Document:

EX-10.1

 Exhibit 10.1 

EXECUTION VERSION 
  

 
  

STOCK PURCHASE AGREEMENT 

by and between 
 Carver Bancorp,
Inc. 
 and 
 J.P. Morgan
Chase Community Development Corporation 
 dated as of 

February 16, 2021 
  

 
  

 TABLE OF CONTENTS 
  

							
	 	 	 	  	Page	 
	 1.  Purchase of the Stock
	  	 	1	 
			
	 1.1
	 	Purchase of the Stock	  	 	1	 
	 1.2
	 	Closing	  	 	1	 
		
	 2.  Representations and Warranties of the Company
	  	 	2	 
			
	 2.1

	 	Organization, Good Standing and Authorization	  	 	2	 
	 2.2
	 	Capitalization	  	 	3	 
	 2.3
	 	No Conflicts	  	 	4	 
	 2.4
	 	Subsidiaries; Investments	  	 	4	 
	 2.5
	 	Financial Statements	  	 	5	 
	 2.6
	 	Undisclosed Liabilities	  	 	5	 
	 2.7
	 	Tax Matters	  	 	5	 
	 2.8
	 	Actions; Orders	  	 	6	 
	 2.9
	 	Compliance with Laws; Governmental Authorizations	  	 	6	 
	 2.10
	 	Investment Company Act	  	 	6	 
	 2.11
	 	No Broker	  	 	6	 
	 2.12
	 	Anti-Money Laundering, Anti-Corruption, Sanctions	  	 	6	 
	 2.13
	 	Valid Issuance of Shares	  	 	7	 
	 2.14
	 	Intellectual Property	  	 	7	 
	 2.15
	 	Exchange Listing	  	 	8	 
		
	 3.  Representations and Warranties of the Investor
	  	 	8	 
			
	 3.1
	 	Organization, Good Standing and Authorization	  	 	8	 
	 3.2
	 	Investment Representations	  	 	8	 
	 3.3
	 	No Broker	  	 	9	 
		
	 4.  Covenants of the Company and the Investor
	  	 	9	 
			
	 4.1
	 	Corporate Actions for the Issuance of the Shares and Performance of Other Obligations	  	 	9	 
	 4.2
	 	Use of Proceeds	  	 	9	 
	 4.3
	 	Access to Information	  	 	10	 
	 4.4
	 	Expenses	  	 	11	 
	 4.5
	 	Publicity	  	 	11	 
	 4.6
	 	Preemptive Rights	  	 	11	 
	 4.7
	 	BHC Act Control	  	 	11	 
	 4.8
	 	Transfer Rights	  	 	13	 
	 4.9
	 	FIRPTA Certificate	  	 	13	 
	 4.10
	 	Opinion of Company Counsel	  	 	13	 
	 4.11
	 	Officer’s Certificate	  	 	13	 
	 4.12
	 	Secretary’s Certificate	  	 	14	 
	 4.13
	 	Anti-Money Laundering, Anti-Corruption, Sanctions	  	 	14	 
	 4.14
	 	Rule 144 Reporting	  	 	14	 

  
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	 5.  Termination
	  	 	14	 
			
	 5.1
	 	Termination	  	 	14	 
	 5.2
	 	Effect of Termination	  	 	15	 
		
	 6.  Miscellaneous
	  	 	15	 
			
	 6.1
	 	Notices	  	 	15	 
	 6.2
	 	Governing Law; Consent to Jurisdiction	  	 	16	 
	 6.3
	 	Binding Effect	  	 	17	 
	 6.4
	 	Assignment	  	 	17	 
	 6.5
	 	Amendment, Waivers	  	 	17	 
	 6.6
	 	Entire Agreement	  	 	17	 
	 6.7
	 	Survival	  	 	17	 
	 6.8
	 	Severability	  	 	17	 
	 6.9
	 	Headings	  	 	17	 
	 6.10
	 	Counterparts	  	 	17	 
	 6.11
	 	No Implied Rights	  	 	18	 
	 6.12
	 	Recognition of the U.S. Special Resolutions Regimes	  	 	18	 

 Schedules 

Schedule A: Term Sheet 
 Schedule B: Wire Instructions 

Schedule C: Significant Subsidiaries 
 Schedule D: Form of Opinion
of Company Counsel 

  
 ii 

 STOCK PURCHASE AGREEMENT 

THIS AGREEMENT (this “Agreement”) is made and entered into as of the 16th day of February, 2021, by and between Carver
Bancorp, Inc., a Delaware corporation (the “Company”), and J.P. Morgan Chase Community Development Corporation, a Delaware corporation (the “Investor”). 

W I T N E S E T H : 

WHEREAS, the Company desires to issue and sell to the Investor, and the Investor desires to purchase from the Company, the shares of the
Company’s common stock, par value $0.01 per share (the “Common Stock” and such shares of Common Stock, the “Common Shares”) and Non-Cumulative Non-Voting Participating Preferred Stock, Series F, par value $0.01 per share (the “Series F Preferred Stock” and such shares of Series F Preferred Stock, the “Preferred
Shares” and, together with the Common Shares, the “Shares”), the terms of which are set forth in the Term Sheet attached as Schedule A hereto; 

WHEREAS, the Company operates predominately through its wholly owned banking Subsidiary (as defined below) Carver Federal Savings Bank, a
minority-owned depository institution organized under the laws of the United States as a federal savings bank (the “Bank”); and 

WHEREAS, the Investor is committed to supporting economic growth in the diverse communities in which the Company and the Bank operate and
providing direction to the Company and Bank in support of their objectives to provide financial services to underserved populations. 
 NOW,
THEREFORE, the parties hereto hereby agree as follows. 
 1. Purchase of the Stock. 

1.1 Purchase of the Stock. Subject to the terms and conditions set forth in this Agreement, the Company shall issue and sell to the
Investor, and the Investor shall purchase from the Company, the Common Shares and the Preferred Shares at the respective purchase prices as set forth on Schedule A hereto (the “Purchase Price”). 

1.2 Closing. The closing of the sale and purchase of the Shares (the “Closing”) shall take place at the offices of Luse
Gorman PC, located at 5335 Wisconsin Ave NW # 780, Washington, DC 20015, or remotely via the electronic or other exchange of documents and signature pages, at such place, time or date as the parties hereto may agree (the time and date of the Closing
being herein referred to as the “Closing Date”). 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 (as set forth
on Schedule B attached hereto) and against payment by the Investor, the Company will deliver to the Investor a receipt or similar record confirming that the Shares, which shall be in book-entry form, have been registered in the name of the
Investor in the Company’s stock register. 

 2. Representations and Warranties of the Company. 

As used in this Article 2, (i) any reference to any event, change or effect being “material” with respect to the
Company or any of the Company Subsidiaries (as defined below) means an event, circumstance, development, change or effect which is material in relation to the business, condition or results of operations of the Company and the Company Subsidiaries,
taken as a whole, and (ii) the term “Material Adverse Effect” means 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; provided, however, that, with respect to the Company, a Material Adverse Effect shall not include an effect resulting from (a) any change in law or GAAP (as defined in Section 2.5(b) hereof)
or interpretations thereof that applies to the Company or any Company Subsidiary, (b) any change in general economic, business, financial or credit market conditions, (c) changes after the date hereof in global or United States or foreign
national or regional economic, financial, regulatory or geopolitical conditions or events, or (d) disasters, calamities, weather conditions, similar events, any military conflict, act of terrorism, outbreak or escalation of hostilities or
declared or undeclared war or any other force majeure event, except to the extent any such change, event, occurrence, fact, effect or condition has a disproportionate adverse effect on business, results of operations or financial condition of the
Company and its Subsidiaries, taken as a whole, as compared to other persons similarly situated in the same industry. 
 The Company
represents and warrants to the Investor as of the date hereof and at the time of payment and delivery of the Purchase Price (the “Time of Payment and Delivery”) as follows: 

2.1 Organization, Good Standing and Authorization. 

(a) The Company and each Company Subsidiary is an entity duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, with full power and authority to perform its obligations under this Agreement. The Company and each Company Subsidiary is duly qualified or licensed to do business as a foreign entity and is in good standing in each
jurisdiction in which either the ownership or use of the properties owned or used by it or the nature of the activities conducted by it requires such licensing, qualification or good standing, except for any failure to be so licensed, qualified or
be in such good standing which could not be reasonably expected to have a Material Adverse Effect. The Company has furnished to the Investor true, correct and complete copies of its 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 as a savings and loan holding company under the Home Owners’ Loan Act of 1934, as amended. Each of the Company and the Bank
is, and will continue to be, duly certified as a “Community Development Financial Institution” by the U.S. Department of the Treasury’s Community Development Financial Institutions Fund.  

(a) The Schedule of Subsidiaries, attached hereto as Schedule C, sets forth a true and complete list of all Subsidiaries (as defined
below) of the Company (each hereinafter referred to individually as a “Company Subsidiary” and collectively as the “Company Subsidiaries”). For purposes of this Agreement, the term “Subsidiary”
shall mean with respect to any Person (as defined below), any corporation or other entity of which such Person has, directly or indirectly, ownership of securities or other interests having the power to elect a majority of

  
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such corporation’s or other entity’s board of directors (or similar governing body), or otherwise having the power to direct the business and policies of such corporation or other
entity. For purposes of this Agreement, the term “Person” shall mean any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability
company, governmental entity, joint venture, estate, trust, association, organization or other entity of any kind or nature. 
 (b) The
Company has the requisite corporate power and authority and has taken all corporate action necessary in order to execute, deliver and perform its obligations hereunder. This Agreement has been duly executed and delivered by the Company and
constitutes the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, moratorium, fraudulent transfer and other laws affecting creditors’ rights and to
general equity principles. 
 2.2 Capitalization. 

