Tel: 212-902-1000 | Fax: 212-357-5605 Gold man
achs

capital; merging or consolidating with another firm; or acquiring, selling, leasing,
transferring, or disposing of material assets, subsidiaries, or other entities;

9. Solicit or participate in soliciting proxies with respect to any matter presented to
the shareholders of Carver or any of its subsidiaries;

10. Dispose or threaten to dispose (explicitly or implicitly) of equity interests of
Carver or any of its subsidiaries in any manner as a condition or inducement of specific
action or non-action by Carver or any of its subsidiaries; or

11. Enter into any other banking or nonbanking transactions with Carver or any of its
subsidiaries, except that Goldman Acquirer Group may (1) establish and maintain deposit
accounts with Carver, provided that the aggregate balance of all such deposit accounts
does not exceed $500,000 and that the accounts are maintained on substantially the same
terms as those prevailing for comparable accounts of persons unaffiliated with Carver;
and (2) enter into arm’s length transactions, projects, or joint ventures that either (a)
qualify as public welfare activities under 12 CFR 24, or (b)(i) if undertaken by an insured
depository institution subsidiary of a Goldman Acquirer, are undertaken to enhance the
performance of that insured. depository institution subsidiary of a Goldman Acquirer
under any of the performance tests under the regulations implementing the Community
Reinvestment Act and (ii) if undertaken by a Goldman Acquirer or an affiliate or
subsidiary of a Goldman Acquirer that is not an insured depository institution, meet the
definition of community development loans, qualified investments, or community
development services under the regulations implementing the Community Reinvestment
Act (12 CFR 228.12(h), (i), and (t)); provided that, in the aggregate, such transactions,
projects or joint ventures do not provide to Carver more than five (5) percent of Carver’s
total consolidated annual revenue in its most recent fiscal year.

The terms used in these commitments have the same meanings as set forth in the Bank
Holding Company Act of 1956, as amended, and the Board’s Regulation Y.

Nothing in these commitments releases Goldman Acquirer Group from compliance with
the Change in Bank Control Act and the Board’s regulations thereunder for any
subsequent acquisition or increase in the percentage ownership of any class of voting
shares of Carver.

Each Goldman Acquirer understands that these commitments constitute conditions
imposed in writing in connection with the Board’s findings and decisions related to
Goldman Acquirer Group’s acquisition of up to 4.9 percent of voting shares of Carver,
including a determination that no filing under the Bank Holding Company Act is required
for this transaction by Goldman Acquirer Group, and, as such, may be enforced in
proceedings under applicable law.


BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM

WASHINGTON, D. C. 20551

SCOTT G. ALVAREZ
GENERAL COUNSEL

June 29, 2011

Michael T. Escue, Esq.
Sullivan & Cromwell

125 Broad Street

New York, New York 10004

Dear Mr. Escue:

This letter relates to your request that The Goldman Sachs Group, Inc., New York, New
York, and its subsidiaries and affiliates (collectively, “Goldman”), would not be deemed to
control Carver Bancorp, Inc. (“Carver”), and its wholly owned insured depository institution
subsidiary, Carver Federal Savings Bank (“Carver FSB”), both of New York, New York, for
purposes of the Bank Holding Company Act of 1956, as amended, as a result of its investment in
Carver. There are multiple investors participating in the recapitalization of Carver.

Based on the facts and representations provided to the Board, we understand the
following:

* Goldman would receive newly issued Series C mandatorily convertible preferred
shares, which, on conversion, would result in Goldman owning less than 5 percent of
Carver’s outstanding voting shares and up to 19.9 percent of its total equity (through
ownership of newly issued Series D convertible nonvoting preferred shares).

« Goldman is not affiliated with any other investor in Carver.

« The Series C convertible preferred shares acquired by Goldman may convert into no
more than 4.9 percent of the voting shares of Carver in Goldman’s hands or in the
hands of any direct or indirect transferee of Goldman.

« The Series D convertible preferred shares acquired by Goldman upon conversion of
Series C are nonvoting shares that convert automatically into voting common shares
on certain transfers to a third party. The Series D shares cannot convert into voting
shares in Goldman’s hands at any time.

e Goldman will not have representation on Carver’s or Carver FSB’s board of directors,
or any employee interlocks with Carver or Carver FSB.

} Under Delaware law, the Series D nonvoting shares retain rights to vote on matters that would
significantly and adversely affect the rights and preferences of the shareholders. Shares with
such limited rights meet the definition of nonvoting shares in the Board’s Regulation Y.

See 12 CFR 225.2(q)(2)(i).


CONFIDENTIAL TREATEMENT REQUESTED
The Goldman Sachs Group, inc. | 200 West Street | New York, New York 10282
Tek: 212-902-1000 | Fax: 212-357-5505 gold man
Sachs

THE GOLDMAN SACHS GROUP, INC.

