Document:

Amended and Restated Investor Rights Agreement

 Exhibit 10.2 
 AMENDED & RESTATED INVESTOR RIGHTS AGREEMENT 
 This
AMENDED & RESTATED INVESTOR RIGHTS AGREEMENT (this “Agreement”), dated as of February 28, 2012, is made by and among Pacific Mercantile Bancorp, a California corporation (the “Company”), and Carpenter
Community Bancfund, L.P. and Carpenter Community Bancfund-A, L.P. (collectively, the “Investor”). The Company and the Investor shall sometimes be referred to herein, collectively, as the
“Parties” and individually as a “Party”. 
 RECITALS 

A. The Company is a bank holding company, registered as such under the BHCA and is the record and beneficial owner of 100 percent of the
issued and outstanding capital stock of Pacific Mercantile Bank, a California banking corporation (the “Bank”). 
 B. On August 26, 2011, the Company and the Investor entered into that certain Series B Stock Purchase Agreement (the “Series B Purchase Agreement” or “Series B
SPA”) and, pursuant thereto, consummated the sale by the Company and the purchase by Investor of a total of 37,000 shares of the Company’s Series B Preferred Stock (as defined below). 

C. On August 26, 2011, the Company and the Investor also entered into that certain Additional Series B Stock Purchase Agreement (the
“Additional Series B SPA”), pursuant to which the Company agreed to sell to Investor and the Investor agreed to purchase from the Company 108,000 additional shares of the Company’s Series B Preferred Stock (the
“Additional Series B Shares”). 
 D. Also on August 26, 2011, the Company and the Investor entered into
that certain Common Stock Purchase Agreement (the “Predecessor CSPA”), pursuant to which the Company had agreed to sell to the Investor and the Investor had agreed to purchase from the Company a number of shares of Common Stock
having an aggregate purchase price equal to $15.5 million. 
 E. Concurrently herewith the parties are (i) terminating the
Additional Series B SPA in its entirety, as a result of which none of the Additional Series B Shares will be sold to Investor and (ii) entering into an Amended & Restated Common Stock Purchase Agreement (the “Amended
CSPA”) which supersedes, in its entirety, the Predecessor CSPA and provides for, among other things, an increase to $26.3 million in the amount of Common Shares that will be purchased by Investor from the Company. 

F. On August 26, 2011, the Company and the Investor entered into that certain Investor Rights Agreement (the “Predecessor
Rights Agreement”) setting forth certain rights to which the Investor became immediately entitled and other rights to which Investor was to have become entitled upon the consummation of the transactions contemplated by the Additional Series
B SPA and the Predecessor CSPA. 
 G. As a result of and in connection with the actions described in the foregoing Recitals, and
as consideration therefor, the Parties are hereby entering into this Amended & Restated Investor Rights Agreement, which supersedes in its entirety the Predecessor Rights Agreement. 

AGREEMENT 

NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the Parties hereby agree as follows:

 Section 1. Definitions. Capitalized terms used but not defined herein shall have the respective meanings given to such
terms in the Series B Purchase Agreement. The following terms used herein will have the meanings set forth below or in the section hereof cross-referenced below, as applicable: 

“Acceptance Notice” has the meaning set forth in Section 3(b) hereof. 

“Acceptance Period” has the meaning set forth in Section 3(b) hereof. 

 “Additional Bank Entity First Offer Shares” has the meaning set forth in
Section 4(c) hereof. 
 “Additional Bank Entity First Offer Share Notice” has the meaning set forth in
Section 4(c) hereof. 
 “Additional First Offer Shares” has the meaning set forth in Section 3(c)
hereof. 
 “Additional First Offer Share Notice” has the meaning set forth in Section 3(c) hereof.

 “Additional Series B SPA” has the meaning set forth in Recital C to this Agreement. 

“Affiliate” has the meaning set forth in Rule 12b-2 under the Exchange Act. 

“Agreement” means this Agreement, as the same may be amended, modified, supplemented or restated hereafter. 

“Amended CSPA” shall have the meaning set forth in Recital E above. 

“Bank” has the meaning set forth in the Recitals to this Agreement. 

“Bank Entity” means the Bank and any direct or indirect significant subsidiary (as such term is defined in Regulation
S-X promulgated under the Securities Act) of the Bank and any of their respective successors and assignees. 
 “Bank
Entity Acceptance Notice” has the meaning set forth in Section 4(b) hereof. 
 “Bank Entity Acceptance
Period” has the meaning set forth in Section 4(b) hereof. 
 “Bank Entity Common Stock
Equivalents” means options, warrants, or other rights or securities which, in accordance with their terms, are exercisable or convertible into or exchangeable for shares of Bank Entity common stock, provided, however, that if any of
the foregoing options, warrants or other rights to purchase or subscribe for such Bank Entity common stock are subject to vesting, such options, warrants or other rights subject to vesting shall be included in the definition of “Bank Entity
Common Stock Equivalents” only upon and to the extent that such options, warrants or other rights have vested and are not subject to forfeiture under any other agreement with such Bank Entity. 

“Bank Entity Equity Security” means the common stock of and any equity security of any Bank Entity that is convertible
into or exchangeable for common stock of that Bank Entity, including any Bank Entity Common Stock Equivalents which, in accordance with their terms, but subject to the proviso regarding vesting set forth in the definition of “Bank Entity
Common Stock Equivalents” above, are exercisable or exchangeable for shares of common stock of that Bank Entity. 

“Bank Entity Equity Security Transaction” “means a sale by the Company or by a Bank Entity of a Bank Entity Equity
Security which (i) is consummated prior to the Rights Termination Date and (ii) is not a Bank Entity Exempt Share Transaction. 
 “Bank Entity Exempt Share Transaction” has the meaning set forth in Section 4(e) hereof. 
 “Bank Entity First Offer Shares” has the meaning set forth in Section 4(a) hereof. 
 “Bank Entity Issuance Notice” has the meaning set forth in Section 4(b) hereof. 
 “Bank Entity Issuance Notice Date” has the meaning set forth in Section 4(b) hereof. 
 “Beneficial Ownership” and “Beneficially Owned” (when used with reference to shares of Company Equity Security) shall be determined in accordance with Rule 13d-3
under the Exchange Act, provided that an Investor that Beneficially Owns any Common Stock Equivalents shall be deemed, for purposes of this Agreement, to Beneficially Own the underlying shares of Common Stock for which any such Common Stock
Equivalents are exercisable or exchangeable within sixty (60) of the date on which the determination of Beneficial Ownership is being made. Notwithstanding anything to the contrary that may be contained herein or in Rule 13d-3 under the
Exchange Act, however, if two or more persons would be deemed, under Rule 13d-3, to share Beneficial Ownership of any shares of Company Equity Security, the number of such Company Equity Securities shall be computed without duplication.

 “BHCA” means the Bank Holding Company Act of 1956, as amended. 