(a) The authorized capital stock of the Company consists of (i) 10,000,000 shares of Common Stock, of which 3,220,656 shares of Common Stock
are issued and outstanding, and (ii) 2,000,000 shares of the Company’s preferred stock (the “Preferred Stock” and together with the Common Stock, the “Capital Stock”), of which 17,601 shares of Preferred Stock
designated as Convertible Non-Cumulative Non-Voting Participating Preferred Stock, Series D are issued and outstanding, 3,300 are designated as Non-Cumulative Non-Voting Participating Preferred Stock, Series E (the “Series E Preferred Stock”), of which 3,177 are issued and outstanding, and 5,000 are
designated as Series F Preferred Stock, of which none are issued and outstanding. All of the issued and outstanding shares of Capital Stock of the Company have been duly authorized and are validly issued, fully paid and nonassessable. As of the date
hereof, all of the shares of Series A Convertible Preferred Stock, par value $0.01 per share, Series B Convertible Preferred Stock, par value $0.01 per share, and Mandatorily Convertible Non-Voting
Participating Preferred Stock, Series C, par value $0.01 per share, have been repurchased, redeemed or converted in accordance with all applicable laws and there are no ongoing obligations with respect to such securities. Except for 250,000 shares
reserved for issuance pursuant to the Carver Bancorp, Inc. 2014 Equity Plan, as of the date hereof, the Company has not issued and does not have any shares of Capital Stock reserved for issuance or otherwise issuable (without regard to any vesting
requirements) under any equity awards, equity compensation, deferred compensation or similar arrangements (including any stock options or restricted stock awards). Company does not have any issued and outstanding bonds, debentures, notes or other
indebtedness that grant the right to vote on any matters on which the shareholders of the Company may vote. 
 (b) There are no shares of
Capital Stock or other securities of the Company reserved for issuance or subject to preemptive rights (other than such preemptive rights granted to Wells Fargo Central Pacific Holding, Inc. (“Wells Fargo”), pursuant to that certain
Stock Purchase Agreement, dated as of February 1, 2021, by and between the Company and Wells Fargo, which such rights have been duly waived) or any outstanding subscriptions, options, warrants, calls, rights, convertible securities or other
agreements or other instruments outstanding or in effect giving any Person the right to acquire any shares of Capital Stock or other securities of the Company or any commitments of any character relating to the issued or unissued Capital Stock or
other securities of the Company. 

  
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 2.3 No Conflicts. The execution and delivery by the Company of this Agreement does
not, and the performance and consummation by the Company of the transactions contemplated hereby will not: 
 (a) contravene, conflict with,
or constitute or result in a breach or violation of, or a default under any of the Company’s organizational documents; 
 (b)
contravene, conflict with, or constitute or result in a breach or violation of, or a default under, any material agreement under which the Company or any of the Company Subsidiaries is bound or to which any materials assets thereof are subject; or

 (c) contravene, conflict with, or constitute or result in a breach or violation of any law, judgment, decree or order of any court,
administrative agency, governmental entity or other tribunal of competent jurisdiction (“Order”) to which the Company is subject. 

2.4 Subsidiaries; Investments. 

(a) Except for the Subsidiaries of the Company set forth in Schedule B hereto, the Company does not own any shares of capital stock or
other equity or voting securities of, or similar interest in, any other Person. The Company does not act or carry on business in partnership with any other Person, nor is it a member with ownership interests (otherwise than through the holding of
share capital) of any corporate entity. 
 (b) The Company owns, either directly or indirectly through one or more subsidiaries, all of the
capital stock or other equity interests of the Subsidiaries free and clear of all Liens, other than transfer restrictions imposed by applicable Laws. All of the issued and outstanding shares of capital stock or other equity interests of each of the
Subsidiaries held directly or indirectly by the Company have been duly authorized and are validly issued, fully paid and nonassessable. There are no shares of capital stock or other securities of any of the Company Subsidiaries reserved for issuance
or subject to preemptive rights or any outstanding subscriptions, options, warrants, calls, rights, convertible securities or other agreements or other instruments outstanding or in effect giving any Person the right to acquire any shares of capital
stock or other securities of any of the Company Subsidiaries or any commitments of any character relating to the issued or unissued capital stock or other securities of any Company Subsidiary. 

(c) Each of the Company Subsidiaries is a corporation, limited liability company, partnership, business association or other Person duly
organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the requisite power and authority to carry on its business as it is now being conducted except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each of the Subsidiaries is duly qualified and licensed to do business, and is in good standing, in each jurisdiction where the character of its assets owned or held under lease or
the nature of the business conducted by it makes such qualification necessary except where the failures of all of such Company Subsidiaries to so qualify or be licensed has not and would not, individually or in

  
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the aggregate, reasonably be expected to have a Material Adverse Effect. The deposit accounts of the Bank are insured by the Federal Deposit Insurance Corporation 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 Bank has a Community Reinvestment Act rating of “satisfactory” or better. The Bank is, and will continue to be, duly qualified as a “minority-owned depository institution” (as defined in Section 308 of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989). 
 2.5 Financial Statements. 

(a) The Investor has been furnished with the (i) audited consolidated balance sheet of the Company as at the end of the two most recently
completed fiscal years for which financial statements are available as of the date of this Agreement, (ii) audited consolidated statements of income, changes in stockholders’ equity and cash flows of the Company for each of the two most
recently completed fiscal years for which financial statements are available as of the date of this Agreement, (iii) unaudited consolidated balance sheet of the Company as at the end of the most recently completed quarter for which financial
statements are available as of the date of this Agreement (the “Base Balance Sheet Date”), and (iv) unaudited statements of income and cash flows for the nine-month period ended as of the Base Balance Sheet Date (collectively,
the “Financial Statements”), including the notes thereto, together with the report thereon of the Company’s independent certified public accountants. 

(b) The Financial Statements and notes fairly present the financial condition and the results of operations, changes in stockholders’
equity and cash flows of the Company as at the respective dates of and for the periods referred to in such Financial Statements, all in accordance with the United States generally accepted accounting principles (“GAAP”) applied on a
consistent basis during the periods presented. 
 2.6 Undisclosed Liabilities. The Company does not have any liabilities other than
those (i) reflected or reserved against in the Financial Statements (including the notes thereto) or (ii) incurred in the ordinary course of business since the Base Balance Sheet Date. 

2.7 Tax Matters. The Company has prepared and timely filed (including extensions that have been duly perfected) all income tax returns
and all other tax returns required to be filed by it and all such tax returns were true, correct and complete in all material respects. The Company has paid all taxes due and owing by it (whether or not shown on any tax return as due). As of the
date of this Agreement, there are not pending or threatened in writing, any audits, examinations, investigations or other proceedings in respect of U.S. federal income or other material tax matters. The Company’s presentation of its deferred
tax assets and deferred tax liabilities on its Financial Statements is accurate in all material respects. The sum of accrued but unpaid taxes of the Company did not, as of the Base Balance Sheet Date, exceed the reserve of taxes set forth on the
face of the most recent financial statements. There are no material liens for taxes on any of the assets of the Company or Company Subsidiaries. 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 

  
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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 or a collapsible corporation pursuant to Section 1362(a) or Section 341(f) of the Code. The Company and each
Company Subsidiary has not participated in any “listed transactions” as defined under Treasury Regulations § 1.6011-4(b)(2) (or otherwise participated in, or advised on, any transaction that
required disclosure to a taxing authority to reduce or eliminate tax, interest or penalties). Each of the Company and the Company Subsidiaries has complied with all applicable Laws related to the payment and withholding of material Taxes and has
duly and timey paid over to the appropriate taxing authorities all material amounts required to be so withheld and paid over. 
 2.8
Actions; Orders. There are no material civil, criminal or administrative actions, demands, claims or other similar proceedings (“Actions”) or Orders issued, pending or, to the knowledge of the Company, threatened, against the
Company or any Company Subsidiary or any of their respective assets, before any governmental entity. 
 2.9 Compliance with Laws;
Governmental Authorizations. The Company and each Company Subsidiary has complied in all material respects with the laws applicable to it or to the conduct or operation of its business or the ownership or use of any of its assets. The Company
and each Company Subsidiary possesses, all permits, licenses, franchises, approvals, certificates, consents, waivers, concessions, exemptions, Orders, registrations, notices or other authorizations of any governmental authority necessary for the
Company or Company Subsidiary to own, lease and operate its properties and to carry on its business as currently conducted (the “Permits”) and each such Permit is in full force and effect and are currently being, and have been,
complied with in all material respects. 
 2.10 Investment Company Act. Neither the Company nor any of the Company Subsidiaries is an
“investment company” or an “affiliated person” thereof or an “affiliated person” of any such “affiliated person,” as such terms are defined in the Investment Company Act of 1940, as amended. 

2.11 No Broker. The Company has not retained, or authorized to act on its behalf, any broker, finder, agent or like party who would be
entitled to any fee or commission in connection with the transactions contemplated by this Agreement. 
 2.12 Anti-Money Laundering,
Anti-Corruption, Sanctions. 
 The Company, Company Subsidiaries and its and their respective officers, directors, employees and agents are in
compliance with all applicable (i) anti-money laundering laws and laws designed to prevent terrorist financing (collectively, “AML Laws”), (ii) international trade, economic sanctions, and export controls and any other
requirement applicable for any import, export controls and economic sanctions laws and regulations (collectively, “Sanctions Laws”), and (iii) anti-bribery and anti-corruption laws (collectively, “Anti-Corruption
Laws”). No action, suit or proceeding by or before any court, or government agency, authority or body, or any arbitrator or nongovernmental authority involving the Company or any Company Subsidiary with respect to AML Laws, Sanctions Laws,
or Anti-Corruption Laws is pending, or to the 

  
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knowledge of the Company, threatened. Each of the Company and Company Subsidiaries have implemented and shall maintain systems of internal controls (including accounting systems, purchasing
systems and billing systems) and have adopted and shall maintain policies and procedures that collectively ensure compliance with all AML Laws, Sanctions Laws, and Anti-Corruption Laws. Additionally, the Company maintains an AML-BSA compliance program as required under the relevant laws and regulations in the U.S., including the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001, and other applicable laws where the Company
operates. The Company represents that none of it, Company Subsidiaries, and its and their respective directors, officers, employees and (to the Company’s knowledge) agents is a Sanctioned Person. 

(a) Definitions. As used in this Section 2.12: 

(i) “Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced
from time to time by the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or other relevant sanctions authority; 

(ii) “Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or
target of any Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North Korea, Sudan and Syria); and 
 (iii)
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of
State or other relevant sanctions authority, (b) any Person operating, 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).

 2.13 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 of the
Investor in Section 3, the Shares will be issued in compliance with all applicable federal and state securities laws. 

