Registration Rights Agreement

REGISTRATION RIGHTS AGREEMENT


Dated January 11, 2000


among


CARVER BANCORP, INC.


MORGAN STANLEY & CO. INCORPORATED


and


PROVENDER OPPORTUNITIES FUND L.P.


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TABLE OF CONTENTS
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PAGE
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ARTICLE 1


DEFINITIONS


SECTION 1.01. Definitions.....................................................1


ARTICLE 2


REGISTRATION RIGHTS


SECTION 2.01. Demand Registration Rights......................................3 SECTION 2.02. Piggy-Back Registration Rights..................................4 SECTION 2.03. Registration Procedures.........................................5 SECTION 2.04. Participation in Underwritten Registrations.....................9 SECTION 2.05. Holdback Agreements.............................................9 SECTION 2.06. Indemnification.................................................9


ARTICLE 3


MISCELLANEOUS


SECTION 3.01. Notices........................................................13 SECTION 3.02. Amendments; Waivers............................................13 SECTION 3.03. Successors; Assigns............................................13 SECTION 3.04. Entire Agreement...............................................13 SECTION 3.05. Applicable Law.................................................14 SECTION 3.06. Remedies.......................................................14 SECTION 3.07. Severability...................................................14 SECTION 3.08. Fees and Expenses..............................................14 SECTION 3.09. Counterparts...................................................14


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REGISTRATION RIGHTS AGREEMENT


REGISTRATION RIGHTS AGREEMENT dated January 11, 2000 among Carver Bancorp, Inc., a Delaware corporation (the "ISSUER"), Morgan Stanley & Co. Incorporated, a Delaware corporation ("MS"), and Provender Opportunities Fund L.P., a Delaware limited partnership ("PROVENDER"). Each of MS and Provender is sometimes hereinafter referred to as a "HOLDER".


WHEREAS, the Issuer, MS and Provender are parties to a Securities Purchase Agreement dated January 11, 2000 (the "PURCHASE AGREEMENT") pursuant to which MS purchased 40,000 shares of Series A Preferred Stock from the Issuer and Provender purchased 60,000 shares of Series B Preferred Stock from the Issuer; and


WHEREAS, the parties hereto desire to provide for certain rights and obligations relating to the capital stock of the Issuer following the date hereof.


NOW, THEREFORE, the parties hereto agree as follows:


ARTICLE 1


DEFINITIONS


SECTION 1.01. Definitions. (a) The following terms, as used herein, have the following meanings:


"BUSINESS DAY" means any day except a Saturday, Sunday or other day on which commercial banks in the City of New York are authorized by law to close.


"COMMISSION" means the Securities and Exchange Commission or any successor commission or agency having similar powers.


"COMMON SHARES" means shares of the common stock of the Issuer, par value $0.01 per share.


"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


"PERSON" means an individual, partnership, corporation, limited liability company, trust, joint stock company, association, joint venture, or any other entity or organization.


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"PUBLIC OFFERING" means any underwritten public offering of equity securities of the Issuer pursuant to an effective registration statement under the Securities Act other than pursuant to a registration statement on Form S-4 or Form S-8 or any successor or similar form.


"REGISTRABLE COMMON SHARES" means Registrable Securities that are Common Shares.


"REGISTRABLE SECURITIES" means (i) all Series A Preferred Shares and all Series B Preferred Shares owned by the Holders and (ii) all Common Shares owned by the Holders or into which the Series A Preferred Shares or the Series B Preferred Shares owned by the Holders may be converted. Registrable Securities shall cease to be Registrable Securities when (i) a registration statement with respect to the sale of such Registrable Securities shall have become effective under the Securities Act and such Registrable Securities shall have been disposed of pursuant to such registration statement, or (ii) such Registrable Securities shall have ceased to be outstanding.


"REGISTRATION EXPENSES" means all (i) registration, qualification and filing fees, (ii) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of a qualified independent underwriter, if any, counsel in connection therewith and the reasonable fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities), (iii) printing expenses, (iv) internal expenses of the Issuer (including, without limitation, all salaries and expenses of officers and employees performing legal or accounting duties), (v) fees and disbursements of counsel for the Issuer, (vi) customary fees and expenses for independent certified public accountants retained by the Issuer (including the expenses of any comfort letters or costs associated with the delivery by independent certified public accountants of a comfort letter or comfort letters), (vii) fees and expenses of any special experts retained by the Issuer in connection with such registration, (viii) reasonable fees and expenses of one separate firm of attorneys for the Holders selling securities pursuant to such registration and (ix) fees and expenses of listing the Registrable Securities on a securities exchange; but shall not include any underwriting fees or discounts or commissions attributable to the sale of Registrable Securities.


"SELLING HOLDER" means any Holder who sells Registrable Securities pursuant to Section 2.01 or 2.02.


"SERIES A PREFERRED SHARES" means shares of Series A Convertible Preferred Stock, par value $0.01 per share, of the Issuer.


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"SERIES B PREFERRED SHARES" means shares of Series B Convertible Preferred Stock, par value $0.01 per share, of the Issuer.


"SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


"SUBSIDIARY" means any entity of which ownership interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned by the Issuer.