  
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 “Board of Directors” means the Board of Directors of the Company or any
Bank Entity, as applicable. 
 “Carpenter Common Shares” means the shares of the Company’s Common Stock
which the Investor has agreed to purchase and does purchase pursuant to the Amended CSPA. 
 “Carpenter Funds”
Carpenter Community Bancfund, L.P. and Carpenter Community Bancfund-A, L.P.; of which the general partner is Carpenter Fund Manager GP, LLC. 
 “Carpenter Nominee” means an individual, designated in writing by Investor pursuant to Section 5 hereof, to serve as a director of the Company and the Bank and who satisfies the
following qualifications: (i) is reasonably acceptable to the Company, and (ii) satisfies all regulatory requirements and receives all regulatory approvals required to serve as a director of the Company and the Bank. 

“Carpenter Independent Director Nominee” means an individual designated in writing by Investor, pursuant to
Section 5 hereof, to serve as a director of the Company and Bank who satisfies the qualifications of a Carpenter Nominee and will qualify, on his or her appointment or election, as an Independent Director (as defined below) of the Company and
the Bank, to the extent necessary to enable the Company or the Bank to meet applicable NASDAQ rules, or any other applicable stock exchange or SEC rules, requiring Boards of Directors to be comprised of a majority of independent directors.

 “Common Share Closing” means the consummation of the purchase by the Investor of the Carpenter Common Shares
pursuant to the Amended CSPA. 
 “Common Share Closing Date” means the date on which the Common Share Closing
takes place. 
 “Common Stock” means the common stock, no par value, of the Company. 

“Common Stock Equivalents” means options, warrants, or other rights or securities which, in accordance with their terms,
are exercisable or convertible into or exchangeable for shares of Common Stock, provided, however, that, if any of the foregoing options, warrants or other rights to purchase or subscribe for such Common Stock are subject to vesting, such
options, warrants or other rights subject to vesting shall be included in the definition of “Common Stock Equivalents” only upon and to the extent that such options, warrants or other rights have vested and are not subject to
forfeiture under any other agreement with the Company. 
 “Company” means Pacific Mercantile Bancorp, a
California corporation, and any successor thereto by merger or operation of law. 
 “Company Equity Security”
means Common Stock and any equity security of the Company that is convertible into or exchangeable for Common Stock, including any securities or Common Stock Equivalents which, in accordance with their terms, but subject to the proviso
regarding vesting set forth in the definition of “Common Stock Equivalents” above, are exercisable or convertible into or exchangeable for shares of Common Stock. 
 “Company Equity Security Transaction” means a sale or issuance by the Company of a Company Equity Security which (i) is consummated prior to the Rights Termination Date and
(ii) is not an Exempt Share Transaction. 
 “DFI” means the Commissioner of the Department of Financial
Institutions of the State of California. 
 “Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission thereunder. 
 “Exempt Share Transaction”
has the meaning set forth in Section 3(e) hereof. 
 “Fairness Opinion” means a written opinion from a
nationally-recognized investment bank reasonably acceptable to the Investor opining that the Related Party Transaction is fair from a financial point of view to the Company or the Bank Entity, as applicable. 

“Federal Reserve Board” and “FRB” both mean the Board of Governors of the Federal Reserve System or the
applicable Federal Reserve Bank acting under delegated authority. 

  
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 “First Offer Shares” has the meaning set forth in Section 3(a) hereof.

 “Governmental Entity” means any foreign, domestic, federal, territorial, state or local governmental
authority, quasi governmental authority, court, government or self regulatory organization, government commission or tribunal, or any regulatory or administrative agency, or any political or other subdivision, department or branch of any of the
foregoing. 
 “Independent Director” means a person who meets the then applicable definition of
“independent director” as set forth in NASDAQ Marketplace Rule 5605(a)(2), or any similar requirements that may become applicable hereafter to the Company or the Bank. 

“Investor” has the meaning set forth in the Preamble to this Agreement. 

“Issuance Notice” has the meaning set forth in Section 3(b) hereof. 

“Ownership Percentage” means the percentage that results from dividing: (i) the number of shares of Common Stock
held by Investor (assuming that its Series B Shares have been converted into shares of Common Stock), plus the number of Common Shares purchased by Investor pursuant to the Amended CSPA, by (ii) the sum of the total number of shares of Common
Stock outstanding on the date of the determination of such percentage (assuming all outstanding Series B Shares and any shares of Common Stock issuable upon conversion of any securities that are then convertible into Common Stock or other
Voting Securities of the Company at the option of the holder thereof had been converted into shares of Common Stock). The Ownership Percentage will not give effect to any shares of Common Stock that are issuable upon the future exercise, whether by
the Investor or by other Persons, of options, warrants or other rights to purchase or subscribe for Common Stock which (unlike convertible securities) require the holders thereof to pay consideration for the shares of Common Stock underlying such
options, warrants or purchase or subscription rights. 
 “Person” or “person” means and
includes any natural person, corporation, limited liability company, limited partnership, general partnership or joint venture, trust, estate or any unincorporated association. 

“Purchased Shares” means the Series B Shares purchased by Investor pursuant to the Series B Purchase Agreement
and the Carpenter Common Shares purchased pursuant to the Amended CSPA. 
 “Registration Rights Agreement”
means that certain Registration Rights Agreement in the form attached as Exhibit C to the Amended CSPA. 

“Rights Termination Date” means the earliest to occur of the following: (i) a transfer by Investor of
Series C Preferred Stock (a) pursuant to any public offering of securities of the Company (including, without limitation, a public offering registered under the Securities Act), (b) a public sale pursuant to Rule 144 under the
Securities Act or any similar rule then in force, or (c) pursuant to a merger, consolidation or similar transaction involving the Company if, after any transaction specified in any of the foregoing clauses (a), (b) or (c) is
consummated, a Person or group of Persons (within the meaning of the Exchange Act, other than the Carpenter Funds and/or its Affiliates) would own beneficially or control, in the aggregate, more than 50% of the outstanding Voting Securities of the
Company, the surviving corporation in such transaction or the parent thereof, as the case may be (provided that in the case of a transaction described in clause (a) or clause (c) above, the transaction has been approved by the
Company’s Board of Directors or a committee thereof); (ii) the fourth (4th) anniversary of the date of this Amended Rights Agreement; (iii) (x) for Sections 2, 3, 4 and 9 of this Agreement, the Rights Termination Date will
be the date on which the Investor no longer Beneficially Owns fifty percent (50%) of the Purchased Shares actually purchased by Investor, measured assuming that the Investors Series B Shares have been converted into shares of Company
Common Stock, and (y) for Section 5 of this Agreement, the date on which the Investor no longer Beneficially Owns twenty-five percent (25%) of the Purchased Shares, measured assuming that the Investors Series B Shares have been
converted into shares of Company Common Stock; provided, that Sections 6, 7, 8, 10, 11, 12, 13, 14, and 15 of this Agreement shall survive any termination of this Agreement. 

“SBAV” means SBAV LP, a Delaware limited partnership that is an affiliate of the SBAV Group, Inc., and Affiliates
thereof. 
 “SBAV Investor Rights Agreement” has the meaning set forth in Section 14(a) hereof.