2.14 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. No product or service of the Company or
the Company Subsidiaries infringes the Intellectual Property Rights of others. 

  
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 2.15 Exchange Listing. The Common Shares are eligible for trading on the Nasdaq Stock
Market and no further action is needed for the Shares to trade on the Nasdaq Stock Market subject to any applicable securities laws. 
 3.
Representations and Warranties of the Investor. 
 The Investor represents and warrants to the Company and the Bank as of the date
hereof: 
 3.1 Organization, Good Standing and Authorization.

(a) The Investor is an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, with
full power and authority to perform its obligations under this Agreement. The Investor is duly qualified or licensed to do business as a foreign entity and is in good standing in each jurisdiction in which either the ownership or use of the
properties owned or used by it or the nature of the activities conducted by it requires such licensing, qualification or good standing, except for any failure to be so licensed, qualified or be in such good standing which could not be reasonably
expected to have a material adverse effect on the Investor and its Subsidiaries, taken as a whole. 
 (b) The Investor has the requisite
corporate power and authority and has taken all corporate action necessary in order to execute, deliver and perform its obligations hereunder. This Agreement has been duly executed and delivered by the Investor and constitutes the valid and binding
agreement of the Investor, enforceable against the Investor in accordance with its terms, subject to bankruptcy, insolvency, moratorium, fraudulent transfer and other laws affecting creditors’ rights and to general equity principles. 

3.2 Investment Representations. The Investor understands that the Shares have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”). The Investor also understands that the Shares are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Investor’s representations
contained in this Agreement, as follows: 
 (a) Information. The Investor has had an opportunity to ask the Company’s
representatives questions regarding the offer and sale of the Shares and the terms related thereto, the Company’s business and operations, and other relevant matters, and to receive answers from them. The Company has given the Investor the
opportunity to fully perform the Investor’s own due diligence. The foregoing, however, does not limit or modify the representations or warranties of the Company in Section 2 or the right of the Investor to rely
thereon. 
 (b) Accredited Investor. The Investor is an “accredited investor” (as defined under Rule 501 of Regulation D
under the Securities Act), capable of evaluating the merits and risks of an investment in the Shares and of protecting the Investor’s own interest in connection with the purchase of Shares. 

(c) Adequate Means. The Investor has adequate means to provide for its financial needs with no expectation of a return on its investment
in the Shares. 

  
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 (d) No Registration. The Investor understands that the Shares have not been
registered under the Securities Act and, therefore, cannot be resold unless it is registered under the Securities Act or unless an exemption from such registration requirement is available. Investor is aware that the Company is not under any
obligation to effect any such registration with respect to the Shares or to file for or comply with any exemption from registration. 
 (e)
Legend. The Investor understands that the Shares may be notated with the following legend: 
 “THE SHARES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT COVERING THE TRANSFER OR AN
OPINION OF COUNSEL OR OTHER EVIDENCE OF COMPLIANCE WITH THE ACT SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER SAID ACT IS NOT REQUIRED.” 

(f) Acquisition for Investment. The Investor is acquiring the Shares for the Investor’s own account, for investment only and not
with a view toward their resale or distribution, and Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. 

3.3 No Broker. The Investor has not retained, or authorized to act on its behalf, any broker, finder, agent or like party who would be
entitled to any fee or commission in connection with the transactions contemplated by this Agreement. 
 4. Covenants of the Company and
the Investor. 
 4.1 Corporate Actions for the Issuance of the Shares and Performance
of Other Obligations. Prior to the Closing, the Company shall take all corporate actions necessary or appropriate to validly issue, sell and deliver the Shares to the Investor in accordance with the terms of this Agreement. The Company shall
ensure that the terms set forth on Schedule A attached will be duly and promptly incorporated into the Company’s organizational documents and other agreements with stockholders, as applicable, and shall promptly share such executed
documentation with the Investor. 
 4.2 Use of Proceeds. The Company shall use the net proceeds received by it from the sale of the
Shares for the purposes set forth on Schedule A hereto. Furthermore, the Company shall not use, or cause to be used, and shall procure that Company Subsidiaries and its and their respective directors, officers, employees and agents, shall not use,
or cause to be used, the proceeds from any capital investment made by Investor: 
 (a) in furtherance of an offer, payment, promise to pay,
or authorization of the payment or giving of money, or anything else of value, to any Person in violation of Anti-Corruption Laws; or 

  
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 (b) for the purpose of funding, financing or facilitating any activities, business or
transaction of or with any Sanctioned Person, or in any Sanctioned Country, to the extent such activities, business or transaction would be prohibited by Sanctions if conducted by a corporation incorporated in the United States, or in any manner
that would result in the violation of any Sanctions applicable to any party hereto. 
 4.3 Access to Information. 

(a) The Company shall permit the Investor, in a manner designed to not interfere with the normal business operations of the Company, 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. 
 (b) The Company shall deliver to the Investor the following, unless already available on the United States Securities and Exchange
Commission’s (the “SEC”) Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”) 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 (including the fourth quarter of each fiscal year), an unaudited consolidated income statement and an unaudited consolidated balance sheet as of the end of such fiscal quarter (or unaudited unconsolidated income statement
and unaudited unconsolidated balance sheet of the Company and, the Company Subsidiaries), in each case prepared in accordance with GAAP; 

(iii) 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, and (B) any event that has caused, or may reasonably be expected to cause, the Bank to fail to qualify as a “minority-owned depository institution”; 

(iv) prompt notice that the Company or the Bank has fallen, or anticipates that it may at any time in the succeeding 180 days
fall, below any minimum capital tier (i.e., well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized or critically undercapitalized) within the meaning of any state or federal regulations applicable to the Company
or the Bank; and 

  
 10 

 (v) any information relating to the financial condition or business and
affairs of the Company or the Company Subsidiaries that the Investor may from time to time reasonably request (for the avoidance of doubt, solely to the extent such information is reasonably available). 

Notwithstanding anything in this Agreement to the contrary, the Company shall not be obligated pursuant to Sections 4.3(a) or
(b)(iii) though (v) to provide information that it reasonably considers to be confidential supervisory information, confidential competitive information or for which it reasonably determines the disclosure of which will violate
applicable law (including applicable bank secrecy laws and similar legislation) or result in the loss of any legal 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, violating such law or losing such privilege. 

4.4 Expenses. Except as otherwise expressly provided herein, whether or not the transactions contemplated hereby are consummated, all
costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expense. 

4.5 Publicity. This Agreement and its terms and the transactions contemplated hereby shall be kept confidential until the parties hereto
mutually agree upon the language and timing of a press release, or until such time as one such party determines, based upon the advice of counsel, that a public announcement is required by law, in which case the parties hereto shall in good faith
attempt to agree on any public announcements or publicity statements with respect thereto. Notwithstanding the foregoing, the Company shall make any required regulatory filings, registrations and disclosures pursuant to applicable federal, state or
local law, including filings pursuant to Regulation D of the Securities Act. 
 4.6 Preemptive Rights. The Company shall provide the
Investor with written notice of any proposed issuance (the “Issuance Notice”) by the Company of any voting Capital Stock or other equity interests in the Company or any Capital Stock or other equity interests convertible or
exchangeable into, or granting the right to purchase or otherwise receive, voting Capital Stock or other equity interests in the Company (collectively, the “Voting Stock”) at least 15 days prior to the proposed issuance date. The
Issuance Notice shall specify the price at which such Voting Stock are to be issued and the other material terms of the issuance (including the terms of the Voting Stock proposed to be issued). The Company shall be entitled to purchase up to the
number of Voting Stock such that the Investor would maintain its percentage voting interest in the Company, on a fully-diluted and as-converted basis, as of immediately prior to the proposed issuance. If the
Investor desires to purchase any such Voting Stock, it shall deliver a written notice to the Company of such election to purchase within ten days after receipt of the Issuance Notice. 

4.7 BHC Act Control. 
 (a)
Neither the Company nor the 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, 

  
 11 

 
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, 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 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. 
 (b) In the event that the Company breaches its obligations under
Section 4.7(a) or believes that it is reasonably likely to breach such obligations, it shall notify the Investor as promptly as practicable (and, to the extent applicable, 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, in accordance with Sections 4.7(c) and 4.7(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 BHC Act or other applicable law or regulatory or supervisory guidance for the Investor to continue to hold, directly or indirectly, without limitation or otherwise, any Shares, or (B) such continued holding of the 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 (C) a determination by the Investor, based on the advice of

  
 12 

 
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. 
 4.8 Transfer Rights. 

(a) The Investor may at any time and from time to time transfer all or any part of its Shares to any third party. 

(b) The Investor (or any Affiliate to which the Investor has transferred Shares) may, at any time in its discretion, including in connection
with any Regulatory Trigger Event, 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 Agreement. 
 4.9
FIRPTA Certificate. Prior to the Closing, the Company shall deliver to the Investor either (i) a validly executed Internal Revenue Service Form W-9, or (ii) a statement meeting the
requirements of Treasury Regulations Section 1.1445-2(b)(2) to the effect that the Company is not a “foreign person” as defined under such Treasury Regulations. 

4.10 Opinion of Company Counsel. Prior to the Closing, Luse Gorman PC, counsel for the Company shall deliver to the Investor an opinion,
dated as of the Closing Date, in substantially the form of Schedule D attached hereto. 
 4.11 Officer’s
Certificate. Prior to the Closing, an Officer of the Company shall deliver to the Investor a certificate certifying (i) that the representations and warranties of the Company contained in Section 2 are true as of the date hereof and as
of the Time of Payment and Delivery, and (ii) the Company shall have performed and complied in all material respects with all covenants, agreements and obligations contained in this Agreement that are required to be performed or complied with
by it on or prior to the Closing, in accordance with Section 4.1. 