(b) Each of the following terms is defined in the Section set forth opposite such term:


TERM SECTION
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Holders Preamble Indemnified Party 2.06(c) Indemnifying Party 2.06(c) Inspectors 2.03(h) Issuer Preamble Purchase Agreement Recitals Records 2.03(h)


ARTICLE 2


REGISTRATION RIGHTS


SECTION 2.01. Demand Registration Rights. (a) Each of MS and Provender shall have the right to make written demand upon the Issuer, on not more than two separate occasions (subject to the provisions of this Section 2.01), to register under the Securities Act outstanding Registrable Securities, and the Issuer shall use commercially reasonable efforts to cause such shares to be registered under the Securities Act as soon as reasonably practicable so as to permit the sale thereof promptly; provided that each such demand shall cover, as the case may be, at least (i) $500,000 liquidation preference of Series A Preferred Shares or Series B Preferred Shares, as the case may be, or (ii) 41,667 Common Shares (subject in each such case to adjustment for stock splits, reverse stock splits, stock dividends and similar events after the date hereof). Each such demand will specify the type and number of Registrable Securities proposed to be sold and the intended method of disposition thereof. A registration that is a Public Offering shall not count for purposes of determining the number of registrations to which the requesting Holder is entitled pursuant to this Section 2.01(a) unless the


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requesting Holder is able to register and sell at least 75% of the Registrable Securities requested to be included in such registration.


(b) Notwithstanding the provisions of Section 2.01(a), the Issuer (i) shall not be obligated to prepare or file more than one registration statement pursuant to this Section 2.01 during any 9-month period and (ii) shall be entitled to postpone the filing of any registration statement otherwise required to be prepared and filed pursuant to Section 2.01(a) for a period of up to 90 days if the Issuer determines in its reasonable judgment and in good faith that the registration and distribution of the Registrable Securities that are the subject of such registration would impair or interfere with in any material respect any contemplated financing, acquisition, disposition, corporate reorganization or other material transaction or corporate development involving the Issuer or any of its Subsidiaries or would require premature disclosure thereof. In the event of such postponement, the requesting Holder shall have the right to withdraw the request for registration by giving written notice to the Issuer within 20 days after receipt of the notice of postponement and, in the event of such withdrawal, such request shall not be counted for purposes of determining the number of registrations to which the requesting Holder is entitled pursuant to Section 2.01(a).


(c) The requesting Holder shall be entitled to select the managing underwriter or underwriters of any Public Offering effected pursuant to this Section 2.01, which selection shall be reasonably satisfactory to the Issuer. The Issuer will enter into customary agreements (including an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of the Registrable Securities to be sold pursuant thereto.


SECTION 2.02. Piggy-Back Registration Rights. (a) If the Issuer at any time proposes to register any of its Common Shares, Series A Preferred Shares or Series B Preferred Shares under the Securities Act (other than (i) by a registration on Form S-4, Form S-8 or any successor or similar form, (ii) pursuant to a stock option or other employee benefit or similar plan or (iii) pursuant to a direct share purchase plan, dividend reinvestment plan or similar plan of the Issuer), the Issuer shall, as promptly as practicable, give written notice to each Holder of the Issuer's intention to effect such registration. If, within 15 days after receipt of such notice, any Holder submits a written request to the Issuer specifying the number of Registrable Securities intended to be disposed of by such Holder, the Issuer will use commercially reasonable efforts to include such the shares specified in such Holder's request in such registration. No registration effected under this Section 2.02 shall relieve the Issuer of its obligation to effect any registration upon request under Section 2.01. If a Holder has been permitted to participate in a proposed offering pursuant to this Section 2.02(a), the Issuer thereafter may determine either not to file a registration relating thereto, or to withdraw such registration statement, or otherwise not consummate such offering, without any liability


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hereunder other than its obligation to pay the Registration Expenses in connection therewith.


(b) If a registration pursuant to this Section 2.02 involves a Public Offering and the managing underwriter shall advise the Issuer that the inclusion of all the securities proposed to be included in such registration would exceed the largest number of securities that can be sold without having a material adverse effect on such offering, including the price at which such securities can be sold, the Issuer will include in such registration (i) first, if the registration is initiated by the Issuer, the Common Shares the Issuer proposes to sell and, if the registration is initiated by a Person (other than the Issuer or a Holder), the Common Shares such Person proposes to sell, (ii) second, the Registrable Securities requested to be included in such registration by the Holders, allocated (if necessary) among such Holders pro rata based on the Registrable Securities requested to be included in such registration, and (iii) third, if the registration is initiated by the Issuer, Common Shares to be sold for the account of other Persons having incidental registration rights and, if the registration is initiated by a Person (other than the Issuer), the Common Shares to be sold for the account of the Issuer and the Common Shares to be sold for the account of other Persons having incidental registration rights, in each such case, with such priorities among them as the Issuer shall determine.


SECTION 2.03. Registration Procedures. If the Issuer is required to use commercially reasonable efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Section 2.01 or 2.02, the Issuer will, as promptly as possible:


(a) prepare and file with the Commission a registration statement on an appropriate form, and thereafter use commercially reasonable efforts to cause such registration statement to become effective and to remain effective for 90 days or such shorter period as shall be necessary to effect the distribution of ...