  
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 “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the Commission thereunder. 
 “Series B Certificate of Determination”
means the Certificate of Determination of the Rights, Preferences, Privileges and Restrictions of the Series B-1 Shares and Series B-2 Shares in the form such Certificate was filed with the California Secretary of State on August 16, 2011
and as the same may be amended hereafter. 
 “Series B Preferred Stock” and “Series B
Shares” means the Company’s Series B-1 and Series B-2 Convertible 8.4% Noncumulative Preferred Stock. 

“Series B Purchase Agreement” and “Series B SPA” have the same meaning, which is set forth in Recital B
to this Agreement. 
 “Series C Preferred Stock” and “Series C Shares” means the
Company’s Series C 8.4% Noncumulative Preferred Stock issuable as and to the extent provided in the Series B Certificate of Determination. 
 “Voting Securities” means shares of any class or series of capital stock of the Company that are then entitled to be voted by the holders thereof (either as a separate class or series, or
together with any other class or series of the Company’s capital stock) generally in the election of directors of the Company. 
 Section 2. Reservation for Issuance. The Company (i) will at all times reserve and keep available, out of its authorized but unissued Common Stock, a number of shares of Common Stock
sufficient for the full conversion of the Series B Shares, and (ii) if any shares of Series C Preferred Stock are issued to Investor, and there are insufficient authorized and unreserved shares of Common Stock available for the full
conversion of such Series C Shares, then, as soon as practicable following the issuance of the Series C Shares, the Company will take all action reasonably necessary to seek the approval of its shareholders of an amendment to the
Company’s Articles of Incorporation increasing the Company’s authorized shares of Common Stock and, if such approval is obtained, to file that amendment with the California Secretary of State in accordance with the provisions of
Section 13.2 of the Series C Certificate of Determination. 
 Section 3. Right to Purchase Additional Company
Equity Securities. From and after the date of this Amended Agreement and continuing until the Rights Termination Date, the Investor shall have the rights set forth hereinafter in this Section 3 (the “First Offer Rights”).

 (a) Right of First Offer. In order to preserve, but not increase, the Investor’s Ownership Percentage, if the
Company proposes to consummate a Company Equity Security Transaction, then, on the terms and conditions set forth hereinafter in this Section 3, and subject to the exceptions for Exempt Share Transactions that are set forth in Section 3(e)
below, the Company will offer to sell to the Investor, for the same purchase price that is paid for the shares of Company Equity Security being sold in such Company Equity Security Transaction (with non-cash consideration valued at its fair market
value), a number of shares of such Company Equity Security (the “First Offer Shares”) that are sufficient to enable the Investor to maintain, immediately after giving effect to the sale of the actual number of shares of the Company Equity
Security that are sold in the Company Equity Security Transaction, Investor’s Ownership Percentage determined as of the date of the Investor’s Acceptance Notice (as defined in Section 3(b) below), taking into account for this purpose
the number of shares of such Company Equity Security that are purchased by or for the account of Investor in such Company Equity Security Transaction pursuant to this Section 3(a) and Section 3(b) below. 

(b) Exercise of Right of First Offer. The Company shall give written notice (an “Issuance Notice”) of any
proposed Company Equity Security Transaction (as described in Section 3(a) above) to the Investor not less than twenty (20) calendar days prior to the expected consummation date of such Company Equity Security Transaction; provided
that no Issuance Notice need be given in respect of any Exempt Share Transaction (as hereinafter defined). Such Issuance Notice shall set forth (i) the number of, and the price at which and the other material terms and conditions on which, such
shares of Company Equity Security are proposed to be sold in such Company Equity Security Transaction, and (ii) the number of First Offer Shares that the Investor will be entitled to purchase (determined as provided in Section 3(a) above),
assuming the actual sale of all of the Company Equity Securities proposed to be sold in such Company Equity Security Transaction. At any time during the 20 calendar day period following the receipt of such an Issuance Notice (the
“Acceptance Period”), the Investor shall have the right to elect to purchase all or a portion of such 

  
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First Offer Shares at the price and on the terms and conditions specified in the Issuance Notice, by delivering to the Company, prior to the end of such 20 calendar day Acceptance Period, a
written notice specifying the number of First Offer Shares which the Investor is electing to purchase (an “Acceptance Notice”). Subject to the proviso set forth hereinafter in this Section 3(b) and the provisions of
Section 3(c) below, any purchase of First Offer Shares by the Investor pursuant to this Section 3 shall be consummated concurrently with the consummation of the sale of shares in the Company Equity Security Transaction described in the
Issuance Notice, at which time the Investor shall be obligated to pay to the Company the purchase price, as set forth in such Issuance Notice, of the First Offer Shares which the Investor has elected to purchase; provided, however,
that, if governmental or regulatory approvals are required to be obtained by the Investor to permit it to purchase any of such First Offer Shares, the Company shall not be obligated to sell those First Offer Shares to Investor unless such approvals
are obtained by Investor within sixty (60) days after the date of the Investor’s Acceptance Notice, in which case a second closing shall be held on the fifth (5th) business day following the receipt of such approvals at which closing
the remaining First Offer Shares will be purchased and paid for by the Investor. 
 (c) Change in Number of Shares Sold in a
Company Equity Security Transaction. Notwithstanding anything to the contrary that may be contained elsewhere in this Section 3, in the event that the total number of shares of Company Equity Security that are actually sold in any Company
Equity Security Transaction with respect to which the Investor has exercised its Right of First Offer pursuant to Sections 3(a) and 3(b) above, is less than the number of shares of Company Equity Security set forth in the Issuance Notice for
such Transaction, then, the number of First Offer Shares which the Investor may purchase pursuant to this Section 3 by reason of such Company Equity Security Transaction shall be proportionately reduced, as it is the purpose of this
Section 3 to enable the Investor to preserve, but not increase, its Ownership Percentage (as provided in Section 3(a) above). On the other hand, if the total number of shares of Company Equity Security that are actually sold in any Company
Equity Security Transaction with respect to which the Investor has exercised its Right of First Offer, in full, pursuant to Sections 3(a) and 3(b) above, exceeds the number of shares of Company Equity Security that were proposed to be sold in a
Company Equity Security Transaction as set forth in the Issuance Notice with respect thereto, then, the number of First Offer Shares that the Investor shall be entitled to purchase shall be proportionately increased for the increase in the number of
shares of Company Equity Security that are sold in such Company Equity Security Transaction (such increase in the number of First Offer Shares, the “Additional First Offer Shares”). In the event of any such increase, the Company
shall provide a written notice (an “Additional First Offer Share Notice”) of the increase to the Investor if the Investor had purchased all of the First Offer Shares set forth in the Issuance Notice and, subject to the proviso in
the last sentence of Section 3(b) above, the Investor shall have (i) ten (10) days thereafter to elect, by written notice to the Company, to purchase some or all of such Additional First Offer Shares and (ii) five business days
thereafter to consummate the purchase of the Additional First Offer Shares it has elected to purchase. 
 (d) Right of
Company to Sell First Offer Shares to Third Parties. If the Investor fails (i) to exercise its right to purchase or to consummate its purchase of any First Offer Shares in full pursuant to Section 3(a) above within the 20-day
Acceptance Period or (ii) to exercise its right to purchase or fails to consummate its purchase of any of the Additional First Offer Shares in full within the 10-day period set forth in Section 3(c) above, the Company shall be free, for a
period that will end on the later of (x) one hundred eighty (180) calendar days thereafter, or (y) the offering termination date (if any), as such termination date may be extended, as specified in any offering materials prepared by
the Company in connection with such Company Equity Security Transaction, to offer and sell to any other person or persons those of the First Offer Shares and Additional First Offer Shares (if any) which the Investor failed to purchase hereunder, on
terms that are not materially less favorable to the Company than those set forth in the Issuance Notice, except that the number of shares of the Company Equity Security to be sold by the Company in such Transaction may be increased by the number of
First Offer Shares and the number of Additional First Offer Shares that the Investor failed to purchase. 
 (e) Exempt Share
Transactions. The foregoing notwithstanding, the Investor’s rights under Section 3(a) shall not apply to any sales of Company Equity Securities in any of the following transactions or offerings (each, an “Exempt Share
Transaction” and, collectively, “Exempt Share Transactions”): 
 (i) shares of Common Stock or other
Company Equity Securities issued on conversion of the Series B Preferred Stock or the Series C Preferred Stock, in accordance with the respective terms thereof; 
 (ii) shares of Common Stock or other Company Equity Securities issued as a dividend or distribution on the Series B Preferred Stock or Series C Preferred Stock, in accordance with the respective
terms thereof; 