  
 13 

 4.12 Secretary’s Certificate. Prior to the Closing, the Secretary
of the Company shall deliver to the Investor a certificate certifying (i) the Certificate of Incorporation of the Company, as amended to date, (ii) the Bylaws of the Company and (iii) resolutions of the board of directors of the
Company approving the Agreement and the transactions contemplated under the Agreement. 
 4.13 Anti-Money Laundering, Anti-Corruption,
Sanctions. The Company shall, and cause each of Company Subsidiaries and its and their respective officers, directors, employees and agents to, comply with all applicable (i) AML Laws, (ii) Sanctions Laws, and
(iii) Anti-Corruption Laws. In addition, the Company shall inform Investor in writing promptly after receiving any written notice of any inquiry or request from any governmental authority relating to whether the Company or Company Subsidiaries
are in compliance with any applicable laws (each, a “Regulatory Inquiry”). As to any such Regulatory Inquiry, the Company shall keep Investor reasonably informed following any related developments. The Company will promptly notify
Investor of any event or occurrence with respect to the Company or any Company Subsidiary that would result in a violation of any (A) Anti-Corruption Laws; (B) AML Laws; or (C) Sanctions Laws. 

4.14 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 Securities Exchange Act of 1934, as amended; (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. 
 5. Termination. 

5.1 Termination. This Agreement may not be terminated prior to the Time of Payment and Delivery except by the written agreement of the
Company and the Investor. 

  
 14 

 5.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 5.1, all further obligations of the parties under this Agreement shall terminate, except for the obligations which are intended, expressly or impliedly, to survive the termination of this Agreement. 

6. Miscellaneous. 
 6.1
Notices. All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (i) delivered personally,
(ii) mailed by certified or registered airmail with postage prepaid, (iii) sent by next-day or overnight mail or delivery or (iv) sent by email (provided a confirmation copy is sent by one of
the other methods set forth above), as follows: 
 As to the Company: 

Carver Bancorp, Inc. 
 75 West 125th Street 
 New York, NY 10027 

Attention:     Isaac Torres, General Counsel 

Email:           Isaac.torres@carverbank.com 

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

Luse Gorman PC 
 5335 Wisconsin
Avenue NW, Suite 780 
 Washington, DC 20015 

Attention:     Lawrence M. F. Spaccasi 

Email:           lspaccasi@luselaw.com 

As to the Investor: 
 J.P. Morgan
Chase Community Development Corporation 
 c/o JPMorgan Chase Bank, N.A. 

237 Park Avenue, 7th Floor 

New York, NY 10017-3140 

Attention:     Andrew T. Guida, Managing Director 

Email:           andrew.t.guida@jpmorgan.com 

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

JPMorgan Chase Legal Department. 

4 New York Plaza, Floor 19 
 New
York, NY 10004-2413 
 Attention:     Cris T. Kako, Associate General Counsel 

Email:           cris.kako@jpmchase.com 

  
 15 

 with a 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 

Attention:     Lisa Firenze 

Email:          Lisa.Firenze@WilmerHale.com 

or, in each case, at such other address as may be specified in writing to the other parties to this Agreement pursuant to this
Section 6.1. 
 6.2 Governing Law; Consent to Jurisdiction. 

(a) This Agreement and any dispute, claim, suit, action or proceeding of whatever nature arising out of or in any way related to it or its
formation (including any non-contractual disputes or claims) are governed by, and shall be construed in accordance with, the internal laws of the State of Delaware, without regard to the conflict of laws
principles thereof to the extent that such principles would direct a matter to another jurisdiction. 
 (b) Each party hereto agrees that it
shall bring any action or proceeding in respect of any claim arising out of or related to this Agreement exclusively the courts of the State of Delaware and the Federal courts of the United States of America located in the State of Delaware (the
“Chosen Courts”), and solely in connection with claims arising under this Agreement (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in any such action
or proceeding in the Chosen Courts, (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party hereto and (iv) agrees that service of process upon such party in any such action or
proceeding shall be effective if notice is given in accordance with Section 6.1. Each of the parties hereto agrees that a final judgment in any lawsuit, action or other proceeding arising out of or relating to this
Agreement brought in the Chosen Courts shall be conclusive and binding upon each of the parties hereto and may be enforced in any other courts the jurisdiction of which each of the parties is or may be subject, by suit upon such judgment. 

(c) WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE PARTIES HERETO HEREBY
WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT, OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, CAUSE OF ACTION, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR BASED UPON
THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT OR TORT OR OTHERWISE. ANY OF THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 6.2 WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH OF THE PARTIES HERETO TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY. 

  
 16 

 6.3 Binding Effect. Except as otherwise provided herein, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and permitted assigns. 
 6.4
Assignment. Except as otherwise provided herein, this Agreement shall not be assignable or otherwise transferable by any party hereto without the prior written consent of the other party hereto (such consent not to be unreasonably delayed,
conditioned or withheld), and any purported assignment or other transfer without such consent shall be void and unenforceable; provided, however, that Investor may assign all of its rights and obligations to an affiliate of the
Investor that may hold Shares from time to time. 
 6.5 Amendment, Waivers. 

(a) This Agreement may be amended only by an instrument in writing signed by the parties. Any provision of this Agreement may be waived if, but
only if, such waiver is in writing and is signed by each party against whom the waiver is to be effective. 
 (b) No failure or delay by any
party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. 
 6.6 Entire
Agreement. This Agreement constitutes the entire agreement among the parties hereto and supersedes all prior agreements and understandings, both written and oral, among such parties with respect to the subject matter hereof. In the event of any
conflict between this Agreement and the Term Sheet attached as Schedule A hereto, the terms of this Agreement shall prevail. 
 6.7
Survival. The covenants, agreements, representations and warranties set forth in Articles 2, 3 and 4 shall survive the Time of Payment and Delivery. 

6.8 Severability. If any provision, including any phrase, sentence, clause, section or subsection, of this Agreement is invalid,
inoperative or unenforceable as for or against any party hereto for any reason, such circumstances shall not have the effect of rendering such provision in question invalid, inoperative or unenforceable in any other case or circumstance or as for or
against the other parties hereto, or of rendering any other provision herein contained invalid, inoperative, or unenforceable to any extent whatsoever. 

6.9 Headings. The headings contained in this Agreement are for purposes of convenience only and shall not affect the meaning or
interpretation of this Agreement. 
 6.10 Counterparts. This Agreement may be executed and delivered by facsimile or electronic
signatures and in several counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including .pdf or any electronic
signature complying with the U.S. federal ESIGN Act of 2000, e.g. www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have ben duly and validly delivered and be valid and effective for all
purposes. 

  
 17 

 6.11 No Implied Rights. Except as otherwise expressly provided herein, nothing herein
is intended to or shall be construed to confer upon or give to any Person, other than the parties hereto and their affiliates, any interests, rights, remedies or other benefits with respect to or in connection with any agreement or provision
contained herein or contemplated hereby. 
 6.12 Recognition of the U.S. Special Resolutions Regimes. 

(a) In the event that the Investor is a Covered Entity and becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer
from the Investor of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such
interest and obligation, were governed by the laws of the United States or a state of the United States. 
 (b) In the event that Investor or
a BHC Act Affiliate of Investor becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against the Investor are permitted to be exercised to no greater extent than such
Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States. 

(c) Definitions. As used in this Section 6.12: 

(i) “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be
interpreted in accordance with, 12 U.S.C. § 1841(k); 
 (ii) “Covered Entity” means any of the
following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b), (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R.
§ 47.3(b) or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); 

(iii) “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with,
12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.; and 
 (iv) “U.S. Special Resolution Regime”
means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder. 

[Signature Pages Follow] 

  
 18 

 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date
first above written. 
  

			
	CARVER BANCORP, INC.
		
	By:	 	 /s/ Michael T. Pugh

		 	 Name: Michael T. Pugh
 Title: President and
Chief Executive Officer

	
	J.P. MORGAN CHASE COMMUNITY DEVELOPMENT CORPORATION 
		
	By:	 	 /s/ Andrew T. Guida

		 	 Name: Andrew T. Guida
 Title: Managing
Director

 [Signature Page to Stock Purchase Agreement]a20201231-exhibit101

          Domestic Relocation  1          Discovery, Inc.      Domestic Relocation Benefits  Transformation Relocation Policy  Tier 1 Executive Bands 0-3      Effective January 1, 2018                    

 

          Domestic Relocation  2  All Summary terms specified above are subject to the detailed terms in the attached policy.  Tier 1 Executive (Bands 0-3) - Domestic Relocation Summary    Pre-Acceptance Trip - One trip with spouse/partner, up to five days to destination; lodging,  economy transportation, meals. Area Tour provided by relocation vendor.  Not subject to  relocation budget.    Relocation Budget:  Executive selects from benefits listed below, available only for expenses  incurred and expensed within one year of Transfer Date (as defined by your business unit and  HRM), up to $250,000 net     Eligible Dependents (as defined on page 7) Included    Home Sale – Buyer Value Option - Marketing assistance and normal and customary  closing costs OR   Renter Early Lease Cancellation Penalties - Reimbursement of documented expenses    Home Finding Trip – Up to two trips with spouse/partner and eligible dependents up to  five days each; lodging, economy transportation, meals and childcare reimbursement    Destination Services - Help finding a home, schools, and settling in     Home Purchase – Normal and customary closing costs  Home Rental – Assistance with securing rental property in host location, Finder’s  fees/broker commissions    Duplicate Housing – Up to 6 months of mortgage interest expenses   Temporary Living - Up to 6 months in furnished accommodations    Shipment of Household Goods - Up to 30,000 pounds, storage up to 6 months, and  transportation of up to two autos if distance exceeds 300 miles     Final Move Expenses - Transportation, mileage, lodging and meals, airfare if move  distance greater than 300 miles    Spouse/Partner Assistance - Outplacement/Job search assistance up to $5,000 net    Pet Relocation Expenses - Reimbursement of expenses up to $5,000 net    Lump Sum Allowance - Cash allowance to help defray some relocation-related expenses  outside of the specific Relocation Budget items, up to $15,000 net if available within  Relocation Budget     Additional Payments to Executive (in addition to Relocation Budget)   - $3,000 net for each eligible dependent   - $10,000 net for relocations into New York and Los Angeles     Days off for Relocation - Up to three paid days for relocation activities, in addition to Pre- Acceptance and Home Finding trips    Tax Assistance - Gross up of taxable relocation expenses (as defined on page 9) not counted  toward Relocation Budget   

 