Name: Elizabeth Robinson
Title: Authorized Signatory


-2-

In September 2008, the Board revised its policy statement regarding equity investments
in banks, bank holding companies, and nonbanking firms.’ The Board’s Policy Statement states
that nonvoting shares that are convertible into voting shares carry less influence when such
shares may not be converted into voting shares in the hands of the investor and may only be
transferred by the investor: (i) to an affiliate of the investor or to the nonbanking organization;
{ii) in a widespread public distribution; (iii) in transfers in which no transferee (or group of
associated transferees) would receive 2 percent or more of any class of voting securities of the
nonbanking organization; or (iv) to a transferee that would control more than 50 percent of the
voting securities of the nonbanking organization without any transfer from the investor.

The Series D nonvoting convertible preferred shares that Goldman may hold may not be
converted in Goldman’s hands. In addition, as noted above, the certificate of designation limits
Goldman’s ability to transfer those shares to third parties to methods that are consistent with the
Policy Statement. Accordingly, the transfer restrictions effectively limit the influence over
Carver that such shares might otherwise confer on Goldman.

Under the BHC Act, a “company” includes any bank, corporation, general or limited
partnership, association or similar organization, business trust, or any other trust that does not
terminate within the specified time frame in the statute.? The Board has stated that a group of
unrelated companies or individuals may constitute a single company for purposes of the BHC
Act if such group exhibits a “formalized structure” that functions like a separate corporate entity
for the purpose of acquiring, managing, and controlling a depository institution.* The Board has
looked to various indicia as evidence of such an association, including the existence of written
agreements among the shareholders that materially limit such shareholder’s ability to vote,
transfer or control their shares of an insured depository institution or its holding company. In the
instant case, none of the agreements that have been presented to the Board contain provisions
that unduly restrict an investor’s ability to vote, transfer, or otherwise control its shares of
Carver, and no other indicia of an association appears in the record.°

Additionally, Goldman has stated that it does not propose to contro! or exercise a
controlling influence over Carver and that its investment is a passive investment. Accordingly,
Goldman has provided commitments substantially similar to those on which the Board has

2 See Policy statement on equity investments in banks and bank holding companies
(Sept. 21, 2008) (“Policy Statement”).

3 12 USC § 1841(b); 12 CFR 225.2(d)(1).

4 WISCUB, Inc., 65 Federal Reserve Bulletin 773 (1979); see also Letter from Theodore E.
Allison to John P. Roemer, September 13, 1977, re: Tri City National Bank of West Allis, aff'd,
Central Bank v. Board of Governors, No. 77-1937 at 5 (D.C. Cir. 1978).

5 Goldman and the other investors entered into a stock purchase agreement and stockholder
rights agreement with Carver. The stock purchase agreements set forth the terms under which
the investors may purchase shares in Carver. The stockholder rights agreement sets forth
relevant registration procedures and requirements for shares of Carver, as well as provides
investors with certain “piggyback registration” rights and provides the company with a “right of
first refusal” related to the recapitalization.



-3-

previously relied in determining that an investing bank holding company would not be able to
exercise a controlling influence over a nonbanking organization for purposes of the BHC Act.

For purposes of the BHC Act, a company has control over another company if the first
company (i) directly or indirectly or acting through one or more other persons owns, controls, or
has power to vote 25 percent or more of any class of voting securities of the other company;

(ii) controls in any manner the election of a majority of the directors of the other company; or
(iii) directly or indirectly exercises a controlling influence over the management or policies of
the other company.® The Board’s Regulation Y also sets forth a set of rebuttable presumptions
of control.” Goldman’s investment would not trigger any of the rebuttable presumptions of
control in Regulation Y with respect to Carver as a result of the transaction.

The Board noted in its 2008 policy statement regarding equity investments in banks,
bank holding companies, and nonbanking firms that minority investors have avoided exercising a
controlling influence over a nonbanking organization by, among other means, restricting the size
of their voting and total equity investment in the nonbanking organization; avoiding agreements
that restrict the ability of the nonbanking organization’s management to determine the major
policies and operations of the nonbanking organization; not attempting to influence the
nonbanking organization’s process for making decisions about major policies and operations;
limiting director and officer interlocks with the nonbanking organization; and significantly
limiting business relationships between the investor and the nonbanking organization.* The
Board typically has been concemed that a company could exercise a controlling influence over
control of an insured depository institution for BHC Act purposes if the company has invested in
the organization and has significant business relationships with the organization.

In this case, staff would not at this time recommend that the Board find Goldman to be
acting as part of an association with regard to Carver or to have a controlling influence over the
management or policies of Carver, for purposes of the BHC Act, based on the current structure
of Goldman’s proposed investment. This recommendation could change, however, if the facts or
relationships between Goldman and Carver (or its affiliates) or the other investors change in any
material way.

In reaching this opinion, staff relied on all the facts of record, including all the
representations and commitments made by or on behalf of Goldman and Carver (whether noted
in this letter or otherwise contained in correspondence with the Board). In this regard, you
should advise Board staff immediately of any material changes in the facts noted above.

§ 12 U.S.C. § 1841(a)(2); 12 CFR 225.2(e).
7 See 12 CFR 225.31(d).
8 See Policy Statement.