  
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 (iii) shares of Common Stock or other Company Equity Securities issued by reason of a
dividend, stock split, split-up or other distribution on shares of Common Stock which does not result in a change in the Investor’s Ownership Percentage; 
 (iv) shares of Common Stock or other Company Equity Securities issued or issuable pursuant to the exercise or exchange of any Common Stock Equivalents, provided that the exercise prices of such
Common Stock Equivalents are not decreased and the number of Company Equity Securities issuable upon exercise of such Common Stock Equivalents are not increased other than in accordance with the terms of such Common Stock Equivalents; provided
further, that in the case of compensatory Common Stock Equivalents granted or issued, in the form of stock options, stock purchase warrants or other similar rights to purchase Common Stock, to directors, officers, employees or consultants to the
Company, the exercise price of such Common Stock Equivalents was equal to or greater than the closing price of the Common Stock on the date of grant or issuance of such Common Stock Equivalents; 

(v) shares of Company Equity Securities sold and issued by the Company in a rights offering to the holders of the Company’s
outstanding Common Stock in which the Investor is entitled to participate (either directly or as a holder of Series B Shares), and the rights to purchase such shares of Common Stock to be distributed to the Company shareholders in such rights
offering; 
 (vi) the adoption of or the grant or exercise of rights under a Shareholder Rights Plan (commonly known as a
“poison pill”) and the issuance of any shares of Common Stock or other securities thereunder at an exercise price for the rights equal to or above the fair market value of the Common Stock at the time of such issuance; 

(vii) shares of Common Stock or any other Company Equity Securities issued or that may become issuable pursuant to (A) the
acquisition of another Person by the Company, or any subsidiary thereof, whether by merger or other statutory reorganization, or (B) a purchase by the Company or any of its subsidiaries of all or substantially all of the assets of another
Person, (C) the acquisition of shares or other voting securities of another Person by the Company or any of its subsidiaries, and (D) a joint venture or partnership agreement (each of such transactions, an “Acquisition
Transaction”), provided that in each case the issuance of Common Stock or other Company Equity Securities, as the case may be, has been or is approved by the Company’s Board of Directors and provided further that any
Company Equity Securities issued or issuable in connection with any Acquisition Transaction the primary purpose of which is to raise capital for the Company or its subsidiaries (other than nominal amounts of capital), issued in one or more related
transactions that result in similar economic consequences, shall not be deemed to be an Exempt Share Transaction; 
 (viii) the
sale and issuance of Carpenter Common Shares pursuant to the Amended CSPA; 
 (ix) the issuance of the Stock Purchase Warrants
pursuant to the Amended CSPA or to SBAV and the shares issuable on exercise thereof (the “Warrant Shares”); 

(x) any other public offering by the Company of shares of any Company Equity Securities (including Common Stock or Common Stock
Equivalents) registered under the Securities Act. 
 (f) Termination of First Offer Rights. Notwithstanding anything to
the contrary that may be contained in this Section 3 or elsewhere in this Agreement, if the Investor has become entitled to the First Offer Rights under this Section 3 as a result of its consummation of the purchase of the Carpenter Common
Shares under the Amended CSPA, then such First Offer Rights shall continue in effect thereafter until the Rights Termination Date, whereupon such First Offer Rights shall terminate. 

Section 4. Right to Purchase Securities of the Bank or any Bank Entity. From and after the date of this Amended Agreement and
continuing until the Rights Termination Date, the Investor shall have the rights set forth hereinafter in this Section 4 (“Bank Entity Securities First Offer Rights”). 

(a) Right of First Offer. If the Company or any Bank Entity proposes to consummate a sale or issuance of any Bank Equity
Securities (a “Bank Entity Equity Security Transaction”), then, on the terms and conditions set forth hereinafter in this Section 4, and subject to the exceptions for Bank Entity Exempt Share Transactions that are set forth in
Section 4(e) below, the Bank Entity will offer to sell to the Investor, for the same purchase price that is paid for the shares of the Bank Entity Equity Security being sold in such Bank Entity Equity Security Transaction (with non-cash
consideration valued at its fair market value), a number of shares of Bank Entity Equity Security (the “Bank 