          Domestic Relocation  3  Table of Contents  Table of Contents ........................................................................................................................................ 3  Introduction ................................................................................................................................................ 5  How to Use This Guide ........................................................................................................................................... 5  Relocation Counselor .................................................................................................................................. 6  Planning....................................................................................................................................................... 6  Pre-Acceptance Trip .................................................................................................................................... 6  Defining your Benefit Package .................................................................................................................... 7  General Terms and Conditions ................................................................................................................... 7  Eligibility ................................................................................................................................................................. 7  Eligible Dependents .................................................................................................................................... 7  Confidentiality ........................................................................................................................................................ 8  Personal Data Protection ....................................................................................................................................... 8  Interpretation & Changes in Benefits .................................................................................................................... 8  Effective Date ......................................................................................................................................................... 8  Effective Transfer Date .......................................................................................................................................... 8  Exceptions .............................................................................................................................................................. 9  Relocation Repayment Agreement  ............................................................................................................ 9  Expense Reimbursement ............................................................................................................................ 9  Home Sale – Buyer Value Option .............................................................................................................. 10  Marketing Assistance ........................................................................................................................................... 12  Listing Your Home ................................................................................................................................................ 13  Marketing Updates .............................................................................................................................................. 13  Inspections ........................................................................................................................................................... 13  Repair Allowance ................................................................................................................................................. 14  Title Search ........................................................................................................................................................... 14  Receiving an Offer From an Outside Buyer ......................................................................................................... 14  Closing the Sale with the Relocation Vendor....................................................................................................... 15  Expenses Not Covered ......................................................................................................................................... 15  Home Finding Trip ..................................................................................................................................... 16  Destination Assistance .............................................................................................................................. 16  Home Purchase Assistance ....................................................................................................................... 17  Home Purchase Inspection .................................................................................................................................. 17  

 

Domestic Relocation  4  New Home Mortgage........................................................................................................................................... 17  Preferred Lenders ................................................................................................................................................ 18  Rental Home Finding ............................................................................................................................................ 19  Duplicate Housing ..................................................................................................................................... 19  Moving Household Goods ......................................................................................................................... 20  Valuation Protection ............................................................................................................................................ 21  Vehicles ................................................................................................................................................................ 21  In-transit Storage ................................................................................................................................................. 21  Final Move Travel ...................................................................................................................................... 22  Temporary Living Pre-Departure & Post-Arrival ....................................................................................... 22  Spouse/Partner Assistance ....................................................................................................................... 23  Pet Transportation Expenses .................................................................................................................... 23  Lump Sum Allowance ................................................................................................................................ 24  Additional Payments Outside of Relocation Budget ................................................................................ 24  For Dependents.................................................................................................................................................... 24  For Relocations to New York City and Los Angeles.............................................................................................. 25  Days off for Relocation.............................................................................................................................. 25  Tax Assistance ........................................................................................................................................... 25  Gross-Up Assistance ............................................................................................................................................. 25  Child Tax Credit .................................................................................................................................................... 25  Tax Summary ............................................................................................................................................. 27  Reduction in Force/Workforce Restructuring Subsequent to Transfer Date ........................................... 28  Benefit entitlements include: .............................................................................................................................. 28  

 

          Domestic Relocation  5  Introduction  Congratulations! You are off on an exciting adventure and we want to help prepare you for what’s  ahead. This guide is designed to educate you about the benefits to offset some of your expenses  associated with your relocation. Please be aware that the guide provides a general summary of  benefits.     We want you to feel supported, inspired and motivated to perform at your best – because it’s only  together that we can ignite curiosity in audiences in every corner of the globe.    There are numerous personal, legal and tax issues that may need to be considered with this amazing  opportunity. Making well-informed decisions requires an understanding of your benefits and your role  in the process.     This guide is an explanation of benefits related to relocation; it is not an employment offer or  employment contract or a guarantee of continued employment. The Company’s decisions regarding  the application and interpretation of the relocation benefits are final and the Company reserves the  right to change or cancel all or any part of these benefits at any time.    How to Use This Guide    Throughout this explanation of benefits look for this icon indicating you must TAKE ACTION  to make the most of these awesome benefits and services and to read important notices.                 Look for this icon for IMPORTANT INFORMATION.           Let us know if you need any help along the way!      FIRST REQUIRED ACTION   Please take the time to read this guide carefully as you are responsible for understanding and  adhering to guidelines. We want to deliver on our promise of being a great place to work,  and we’ll need your help.      For Questions, contact Global_Mobility@Discovery.com    

 

          Domestic Relocation  6  Relocation Counselor  Discovery (“the Company”) has relocation vendors to assist you in coordinating aspects of your  relocation. Upon receiving relocation authorization from the Company, the selected vendor will assign  a dedicated Relocation Counselor (“Relocation Counselor”) who will be your primary point of contact  throughout your move. Your Relocation Counselor will navigate you through the relocation process  and answer any questions. The section below on Expense Reimbursement explains how to work with  your Relocation Counselor to make the most of this benefit.    Planning  The Company encourages you to become fully involved in your relocation and to work closely with the  professionals hired to help you. The more actively you participate the more effectively the relocation  vendors can assist you. Planning a move with a clear understanding of these benefits will also help to  avoid unpleasant surprises. The most successful moves are those that are well planned.    Pre-Acceptance Trip  Pre-Acceptance trip expenses are paid separately outside of the $250,000 total budget.   You and your spouse/partner are eligible for a trip to the potential destination for up to five  (5) days prior to the acceptance of the relocation.  Reimbursable expenses include transportation  (either mileage reimbursement or airfare and local fares to/from airports) and lodging.  All travel  arrangements are to be in accordance with The Company’s Travel and Entertainment Policy (Travel  Policy). During the trip, the relocation vendor will arrange for an area tour including an overview of  residential areas and local housing.    Pre-Acceptance trip up to five (5) days includes:  • Round-trip transportation  o  Economy Airfare – if distance exceeds 300 miles, train, or mileage at current rate  • Local transportation  • Reasonable lodging   • Meal expenses up to the daily limits noted in the Travel Policy for employee and  spouse/partner.    ACTION REQUIRED:  Please contact your relocation vendor to coordinate your Pre- Acceptance trip. Pre-Acceptance trips should coincide with a business trip.  The employee’s  expenses will not be considered taxable income.  A spouse’s/partner’s Pre-Acceptance trip  expenses are considered relocation expenses for tax purposes and will be grossed-up.   

 

          Domestic Relocation  7  Defining your Benefit Package    The total cost of your relocation expenses must not exceed $250,000 net.  Tax Gross-up  assistance is provided in addition to the $250,000 limit.    It is recommended you work closely with the professionals that have been made available to properly  plan and budget your move accordingly. If you exceed $250,000 in expenses, you will be responsible  for those excess costs.      A Domestic Relocation benefit package is available for new hires and for current employees. You may  begin incurring eligible expenses when you sign your Relocation Agreement and until one year after  your Transfer Date.  All expenses must be incurred and expensed within one year of your Transfer  Date; Transfer Date expenses incurred and/or expensed beyond one year from your Transfer Date  will not be covered by the Company.    General Terms and Conditions  Eligibility  You are eligible for assistance described if:  a) You are a current, full-time employee, or a new hire in Job Bands 0, 1, 2 or 3  b) The distance between the former residence and the new work location must be fifty (50)  miles greater than the distance between the former residence and the former work location   c) You are requested to relocate by the Company and are designated as eligible to receive  these benefits  If you are receiving any relocation benefits through a third party such as your previous employer or via  your spouse/partner, you are required to disclose this information to the Company. The Company, at  its sole discretion, may offset or withdraw any or all benefits for your relocation.     Eligible Dependents  For purposes of accompanying you on a relocation, eligible dependents include your:  • Current spouse (including a common-law spouse according to applicable law) or domestic  partner   • Any child age 18 or under who is in your legal custody or the custody of your accompanying  spouse or domestic partner and who depends upon you for financial support  • Any unmarried son or daughter up to age 25 who is a registered full-time student working  toward a degree.  

 

          Domestic Relocation  8  Confidentiality  In order for our vendors to administer the provisions of this guide, the Company provides certain  employee information to vendors such as base salary, tax information or information regarding  dependents, should they be authorized to accompany you. Our vendors and their employees are  obligated to maintain the confidentiality of your personal information and use it only for the purposes  set forth in this relocation guide.    Personal Data Protection  In agreeing to the relocation, you expressly consent to your personal data (and your family’s personal  data) being processed or transferred to the relocation vendor and its service providers.  Consult with  Global Mobility if you have questions.    Interpretation & Changes in Benefits  This guide establishes the criteria for receiving payment or reimbursement for your relocation  expenses. Expense limits and payment guidelines are established by Human Resources and  administered by the Global Mobility team. This document provides most of the information you will  need to know about your benefits. However, the Company reserves the right to end, suspend or  amend these benefits at any time without notice.  Further, the Company retains the ultimate  discretionary authority to establish and interpret the provisions of this guide and determine eligibility  for benefits.    Effective Date  This guide describes the provisions of Company Relocation Benefits effective as of January 1, 2018 and  applies to all relocations initiated after January 1, 2018. It replaces all relocation benefits and materials  issued prior to that date.  If your relocation was initiated prior to January 1, 2018, the policy in effect at  the time of your relocation remains controlling.    Effective Transfer Date  The effective Transfer Date is determined by your business unit. It is typically the hiring date in your  hiring location. The date at which point you begin receiving relocation benefits is agreed upon with  your business unit and managed by the relocation vendor. You may start your relocation process in  advance of your Transfer Date. The relocation process will continue after your Transfer Date. However,  as noted in Defining Your Benefit Package, you have one year from your Transfer Date to incur and  submit relocation expenses.   