  
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Entity First Offer Shares”) as follows: the percentage of the shares of Bank Entity Equity Security offered to the Investor in the Bank Entity Equity Security Transaction shall equal
to the Ownership Percentage of the Investor as of the date of the Bank Entity First Offer Acceptance Notice (as defined in Section 4(b) below) received from Investor, taking into account for this purpose the number of shares of such Bank Entity
Equity Security that are purchased by or for the account of the Investor in such Bank Entity Equity Security Transaction pursuant to this Sections 4(a) and Section 4(b) below; provided, however, that, if governmental or regulatory
approvals are required to be obtained by the Investor to permit it to purchase any of such Bank Entity First Offer Shares, the Company shall not be obligated to sell those Bank Entity First Offer Shares to Investor unless such approvals are obtained
by Investor within sixty (60) days after the date of the Investor’s Acceptance Notice, in which case a second closing shall be held on the fifth (5th) business day following the receipt of such approvals at which closing the remaining
Bank Entity First Offer Shares will be purchased and paid for by the Investor. 
 (b) Exercise of Right of First Offer.
The Bank Entity shall give written notice (a “Bank Entity Issuance Notice”) of any proposed Bank Entity Equity Security Transaction (as described in Section 4(a) above) to the Investor not less than twenty (20) calendar
days prior to the expected consummation date of such Bank Entity Equity Security Transaction; provided that no Bank Entity Issuance Notice need be given in respect of any Bank Entity Exempt Share Transaction (as hereinafter defined). Such
Bank Entity Issuance Notice shall set forth (i) the number of shares of Bank Entity Equity Securities that, and the price at which and the other material terms and conditions on which such shares of Bank Entity Equity Securities, are proposed
to be sold in such Bank Entity Equity Security Transaction, and (ii) the number of Bank Entity First Offer Shares that the Investor will be entitled to purchase pursuant to Section 4(a), assuming that all of the shares of the Bank Entity
Equity Security proposed to be sold in such Bank Entity Equity Security Transaction are actually sold. At any time during the 20 calendar day period following the receipt of such a Bank Entity Issuance Notice (the “Bank Entity
Acceptance Period”), the Investor shall have the right to elect to purchase all or a portion of the number of Bank Entity First Offer Shares which the Investor is entitled to purchase by reason of such Bank Entity Equity Security
Transaction, at the price specified in the Bank Entity Issuance Notice, by delivering to the Bank, prior to the end of such 20 calendar day Acceptance Period, a written notice specifying the number of Bank Entity First Offer Shares which the
Investor is electing to purchase (a “Bank Entity Acceptance Notice”). Subject to the proviso set forth hereinafter in this Section 4(b) and the provisions of Section 4(c) below, any purchase of Bank Entity First Offer
Shares by the Investor pursuant to this Section 4 shall be consummated concurrently with the consummation of the sale of shares in the Bank Entity Equity Security Transaction described in the Bank Entity Issuance Notice, at which time the
Investor shall be obligated to pay the purchase price, as set forth in the Bank Entity Issuance Notice, of the Bank Entity First Offer Shares which the Investor has elected to purchase; provided, however, that, if any governmental or
regulatory approvals are required to be obtained by the Investor to permit it to purchase any of such Bank Entity First Offer Shares, the Bank Entity shall not be obligated to sell those Bank Entity First Offer Shares to Investor unless such
approvals are obtained by Investor within sixty (60) days after the date of the Investor’s Bank Entity Acceptance Notice, in which case a second closing shall be held on the fifth (5th) business day following the receipt of such
approvals at which closing the remaining Bank Entity First Offer Shares will be purchased and paid for by the Investor. 
 (c)
Change in Number of Shares Sold in a Bank Entity Equity Security Transaction. Notwithstanding anything to the contrary that may be contained elsewhere in this Section 4, in the event that the total number of shares of Bank Entity Equity
Security that are actually sold in any Bank Entity Equity Security Transaction with respect to which the Investor has exercised its Bank Entity Right of First Offer pursuant to Sections 4(a) and 4(b) above, is less than the number of Bank
Entity Equity Securities set forth in the Bank Entity Issuance Notice, then, the number of Bank Entity First Offer Shares which the Investor may purchase pursuant to this Section 4 by reason of such Bank Entity Equity Security Transaction shall
be proportionately reduced, so that the percentage of Bank Entity Equity Securities purchased by the Investor in the Bank Entity Equity Security Transaction shall equal the Investor’s Ownership Percentage on the date of the Bank Entity
Acceptance Notice received from the Investor. On the other hand, if the total number of shares of such Bank Entity Equity Security that are actually sold in such Transaction with respect to which the Investor has exercised its Bank Entity Right of
First Offer, in full, pursuant to Sections 4(a) and 4(b) above, exceeds the number of Bank Entity Equity Securities that were proposed to be sold as set forth in the Bank Entity Issuance Notice for such Bank Entity Equity Security Transaction,
then, the number of Bank Entity First Offer Shares that the Investor shall be entitled to purchase shall be proportionately increased for the increase in the number of shares of Bank Entity Equity Security that were sold in such Bank Entity Equity
Security Transaction (such increased number of Bank Entity First Offer Shares, the “Additional Bank Entity First Offer Shares”). In the event of any such increase, the Bank Entity shall provide written notice (an “Additional
Bank Entity First Offer Share Notice”) of the increase to the Investor if the Investor had purchased all of the Bank Entity First Offer Shares set forth in the Bank Entity Issuance Notice and, subject to the proviso in the last sentence of
Section 4(b) above, the Investor shall have (i) ten (10) days thereafter to elect, by written 

  
 8 

 
notice to the Bank, to purchase some or all of such additional Bank Entity First Offer Shares and (ii) five business days thereafter to consummate the purchase of the Additional Bank Entity
First Offer Shares it has elected to purchase. 
 (d) Right of Bank Entity to Sell Bank Entity First Offer Shares to Third
Parties. If the Investor fails (i) to exercise its right to purchase or to consummate its purchase of the Bank Entity First Offer Shares in full pursuant to Section 4(a) above within the 20-day Acceptance Period, or (ii) to
exercise its right to purchase or to consummate its purchase of, the Additional Bank Entity First Offer in full pursuant to Section 4(c), as the case may be, then the Bank Entity shall be free, for a period that will end on the later of
(x) one hundred eighty (180) calendar days thereafter, or (y) the offering termination date (if any), as the same may be extended by the Bank Entity, as specified in any offering materials prepared by the Bank Entity in connection
with such Bank Entity Equity Security Transaction, to offer and sell those of the Bank Entity First Offer Shares or any of the Additional Bank Entity First Offer Shares (as the case may be) which the Investor failed to purchase hereunder to any
other Person on terms that are not materially less favorable to the Bank Entity than those set forth in the Bank Entity Issuance Notice (except that the number of Bank Entity Equity Securities to be sold by the Bank Entity in such Bank Entity Equity
Security Transaction may be increased by the number of Bank Entity First Offer Shares or Additional Bank Entity First Offer Shares (as the case may be) that the Investor failed to purchase). 

(e) Exempt Share Transactions. The foregoing notwithstanding, the Investor’s rights under Section 4(a) and
Section 4(b) shall not apply to any sales of Bank Entity Equity Securities in any of the following transactions or offerings (each, a “Bank Entity Exempt Share Transaction” and, collectively, the “Bank Entity Exempt
Share Transactions”): 
 (i) shares of Bank Entity common stock or other Bank Entity Equity Securities issued by
reason of a dividend, stock split, split-up or other distribution on shares of Bank Entity common stock which does not result in a change in the ownership percentage of the underlying security holders; 

(ii) shares of Bank Entity common stock or other Bank Entity securities issued or issuable pursuant to the exercise or exchange of any
Bank Entity Common Stock Equivalents, provided that the exercise prices of such Bank Entity Common Stock Equivalents are not decreased and the number of Bank Entity Equity Securities issuable upon exercise or as a result of the exchange of
such Bank Entity Common Stock Equivalents are not increased other than in accordance with the terms of such Bank Entity Common Stock Equivalents; provided further, that in the case of compensatory Bank Entity Common Stock Equivalents granted
or issued in the form of stock options, stock purchase warrants or similar stock purchase rights, to directors, officers or employees of or consultants to the Bank Entity, the exercise price was equal to or greater than the closing price of the
shares of Bank Entity common stock, or if there is no market for such common stock, then, the fair market value of such shares of Bank Entity common stock (as determined in good faith by its Board of Directors) on the date of grant or issuance of
such Bank Entity Common Stock Equivalents; 
 (iii) shares of Bank Entity common stock or other Bank Entity Equity Securities
issued or that may become issuable pursuant to (A) the acquisition of another Person by the Bank Entity, or any subsidiary thereof, whether by merger or other statutory reorganization, or (B) a purchase by the Bank Entity of all or
substantially all of the assets of another Person, (C) the acquisition by the Bank Entity of more than 50% of the voting securities of another Person, and (D) a joint venture or partnership agreement (each of such transactions, a
“Bank Entity Acquisition Transaction”), provided that in each case the issuance of Bank Entity common stock has been or is approved by the Bank Entity’s Board of Directors, and provided further that any Bank
Entity Equity Securities issued or issuable in connection with any such Bank Entity Acquisition Transaction the primary purpose of which is to raise capital for the Bank Entity or its subsidiaries (other than nominal amounts of capital), in one or
more related transactions shall not be deemed to be a Bank Entity Exempt Share Transaction. 
 (iv) shares of Bank Entity
common stock issued on conversion of any convertible preferred stock or as a dividend or distribution on any preferred stock which a Bank Entity may issue prior to the Rights Termination Date, provided that the Bank Entity offered to sell to the
Investor shares of such convertible preferred stock pursuant to and in accordance with Sections 4(a) and 4(b) above; 

(v) any public offering of shares of any Bank Entity Equity Securities (including shares of Bank Entity common stock or Common Stock
Equivalents) pursuant to either an exemption from the registration requirements of or a registration statement filed under the Securities Act. 

  
 9 

 (f) Termination of Bank Entity First Offer Rights. Notwithstanding anything to the
contrary that may be contained in this Section 4 or elsewhere in this Agreement, if the Investor has become entitled to the Bank Entity First Offer Rights under this Section 4 as a result of its consummation of the purchase of the
Carpenter Common Shares pursuant to the Amended CSPA, then such Bank Entity First Offer Rights shall continue in effect thereafter until the Rights Termination Date, whereupon such First Offer Rights shall terminate. 

Section 5. Board Representation. 
 (a) Appointment to Company Board of Directors and Committees. Provided that Investor has consummated the purchase of the Carpenter Common Shares under the Amended CSPA, then, the Company will
appoint, on the terms and conditions set forth hereinafter in this Section 5, three (3) individuals, designated in writing by the Carpenter Funds, each of whom must meet the qualifications to be a Carpenter Nominee and one whom must meet
the qualifications to be a Carpenter Independent Director Nominee (collectively, the “Investor Board Nominees”) to the Company’s Board of Directors effective as soon as practicable after the later of (i) the date on which the
Required Regulatory Approvals for their appointments to the Board of Directors have been received, or (ii) the date on which the Company’s shareholders approve the Bylaw Amendment, as defined below (the “Director Appointment
Date”); provided, however, that notwithstanding the foregoing, if 100% of the Purchased Shares are not Beneficially Owned by the Investor at the closing of its purchase of the Carpenter Common Shares pursuant to the Amended CSPA,
then the number of individuals the Carpenter Funds shall be entitled to nominate to the respective Boards of Directors of the Company shall be determined pursuant to subparagraphs (i), (ii), (iii) and (iv) of Section 5(c) below.
Effective upon his or her appointment to the Company’s Board of Directors, each Investor Board Nominee will be eligible (but not required) to serve as a member of the committees of the Board of Directors of the Company as determined by the
Company’s Board of Directors, provided that, such Investor Board Nominee satisfies the requirements under applicable laws, rules and regulations, including NASDAQ rules, with regard to the appointment of members and their service on such
committees. Following his or her appointment to the Company Board of Directors, the Carpenter Independent Director Nominee, if he or she meets the requirements of Rule 10A-3 under the Exchange Act, will be eligible to serve as a member of the Audit
Committee of the Board of Directors of the Company as determined by the Board of Directors of the Company. 
 (b)
Appointment to Boards of Directors and Committees of Bank Entities. The Investor Board Nominees who have been approved by the Company’s Board of Directors pursuant to Section 5(a) above will be appointed to serve as members of the
Boards of Directors of the Bank Entities as promptly as practicable following the later of: (i) the date on which Investor consummated the purchase of the Carpenter Common Shares pursuant to the Amended CSPA or (ii) the date as of which
the Required Regulatory Approvals for their appointments to those Boards of Directors have been received; provided, however, that notwithstanding the foregoing, if 100% of the Purchased Shares are not Beneficially Owned by the Investor at the
closing of its purchase of the Carpenter Common Shares pursuant to the Amended CSPA, then the number of individuals the Carpenter Funds shall be entitled to nominate to the respective Boards of Directors of the Bank Entities shall be determined
pursuant to subparagraphs (i), (ii), (iii) and (iv) of Section 5(c) below. Effective upon the their appointment to the Board of Directors of the Company, each Investor Board Nominee will be eligible (but not required) to serve as a
member of the respective committees of the Boards of Directors of each Bank Entity as determined by their respective Boards of Directors, provided that, such Carpenter Nominee satisfies the requirements under applicable laws, rules and
regulations, including NASDAQ rules, with regard to the appointment of members and their service on such committees. Following the appointment of Carpenter Independent Director Nominee to the Board of Directors of the Company, he or she will be
eligible to serve as a member of the respective Audit Committees of the Boards of Directors of the Bank Entities as determined by the Board of Directors of the Company. 
 (c) Effect of Changes in Beneficial Ownership on Director Appointment Rights. The respective Boards of Directors of the Company and each Bank Entity shall nominate the Carpenter Nominees and the Carpenter
Independent Director Nominee, or any person designated by the Investor to serve in any Nominee’s place that meets the qualifications to be a Carpenter Nominee or a Carpenter Independent Director Nominee, as applicable, for election to the
respective Boards of Directors of the Company and each Bank Entity for an additional one year term at each meeting of their respective shareholders at which directors are elected, until the earlier of (i) the Rights Termination Date applicable
to this Section 5 as set forth above in this Agreement, or (ii) the Investor Beneficially Owns a lesser percentage of Purchased Shares as follows (the “Purchased Shares Percentages”): 

(i) Subject in all cases to the limitations set forth in subparagraph (iv) of this Section 5(c) below, if the Investor
Beneficially Owns (calculated without duplication) at least 78% of the Purchased 

  
 10 

 
Shares (measured assuming that any Series B Shares comprising part of those Purchased Shares have been converted into shares of Company Common Stock), the Investor may designate three
(3) Investor Director Nominees, one (1) of whom meets the qualifications to be a Carpenter Independent Director Nominee to become and serve as a member of the respective Boards of Directors of the Company and each Bank Entity; 