 

          Domestic Relocation  9    Exceptions  Should the need arise to request any deviations or exceptions from this explanation of benefits, please  contact your Relocation Counselor. The Company’s Global Mobility team has the sole discretion to  approve any exception requests prior to any reimbursement. Neither your manager nor division head  have the authority to grant any exceptions to these benefits.      Relocation Repayment Agreement   IMPORTANT: Relocating an employee requires a substantial commitment by the Company.  Therefore, if you should elect to voluntarily terminate your employment with the Company  during the 24-month period immediately following your effective Transfer Date in the new  location, you will be required to repay the Company all relocation costs incurred by the  Company.     ACTION REQUIRED: You must sign and return your Relocation Repayment Agreement before  any relocation services can start and any payments can be processed.     Expense Reimbursement   Your Relocation Counselor assists you with administering the reimbursement of reasonable, necessary  and properly authorized expenses covered under these benefits. If you have questions about this  process, please contact your Relocation Counselor.  You are expected to manage expenses at a conservative level and to be familiar with which expenses  are reimbursable and which are not. You will receive additional information on reimbursable expenses  under these benefits. The Company, at its discretion, may choose not to reimburse, in full or in part, an  expense that is deemed unreasonable or excessive. All expenses, unless otherwise specified, must be  in accordance with the Company’s relocation benefits. Receipts are required for all reimbursable  expenses. Credit card statements cannot be used in lieu of receipts.    Please contact your Relocation Counselor for assistance in setting up your account for  reimbursements, if applicable. It is important to remember:  • Relocation expenses are separate and distinct from business expenses   • Business travel and entertainment expenses should be incurred and submitted in accordance  with the Travel Policy    • Relocation benefits are NOT business expenses and must not be treated the same way as  business expenses  

 

          Domestic Relocation  10  • You should not use your company corporate card for relocation expenses. If you incur a  relocation-related expense on your COMPANY CORPORATE CREDIT CARD in error, you  should reconcile it as a personal expense on the corporate card and then separately submit  for reimbursement under the relocation expense process  • You should keep records and original receipts of all expenses  • Cash payment may not be substituted or exchanged for any specific benefit unless explicitly  indicated  • Any unused benefits are not interchangeable for any other benefits or cash monetary value  • No expenses will be reimbursed or paid after one (1) year from Transfer Date in the new  location   If you have questions about this process, please contact your Relocation Counselor.    ACTION REQUIRED: Keep records and original receipts of all relocation expenses.      Home Sale – Buyer Value Option  Home sale assistance is available to existing homeowners in the origin location at the time of  the relocation. The Company will cover the normal and customary costs associated with selling  your home, as described in this policy.     IMPORTANT:  Please do not contact any real estate agent to list your home until you  speak with your Relocation Counselor about the home sale program benefit called the  Buyer Value Option (BVO) home sale program.  In order to remain eligible for all of the  benefits of the relocation program, you must work with service providers approved by  the relocation vendor.    The BVO program enables you to sell your home to the relocation vendor who then sells it to an  outside buyer. When all requirements are met, broker commissions and closing costs paid as part of  this home sale program are non-taxable under current IRS guidelines.  Except for the involvement of  the relocation vendor, the marketing and sale of your property is the standard home sale process.  The home that you are selling must be considered your primary residence and you must occupy the  property prior to the acceptance of this relocation.  Home Sale Assistance is NOT available for  cooperative apartments, duplexes, mobile homes, property sold under a land contract or other  deferred passage-of-title arrangements, seasonal residences, farms, income producing properties,  homes with excess acreage or additional lots, and properties that are zoned for agriculture.     ORIGIN    

 

          Domestic Relocation  11    ACTION REQUIRED: If your home is valued at $1,000,000 or more, please contact your  Relocation Counselor immediately to ensure proper allocation of your relocation funds.     The Company reserves the right NOT to provide Home Sale Assistance to any property that is deemed  cost prohibitive due to any of the following:  • Employee is not in title or the title is not clear  • Severe marketability problems  • Zoning or easement disputes  • Homes in the midst of legal proceedings including: divorce, foreclosure, short sale, etc.  • Hazardous substances or improperly installed materials such as but not limited to: radon,  asbestos, synthetic stucco, LP siding, aluminum wiring, illegal substances including the by- products of a “meth” lab, vermiculite insulation, underground fuel tanks, etc.  • Homes with imported corrosive drywall  • Vacation/secondary homes  • Homes that cannot be financed by a lending institution or are uninsurable  • Homes uninhabitable or unmarketable due to the physical condition and/or homes that are  structurally unsound  • Homes that do not qualify for standard insurance rates  • Homes that do not comply with local building codes  • Homes that are partially completed or are under substantial renovation  • Homes with subrogated mineral rights  • Homes with Private Transfer Fee covenants (PTF)  • Investment or rental properties  • Properties with excessive acreage for the area (+5 acres)  • Houseboats  • Vacant lots appraised as contributory value only    Properties with the following issues would not qualify for the BVO Home Sale program until remedial  steps are taken to correct the problem:  • An “active” underground storage tank unless you are able to provide transferable “Tank  Insurance” that covers spills and clean ups and is acceptable to the relocation vendor; the  property will again be eligible.  The cost of such insurance is your responsibility. It will also be  

 

          Domestic Relocation  12  your responsibility to provide all clearance from applicable municipality state or federal  governances.  • Residences with an “inactive or abandoned” underground storage tank unless you are able to  have the underground storage tank successfully removed and provide documentation (i.e.  receipt from contractor or proof of payment) and re-inspection results in a clear report,  acceptable to the relocation vendor. The cost of all remedial steps is the responsibility of the  relocating employee. It will also be your responsibility to provide all clearance from applicable  municipality state or federal governances.  • Environmental, Structural and/or EPA related issues as it relates to environmental concerns  (such as but not limited to asbestos, lead paint, toxic materials) and excessive repairs. If  retesting results in a clear report, acceptable to the relocation vendor the property will again  be eligible. The cost of all remedial steps is the responsibility of the relocating employee. It will  also be your responsibility to provide all clearance from applicable municipality state or federal  governances.  IMPORTANT: If your home is eligible for the Home Sale – Buyer Value Option program (BVO)  and you choose NOT to go through the program, you forfeit all home sale assistance benefits.   If your home is ineligible for the BVO home sale program based on the requirements above,  you can still submit your Closing Settlement Statement to the relocation vendor for  reimbursement of broker commission and normal and customary seller’s costs if within  Relocation Budget.      Marketing Assistance  The Company understands that getting the best price for your home is vital to a successful relocation.   The selection of a knowledgeable real estate agent is very important.  The relocation vendor has  arranged to provide you access to a network of qualified real estate agents available in your  community who specialize in assisting relocating employees and are trained in relocation home sale  requirements. The relocation vendor’s recommended real estate firms and agents are specially trained  to effectively market your home, as well as, address the needs that are unique to relocation.  In  addition, using one of these agents may relieve you of any pressure you may feel to use the services of  a friend, relative or acquaintance in the real estate field.    The relocation vendor will provide you with qualified agents in your area from which to select a listing  agent/firm.  You are encouraged to interview these agents to assess their ability to effectively market  your home.  Please advise them that you are considering using their services and they have been  referred by the relocation vendor.    Some of the questions you might ask them to help you in your selection process are:      

 

          Domestic Relocation  13  • What is the current average marketing time for listings in my neighborhood?  • How many homes similar to mine in price and location do you currently have listed?  • How many homes similar to mine have you sold in the last 90 days?  • In what locations and price ranges are you most active?  • What are the comparable home listings and sales you will or have used to arrive at your  recommended list price?  • How do you intend to market my home (number/frequency of open broker and public houses,  where and how will my home be advertised including number of websites, other  recommendations)?  The agent’s marketing strategy will include:  • Suggestions on how to prepare your home for sale  • A recommended listing price and anticipated sales price  • Information on competing properties for sale and recently closed comparable homes  • Creative home sale promotion ideas  • Bi-weekly marketing update/status reports to you and the relocation vendor    Listing Your Home  Agent listing commissions should be limited to 6% and the initial listing period should be no longer  than 90 days. To ensure you are priced right for the market, you are encouraged to not list for more  than 105% of the average of the 2 agents’ anticipated sales price.    Marketing Updates  Your Relocation Counselor will monitor the entire listing effort, including a review of homes currently  listed in your area and an evaluation of recently closed properties to ensure that a realistic pricing  strategy is in place.  Marketing assistance also includes pro-active marketing strategy calls, follow-up  on buyer and Realtor feedback, follow-up on advertising and open house events.  Your Relocation  Counselor will also make recommendations to adjust your price, sales terms, and/or conditions  accordingly.  Inspections  At the same time you are making your agent selection, the relocation vendor must order property  condition inspections on your home in order to purchase your home once an outside buyer is found.   These inspections include, but are not be limited to:  • General Property Condition Inspection  • Pest Inspection (Wood Destroying Organism – WDO)  • Radon Warranty, if applicable for your area  • Well and/or septic system inspection, if applicable  

 

          Domestic Relocation  14    Additional inspections, such as structural or roof inspection may be required based on  recommendations on the General Property Condition Inspection report. When your Relocation  Counselor receives the inspection reports from the inspection company, copies are sent to you and  required repairs, if any, will be reviewed with you. You are required to make repairs before a buyer  makes an offer. (See “Repair Allowance” below.)    Repair Allowance  Based on the Property Condition Inspection above, you may be required to undertake certain repairs.  Should you be required to make repairs, you may be reimbursed for home repairs up to the amount of  $5,000 net. The relocation vendor and/or your listing agent can assist with hiring applicable  contractors and arrange for direct billing of costs, where possible.  Any repairs over $5,000 will be at  your expense. Certified contractor receipts for work completed and a satisfactory re-inspection will be  required for reimbursement.  Please discuss the options with your Relocation Counselor PRIOR TO  making any repairs. When repairs are completed during the marketing process and prior to an outside  buyer’s offer, the home has more market appeal and buyers are less likely to want to negotiate price  based on condition. The relocation vendor may not accept an offer with contingencies if repairs are not  completed.    Title Search  In addition to property condition inspections, the relocation vendor will contact its national real estate  title company to complete a title search on your home to ensure the title on your home is clear. The  title company will also send you required documents necessary to close the sale with the outside buyer  that you will need to complete and return so the relocation vendor can close the sale with the new  buyer once an offer is accepted on your home.      Receiving an Offer From an Outside Buyer  When you receive an acceptable offer from an outside buyer, your Relocation Counselor can assist you  with the negotiation process.  You can negotiate with the outside buyer until a verbal agreement is  reached.    IMPORTANT: DO NOT SIGN ANY CONTRACT OR PURCHASE OFFER. Signing an offer will  disqualify you from the BVO program. The written offer must list the relocation vendor  as the seller.     The sale cannot be contingent on the closing or sale of the buyer’s current home.    The written offer packet must include all required relocation vendor’s and state required documents  including:     

 