(ii) Subject in all cases to the limitations set forth in subparagraph (iv) of this Section 5(c) below, if the Investor
Beneficially Owns (calculated without duplication) at least 50% but less than 78% of the Purchased Shares (measured assuming that any Series B Shares comprising part of those Purchased Shares have been converted into shares of Company Common
Stock), then the number of Investor Director Nominees who may be appointed or elected to and serve on the respective Boards of Directors of the Company and each Bank Entity shall be reduced to two (2), one (1) of whom meets the
qualifications to be a Carpenter Independent Director Nominee; 
 (iii) Subject in all cases to the limitations set forth in
subparagraph (iv) below, if the Investor Beneficially Owns (calculated without duplication) at least 25%, but less than 50%, of the Purchased Shares (measured assuming that any Series B Shares comprising part of those Purchased Shares have
been converted into shares of Company Common Stock), then the number of Investor Director Nominees who may be appointed or elected to and serve on the respective Boards of Directors of the Company and each Bank Entity shall be reduced to one (1);
and 
 (iv) Notwithstanding anything to the contrary that may be contained elsewhere in this Section 5 or in this
Section 5(c), in no event shall the Investor be entitled to designate a number of individuals for appointment or election to the respective Boards of Directors of the Company and each Bank Entity which exceeds the product of: (i) the
Investor’s then Ownership Percentage, and (ii) as applicable, the total number of directors on the respective Boards of Directors of the Company and each Bank Entity, provided that if such product is not a whole number, it shall be
rounded up to the next whole number and provided, further, in no event shall this subparagraph (iv) entitle the Investor to designate a number of individuals for appointment or election to the respective Boards of Directors of the
Company and each Bank Entity pursuant to this Section 5 which exceeds the number permitted by whichever of subparagraphs (i), (ii) or (iii) of this Section 5(c) is then applicable. 

(d) Bylaw Amendment. The Board of Directors shall approve and the Company shall submit a proposal for a vote of the
Company’s shareholders at its next annual shareholders meeting, which is currently scheduled to be held in May 2012, for approval of an amendment to the Company’s Bylaws to provide that the authorized number of directors shall be at least
seven (7) and not more than thirteen (13), with the exact number of directors within that range to be determined by the Board (the “Bylaw Amendment”). The Company’s Board of Directors shall recommend to shareholders that
they approve, and the Company will solicit proxies from shareholders for approval of that Bylaw Amendment. If the Company’s shareholders fail to approve the Bylaw Amendment at the next annual meeting of shareholders, then (i) the Company
shall re-submit such Bylaw Amendment for approval of the Company’s shareholders at each annual shareholders meeting thereafter that is held prior to the Rights Termination Date, and (ii) pending the receipt of such approval from the
Company’s shareholders, the Investor will be entitled to exercise and have Board Observation Rights set forth in Section 5(k) below. 
 (e) Filling of Vacancies in Investor Board Positions. If a Carpenter Independent Director Nominee or a Carpenter Nominee ceases, prior to the Rights Termination Date, to serve as a director of the
Company and/or a Bank Entity, as the case may be, for any reason, the Company shall cause the vacancy or vacancies created thereby to be filled by appointment of an individual designated in writing by Investor, who is determined, in accordance with
the provisions of Section 5(a) above, to qualify as a Carpenter Independent Director Nominee or a Carpenter Nominee, as the case may be. 
 (f) Failure of Investor Director Nominee to be Elected by Shareholders. If a Carpenter Independent Director Nominee or Carpenter Nominee is nominated by the Company for election to the Board of
Directors of the Company pursuant to this Section 5, but fails to be elected by the Company’s shareholders, then, subject to the proviso set forth in Section 5(g) below and unless the Rights Termination Date has occurred, the Company
shall, as soon as practicable thereafter, increase the size of such Board of Directors and appoint an individual (different from the individual who was not elected) who the Investor designates in writing and who (i) is determined, in accordance
with the process set forth in Section 5(a) above, to qualify as a Carpenter Independent Director Nominee or a Carpenter Nominee, as the case may be, and (ii) has received the Required Regulatory Approvals to serve on the Board of Directors
of the Company. 

  
 11 

 (g) Increases in Number of Directors. If an increase in the size of the Board of
Directors is required to enable the Company to meet its obligations under this Section 5 and a corresponding increase is required in order to maintain an odd number of directors, then the Company and/or the Bank Entity shall make such
corresponding increase and the respective Board of Directors shall appoint an individual to fill the vacancy created thereby; provided, however, that no increase in the size of the Board of Directors of the Company or of any Bank
Entity shall be required if it would cause the size of the Company’s Board of Directors or any Bank Entity to exceed the maximum size permitted under the Company’s or such Bank Entity’s articles of incorporation or bylaws and, in such
event, the Company and/or the Bank Entity, as the case may be, shall use its respective commercially reasonable efforts to obtain the approval of its shareholders of an amendment to its articles of incorporation or bylaws to increase the number of
directorships necessary to appoint such Carpenter Independent Director Nominee or Carpenter Nominee or such additional director (as the case may be). 
 (h) Director Compensation. The Carpenter Nominees shall receive the same compensation, indemnification, insurance, advancement of expenses and other similar compensatory rights in connection with
his or her role as a non-employee director as the other non-employee members of the Board of Directors, and the Carpenter Nominees shall be entitled to reimbursement for reasonable out-of-pocket expenses incurred in attending meetings of the Board
of Directors or any committee thereof, to the same extent as the other non-employee members of the Board of Directors. The Company shall notify the Carpenter Nominees(s) of all regular meetings and special meetings of the Board of Directors (and
each written consent in lieu of a meeting) and of all regular and special meetings of any committee of the Board of Directors on which they serve (and each written consent in lieu of a meeting) to the same extent as other directors or committee
members (as the case may be) are so notified. The Company and each Bank Entity shall provide the Carpenter Nominees with copies of all notices, minutes, consents, documents, information, presentations, data and other material that it provides to all
other members of the Board of Directors concurrently as such materials are provided to the other members and shall provide other information as is reasonably requested. 
 (i) Limitation on Interim Changes in Authorized Number of Directors. Effective upon the Director Appointment Date and continuing until the Carpenter Nominees have been duly appointed to the Board
of Directors of the Company pursuant to Section 5(a) above, the Company covenants that it will not, and its Board of Directors shall not, seek to have the shareholders of the Company consider an amendment to the Bylaws of the Company that would
have the effect of increasing the maximum size of the Board of Directors to any number greater than thirteen (13). 
 (j)
Possible Changes in Board Composition. Effective on the Director Appointment Date, the Company will cause that number of its incumbent directors required in order to accommodate the Company’s obligations arising under this Section 5
and its obligations under the corresponding provisions of the SBAV Investor Rights Agreement, to resign from the respective Boards of Directors of the Company and each Bank Entity. The Company and the Investor shall consult with each other regarding
the respective resignations to ensure that the resulting board composition of the Company shall be appropriate and shall comply with the NASDAQ Marketplace Rules. 
 (k) Board Observation Rights. Until at least one of the Carpenter Nominees has been appointed to the respective Boards of Directors of the Company and each Bank Entity pursuant to Section 5(a)
above, Investor may designate a representative, reasonably acceptable to the Company Board of Directors, who shall be invited by the Company and each such Bank Entity to attend, in a nonvoting observer capacity, all of their respective Board
meetings and, at the option of such Investor’s representative, at each of the respective committees of the Boards of Directors of the Company and each Bank Entity for which such Investor’s representative qualifies and, in that capacity,
shall give such representative copies of all notices, minutes, consents, and other materials that it provides to its directors at the same time and in the same manner as provided to such directors; provided, however, that such representative
shall agree, in writing, on terms reasonably acceptable to the Company and the Bank, to hold in confidence and trust, all information so provided or to which such representative will have access while attending any such Board or committee meetings
and to not make any use of any such information except for the sole and exclusive benefit of the Company and the Bank Entities, to the same extent as if such representative was a member of the Boards of Directors of the Company and such Bank
Entities; and provided, further, that the Company and each such Bank Entity reserves the right (which it will exercise reasonably) to withhold any information and to exclude such representative from any meeting or portion thereof if
access to such information or attendance at such meeting (i) could adversely affect the attorney-client privilege between the Company and/or the Bank Entity and its counsel, (ii) could result in disclosure of trade secrets or competitively
sensitive information or create a conflict of interest, (iii) would give the Investor representative access to, or could result in the disclosure to such representative or to the Investor or any of its affiliates, of any non-public personal
customer information or any financial or other records or data of or in the possession of any Bank Entity pertaining to any 