          Domestic Relocation  15  • Buyer’s lender pre-approval letter  • The relocation vendor and state property disclosure forms  • Inspection reports initialed by buyer  • The relocation vendor’s Addendum to Purchase and Sales Agreement  Your real estate agent will send the outside buyer’s written offer including the above to your  Relocation Counselor for review and approval. If the offer meets all the requirements for the Buyer  Value Option program, and you have completed and returned to the relocation vendor and the title  company all your required paperwork, your Relocation Counselor will send you Contract of Sale to  purchase your home for the same price and terms as the outside buyer’s offer. After you sign and  return the Contract of Sale, the relocation vendor will sign the written offer from the outside buyer.    Closing the Sale with the Relocation Vendor  When you accept relocation vendor’s offer on your home and need your equity to purchase a home in  your new location, they will have its title company determine the equity in your home.  Your equity will  be based on the purchase price less any mortgage balance(s), taxes, interest and Homeowners’  Association fees, if applicable, prorated through your vacate date or offer acceptance date, whichever  is later, and any agreed upon repair costs not previously completed. You may request up to 80% of  your equity in advance for your new home purchase closing costs or down payment.  Speak to your  Relocation Counselor if you anticipate needing an equity advance.     You will not be billed for any standard closing costs on the sale of your home to the relocation vendor.      Expenses Not Covered  The following costs are examples of items that are NOT covered closing expenses and will be deducted  from your equity if they are included in the sale to the outside buyer:  • Home Owner Warranties  • Closing Costs typically paid by the buyer  • FHA fees  • Concessions to the Buyer (such as homeowners’ association or property tax credits)  • Buyer Broker Fees  • Prepayment penalties over $2,500  • VA closing costs exceeding 3% of the sale price    This list is not all-inclusive.  Questionable items should be addressed with your Relocation Counselor  during the sale negotiation process.     

 

          Domestic Relocation  16  Renter Early Lease Cancellation Penalty  Employees who are renting in their current location prior to relocating may be subject to a  penalty for early lease termination.  If lease cancellation penalties cannot be avoided, the  Company will reimburse documented fees.  Typical early lease cancellation fees are one,  two, or three months of rent, as defined with a lease agreement.      Reimbursement will be provided for documented lease cancellation penalties if within Relocation  Budget.       Home Finding Trip  Employees and their spouses/partners and children are eligible for two (2) trips to the  destination for up to five (5) days for each trip. Reimbursable expenses include either  mileage reimbursement or airfare, local transportation, meals and lodging.  Reasonable childcare  expenses will be reimbursed if the children are not included on the trip.  Other expenses such as house  sitting and animal care are covered by your Lump Sum. All travel arrangements are in accordance with  The Company’s Travel Policy.    The home finding trips include:  • Round-trip transportation  o Economy Airfare – if distance exceeds 300 miles, or mileage at current rate   • Local transportation Reasonable lodging   • Meal expenses up to the daily limits noted in the Travel Policy for employee and  spouse/partner; children at 50% of daily limit    IMPORTANT: Travel arrangements must be booked according to the Company’s Travel  Policy. Please contact your Relocation Counselor to coordinate home finding trip(s).      Destination Assistance  The Company understands that finding the right home in the new location is vital to a  successful relocation.  Destination services provides access to either a professional rental  agent or a qualified real estate agent who will be able to assist with area counseling and  provide specific information.    The types of support available include:   • Types and price ranges of available rental housing or homes for sale  ORIGIN  

 

          Domestic Relocation  17  • Town and neighborhood data  • Property tax information  • Commuting information  • School information  • Medical, religious and other personal information  If necessary, and if within budget, the Company will provide reimbursement for a school consultant  who specializes in assessing student’s needs, testing, and placement in specialized education  programs.      Home Purchase Assistance    You will be provided with access to pre-qualified real estate firms and agents available in  the new community who specialize in assisting relocating employees.  The realtors recommended by  the relocation vendor have been specially trained to address issues that are unique to relocation.   Using one of these agents may relieve you of any pressure to use the services of a friend, relative or  someone less qualified.    IMPORTANT: Do not contact a real estate agent in your new location prior to speaking  with your Relocation Counselor.  Selection of a knowledgeable and competent real  estate broker in an unfamiliar area is very important.      Home Purchase Inspection  In addition to obtaining a mortgage on your new home, you may want to have a home inspection  performed prior to completing the transaction. You will be reimbursed for a destination home  inspection.     New Home Mortgage  There are numerous expenses associated with the closing of a new home.  The Company will  reimburse your normal and customary buyer’s closing costs in connection with the purchase of your  new home.      The following criteria must be met for reimbursement:    Your new home purchase must occur within one year of your Transfer Date.    Normal and customary closing costs for financing include, but are not limited to:  DESTINATION  

 

          Domestic Relocation  18  • Origination charges including Mortgage application fee, processing and commitment, and/or  service fee  • Reasonable attorney (legal) fees  • Conveyance taxes  • Title Insurance - Lender’s coverage only, if typically paid by the buyer  • Recording fees (including tax stamps)  • Credit reports  • Appraisal fees  • Flood certification  • Survey fees if required by lender  • Reasonable fees for Property Inspection   • VA funding fees    The following costs will NOT be considered:  • Discount points  • Property tax, insurance or interest  • Expenses normally charged to seller  • Private Mortgage Insurance (PMI)  • Improvement assessments by State, City, County taxing authorities  • Any fees associated with a Buyer Brokerage    If you have any questions on what is normal and customary for your new area, please check with your  Relocation Counselor.    Preferred Lenders  As an added benefit to the relocation policy, the relocation vendor has established a relationship with  national mortgage partners to assist eligible transferring employees in obtaining financing in the new  area. These national mortgage lenders offer competitive interest rates and a wide variety of mortgage  programs.  The service will include discrete, confidential mortgage counseling.  Pre-qualification will be  available to the employee to utilize before going on the house-hunting trip.    Because the mortgage companies are familiar with the relocation vendor and the Company’s benefits,  you should experience easy processing.  In addition, all reimbursable closing costs on the new home  purchase that are within your relocation budget will be direct billed to the relocation vendor.    Your Relocation Counselor will describe the program options with you and can arrange to have a  representative from these lenders contact you.  If you would like to contact the lenders directly, your  

 

          Domestic Relocation  19  Relocation Counselor will provide you with contact information.  Please identify yourself as an  employee of Discovery.    If you do not use the direct bill option, you must submit an official signed copy of the Closing  Settlement Statement within two weeks following the closing date.    Rental Home Finding  Help is available to assist you in renting a house or an apartment in your new location.      Your Relocation Counselor will refer you to a designated rental finding professional.  The Company will  pay the fees associated with the use of one of these agents.  These professionals are well qualified to  assist you with area counseling and rental finding assistance.  You are responsible for fees charged by  agents who have not been referred to you by your Relocation Counselor.      In Manhattan, the customary cost of obtaining a rental property is 12% to 15% of the annual rent.  In  the surrounding NY Metro area excluding CT, the customary fee is equal to one-month rent.  The  Company will reimburse you for these customary costs to obtain a rental in these areas.     It is uncommon for agents in other areas to charge rental commissions so please check with your  Relocation Counselor before paying any fees to agents or landlords.      Duplicate Housing  If you close on a home in your new location prior to the sale of your home in the former  location, the Company will reimburse you for certain duplicate housing expenses listed below for up to  a maximum of six (6) months, if within your relocation budget.      The home in your departure location must be considered your primary residence and you must have  occupied the property prior to the acceptance of this relocation.  The Company cannot provide  benefits for vacation homes or investment properties.    The Company may reimburse you housing costs for the following costs related to maintenance of your  property in the origin location:    • Mortgage Interest (1st mortgage only)   • Property Tax  • Homeowners Insurance  

 

          Domestic Relocation  20  • Homeowner’s Associate Dues  • Utilities (gas, electric, sewage/water)  • Lawn Maintenance (grass cutting or snow removal)    Reimbursement will be made upon receipt of documented duplicate mortgage payment such as your  mortgage statement, property tax bill, homeowners insurance bill, etc.     Non-deductible reimbursements will be grossed up.  Interest expense and property tax are a tax- deductible expense on your Federal Income Tax filing for mortgages up to $750,000 and so not grossed  up.      This benefit may be applied should you choose to rent in the destination rather than purchase.  Discuss  your needs with your Relocation Counselor.       Moving Household Goods   The relocation vendor has contracted with top quality, national van lines to provide this  service to you.  You will be given a mover who is best suited to provide you with quality  service based on your location.    ACTION REQUIRED:  Contact your Relocation Counselor as early as possible to establish a  preliminary schedule.  Household goods shipments can take up to three weeks to book.      The following expenses and services are covered:  • Packing and shipping of ordinary household goods and personal effects up to a maximum  weight of 30,000 pounds  • Disconnect and reconnect of normal household appliances   • Two (2) extra pickups and deliveries, if needed  • Two (2) debris removals  • Full unpacking (put-away) service  The following expenses and services are not covered:  • Shipment of hazardous materials such as explosives, chemicals, flammable materials, firearms  (except where permitted by law), garden chemicals  • Shipment of hot tubs/spas, sheds, above ground pools  

 

          Domestic Relocation  21  • Valuables such as jewelry, currency, dissertations or publishable papers, and other collectibles  or items of extraordinary value  • Removal, disassembling or installation of carpeting, drapery rods, storage sheds or other  permanent fixtures  • Shipment of boats, recreational vehicles and unusually heavy or cumbersome hobby materials  • Special packing or transportation of frozen foods, plants, wine collections or other perishables  • Moving or shipping such items as trees, shrubs, construction materials, firewood, livestock and  other non-domestic and domestic animals   • Tips or other gratuities to the moving company’s employees  • Any services performed by the employee, dependents or relatives    Valuation Protection  Valuation coverage at full replacement value is provided for your personal property while in transit.   The valuation does not cover: bank accounts, bills, deeds, evidence of debt, currency, letters of credit,  passports, airline or other tickets, securities, bullion, precious stones, stamp or coin collections.  Special  arrangements should be made for these items.    Vehicles  You are encouraged to drive your personal car(s) to the new location if possible when you report to  work.  Mileage reimbursement is made at the company’s current mileage rate.  If the distance to the  new location is more than 300 miles you may ship two (2) vehicles.  One or more motorcycles may be  included in the shipment as well, if within relocation budget.     Insurance on such vehicles will be provided, however, vehicles that are shipped are not eligible for  mileage expense reimbursement.    In-transit Storage  You should make every effort to move directly to your permanent residence.  If your new home is not  accessible for delivery of your household goods or if you are required to vacate your previous  residence due to a buyer requiring immediate occupancy, temporary storage will be provided for a  period not to exceed 6 months, if within budget.        

 

          Domestic Relocation  22  Final Move Travel  The final move trip is defined as one day in the old and one day in the new and days en  route.  Any remaining days are considered temporary living. All travel arrangements are in accordance  with The Company’s Travel Policy, except for the following special provisions:    • Airfare if the move is over 300 miles, 7-day advance purchase ticket is required.  • Meal expenses up to the daily limits noted in the Travel Policy for employee and  spouse/partner; children at 50% of daily limit. Personal Automobile Travel will be reimbursed as  follows:  o If the move is less than 300 miles, mileage will be reimbursed at the current corporate  mileage rate.  o If the move is over 300 miles and you choose to drive, you will be reimbursed for  reasonable lodging, meals and mileage at the current corporate mileage rate.    ACTION REQUIRED:  Please contact your Relocation Counselor to coordinate your Final  Move trip. Travel arrangements must be booked according to the Company’s Travel Policy.         Temporary Living Pre-Departure & Post-Arrival  You’ve packed up your house and are ready to move, but you haven’t found a place in  your new location? Not a problem! Your Relocation Counselor will assist you in obtaining suitable living  facilities.  The expenses incurred for temporary living accommodations are billed directly to the  relocation vendor.  Temporary living includes the following:  • Fully furnished apartments including linens, utilities, internet access, local telephone service  with the exception of long-distance personal phone calls, television, and depending on the  location, one parking space. The size of the apartment will be in line with your family size, not  to exceed 3 bedrooms.  • If corporate housing is not available or doesn’t have a kitchen or laundry facilities, the Company  will reimburse reasonable meal and laundry expenses based on the Travel Policy for up to two  weeks. Children under 18 are reimbursed up to 50% of the allowable daily amounts, all if within  budget.   

 

          Domestic Relocation  23  • The Company provides up to 6 months of temporary living accommodations in any combination  of the origin and destination location depending on your needs and if within budget.   • Personal long-distance telephone charges, meals, additional fees for pets, and laundry and  other incidentals are at your expense.    If the move distance is greater than 300 miles, you may pre-ship one car and rental car expenses while  your vehicle is in transit will be reimbursed (fuel is not included). If your move distance is less than 300  miles, you should plan to drive and use your personal vehicle while in temporary living.  You will not  receive reimbursement for any other temporary transportation expenses.    If you report to your new location before being joined by your family, you may be reimbursed for  return trips to visit your family, providing that you have funds remaining in your total relocation spend.   Return trips must follow The Company’s Travel Policy.       Spouse/Partner Assistance    The Relocation Counselor may initiate services with a Spouse/Partner Assistance provider  upon request if within budget.      Services may include:  • Career assessment tools and exploration of career options  • Resume preparation and comprehensive marketing plan development  • Coaching for interviewing and negotiating  • Licensing requirements for professionals  • Networking strategies    Eligible spouses/partners will receive program expenses up to $5,000 net and the program must be  completed within the first 12 months of your Transfer Date.     Pet Transportation Expenses  The cost to transport and board pets in transit are reimbursable under the relocation plan  up to $5,000 net.     

 

          Domestic Relocation  24  To receive reimbursement, provide documented expenses to the relocation vendor through the  expense reimbursement process.     Employees and their family members take full responsibility for pets at all times; neither the Company  nor the relocation vendor have any liability with regards to household pets.        Lump Sum Allowance  A Lump Sum Allowance may be available if you have not utilized the entire amount of your  relocation budget.  A Lump Sum Allowance may be requested to cover additional expenses  and incidentals not covered by the specific relocation benefits provided by the Company.   The maximum amount of the Lump Sum Allowance for the employee is $15,000 net regardless if you  have more funds remaining in your budget.     The following expenses and services, if required, are not eligible for reimbursement and are expected  to be paid by the employee from the Lump Sum Allowance:   • Security deposits/advance rent  • Driver’s license/automobile registration  • Cable/Utility hook-up/installation  • Housecleaning services  • Carpet/drapery cleaning and/or altering  • Non-refundable portion of service contracts and memberships  • Shipment of items not covered under the movement of household goods  • Gratuities to movers   • Non-transit related pet expenses  • Any additional tax liability incurred as a result of the move  • Professional tax services  • Any other expenses not covered by this policy   Additional Payments Outside of Relocation Budget      For Dependents  The Company will provide a payment equal to $3,000 net for each eligible dependent that will  accompany you to your new destination.  This additional amount for dependents does not count  against your total budget.     

 

          Domestic Relocation  25  For Relocations to New York City and Los Angeles   Relocations to New York City and Los Angeles are eligible for an additional $10,000 net allowance  payment.  This additional amount takes into consideration that these two areas have a higher cost of  living and you may incur added costs when securing a property.  This additional amount does not count  against your total budget.            Days off for Relocation  In addition to home finding trips and travel days, the Company will provide an additional  three (3) days of paid time off to help with completing necessary tasks associated with your  relocation (pre-move survey of household goods, packing, delivery of household goods, etc.).    ACTION REQUIRED: You must seek approval from your manager prior to taking any time  off for relocation.       Tax Assistance  The IRS requires that all relocation expenses paid by an employer be included in your gross  income.  The Company will provide tax gross-up assistance on the relocation benefits paid to  you or on your behalf.  All expenses, except those related to the Home Sale – Buyer Value  Option and employee’s share of Pre-Acceptance Trip expenses are considered taxable income.     Gross-Up Assistance  The Company will pay the estimated federal, state, local and FICA taxes on your behalf in order to  alleviate the tax burden associated with company-paid, non-deductible relocation expenses.    Child Tax Credit  If you become ineligible for the Child Tax Credit as a result of your relocation expenses adding to your  gross income, contact your Relocation Counselor.   Deductible expenses are those that can be deducted from your taxable income at the time you  prepare your annual federal income tax return.  Although they will be reported as income to you,  Discovery will not gross up these amounts since you can deduct these types of interest on Schedule A  of your tax return.  

 

          Domestic Relocation  26  Examples of deductible expenses that will not be grossed up are:   • Mortgage interest & property tax provided for Duplicate Housing  • Discount points (not an expense covered by the Company)  • Prepayment Penalty  Payments for tax assistance are not paid to you.  Instead, tax payments are calculated and included in  your W-2 as withheld taxes.  The tax assistance is then submitted to the proper government agencies  on your behalf.    IMPORTANT: Keep records and receipts of all your expenses. A year-end tax reporting  statement that will itemize all of your relocation expenses will be prepared and posted  to your relocation portal in January following the end of the tax year.      ACTION REQUIRED: Notify Payroll to update your address and tax forms.      The Company does not assume responsibility for specific guidance in the matter of filing individual tax  returns – this remains your responsibility.  You may wish to consult a professional tax advisor for  details on the tax implications of your relocation.  Along with the seeking the assistance of a  professional tax advisor, consider reading IRS Publication 523 – Tax Information on Selling Your Home  or visiting www.irs.gov for more information.      

 

Domestic Relocation  27  Tax Summary  Expense Added to W-2 Taxable Income Tax Assistance  Pre-Acceptance Trip – Employee  Expenses Only No No N/A  Pre-Acceptance Trip –  Spouse/Partner Expenses Yes Yes Yes  Home Sale Closing Costs – Buyer  Value Option No No N/A  Lease Cancellation Yes Yes Yes  Home Finding Trip Yes Yes Yes  Destination Assistance Yes Yes Yes  Home Purchase Closings Costs Yes Yes Yes  Duplicate Mortgage Interest &  Property Tax  Yes Yes No1 Duplicate Housing Insurance,  Utilities, Maintenance &HOA fees  Yes Yes Yes  Household Goods  Shipment/Storage/Auto  Yes Yes Yes  Final Move Travel Yes Yes Yes Temporary Living Yes Yes Yes  Spouse/Partner Assistance Yes Yes Yes  Pet Transportation Yes Yes Yes  Lump Sum and Additional Payments Yes Yes Yes  1 Interest payments are considered deductible and will not be tax assisted for income taxes.  

 

Domestic Relocation  28  Reduction in Force/Workforce Restructuring Subsequent to Transfer Date The purpose of this paragraph is to clarify Discovery’s relocation policy as it may apply in situations  where an employee’s employment ends due to Discovery’s decision to involuntarily terminate the  employee’s employment without “cause,” including for restructuring, following the employee’s  relocation. At its sole discretion, Discovery may provide additional relocation benefits for an employee  whose employment is terminated without cause (most commonly due to a reduction in force or job  elimination). An employee who has completed (or is in the process of completing) a relocation within  one year prior to the effective date of a qualifying for involuntary termination may be eligible to  receive limited relocation benefits to return to their original home location at the time of the Transfer  Date with Discovery (i.e., original city and state only).    Benefit entitlements include:  • Shipment of Household Goods back to home location (the entitlement is based on original shipment to the host work location, including up to two (2) vehicles) • Home sale closing costs, if homeowner • Lease breakage up to three (3) months, if renter • Economy airfare, train travel for trip back to home location (Air travel if over 300 miles, per Discovery guidelines) or mileage reimbursement IMPORTANT: The employee must complete a Relocation Notification Form and return it  to the Global Mobility team within four (4) weeks (i.e., postmarked or faxed) of the  termination date to apply for these benefits. Failure to notify Discovery as stated will  forfeit relocation benefits. The employee will have a total of twenty-four (24) weeks  from the termination date to complete their relocation and submit approved expenses  for reimbursement. Any expenses submitted after the above stated time frame will not  be reimbursed.  Employees who voluntarily terminate employment or are terminated for cause or poor performance  are not eligible to receive additional relocation benefits and may be required to repay relocation  expenses paid under this policy.  In addition, if an employee is eligible for relocation benefits from  another employer (for example, the employee finds another job in the home location and is eligible for  relocation benefits from the new employer), the employee will not be eligible for relocation benefits  from Discovery.

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