  
 12 

 
customers or prospective customers of any such Bank Entity, including with respect to any past, present or future banking transactions between any Bank Entity and any such customer or prospective
customer; or (iv) would give the Investor representative access to, or could result in the disclosure to such representative or his or her affiliates or to Investor or any of its affiliates, of or with respect to any communications (written or
oral) from or to any federal or state banking authority or agency that has regulatory jurisdiction over the Company or any such Bank Entity if the disclosure thereof to the Investor representative or to Investor or any of its affiliates would
violate federal or state laws or government regulations or any order, directive or instruction of any such bank regulatory authority or agency. 
 Section 6. Related Party Transactions. The approval of the independent directors of the Company shall be required for any proposed transaction, or a series of related transactions, involving more
than one million dollars ($1,000,000), between the Company or the any Bank Entity and (i) any director or executive officer of the Company or any Bank Entity, (ii) any nominee for election as a director of the Company or any Bank Entity,
(iii) any security holder who is known to the Company to own of record or beneficially more than 5% of any class of the Company’s voting securities, or (iv) any Affiliate of or member of the immediate family of any of the foregoing
persons (each a “Related Party Transaction”); provided, that no independent director who is not disinterested with respect to the transaction shall be entitled to vote on the approval of the transaction provided further that
if the value of a Related Party Transaction exceeds five million ($5,000,000), the Company or the Bank Entity must first obtain a Fairness Opinion. Notwithstanding the foregoing, however, the foregoing requirement shall not apply to (x) any
loan or extension of credit or any other banking transaction in the ordinary course of the Bank Entity’s business which complies with applicable banking laws and regulations, or (y) any transactions entered into by the Company or the Bank
Entity prior to the date hereof. 
 Section 7. Termination of this Agreement. Notwithstanding anything to the contrary
that may be contained elsewhere herein, this Agreement shall terminate on the earlier of (i) the termination of the Amended CSPA or (ii) the Rights Termination Date. 
 Section 8. Notices. Any notice or other communication under or pertaining to this Agreement must be in writing and will be deemed given and received when it is delivered in person, sent by
facsimile or email (with proof of receipt at the facsimile number or email address to which it is required to be sent), or on the business day after the day on which it is delivered, with charges prepaid, to a major nationwide delivery service for
overnight delivery, or on the third (3rd)business day after the day on which it is mailed by first class mail (postage prepaid) from within the United States, to the following addresses (or such other address as may be specified after the date of
this Agreement by the party to which the notice or communication is sent): 
  

					
	If to the Company:	  	With a copy to:	  	
			
	 Pacific Mercantile Bancorp
 949
South Coast Drive, Suite 300
 Costa Mesa, California 92626
 Attn. Raymond E. Dellerba
 Tel: (714) 438-2500

Fax: (714) 438-1076
	  	 Stradling Yocca Carlson & Rauth
 660 Newport Center Drive, Suite 1600
 Newport Beach, CA 92660

Attn: Ben A. Frydman,
 Tel: (949)
725-4000
 Fax: (949) 725-4100
	  	
			
	If to the Investor:	  	With a copy to:	  	
			
	 Carpenter Funds
 5 Park Plaza,
Suite 950
 Irvine CA, 92614
 Attention:
John Flemming
	  	 Robert Sjogren, Esq.
 Carpenter
Funds
 5 Park Plaza, Suite 950
 Irvine,
CA 92614
	  	

 Any party may change its address for notice purposes by giving written notice of such new address, by one
of the means set forth above in this Section 8, which change of address shall be effective on the tenth day following its deemed delivery as set forth above in this Section 8. 

Section 9. Assignment. The provisions of Section 5 of this Agreement may not be assigned by the Investor without the prior
written consent of the Company, which consent may be withheld by the Company in its sole discretion, and any purported assignment shall be null and void in the absence of such consent. The rights under

  
 13 

 
Sections 3 and 4 of this Agreement may be assigned (but only with all related obligations) by the Investor to a transferee of Purchased Shares that, together with its Affiliates, acquires
more than 50% of Investor’s Purchased Shares measured assuming that the Purchased Shares have been converted into shares of Company Common Stock; provided that (a) prior to such transfer, the Company is furnished with written notice
stating the name and address of such transferee and identifying the securities with respect to which such rights are being transferred, and (b) such transferee agrees in writing to be bound by and subject to the terms and conditions of this
Agreement. Subject to the foregoing restriction on assignment, this Agreement will be binding upon, and will inure to the benefit of and be enforceable by, the parties hereto and their respective successors and permitted assigns. 

Section 10. Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto in respect
of the subject matter contained herein. This Agreement supersedes all prior written and prior or contemporaneous oral agreements and understandings between the parties with respect to the subject matter of this Agreement, including the Predecessor
Rights Agreement, which is of no further force or effect. 
 Section 11. Governing Law. This Agreement will be governed
by and construed in accordance with the laws of the State of California, without regard to conflicts of laws principles. 

Section 12. Severability. If any provision of this Agreement or the application thereof to any person or circumstances is
determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and will in no way be affected, impaired or invalidated thereby. 
 Section
13. Waiver. Any party hereto may (a) extend the time for the performance of any of the obligations or other acts of the other party hereto, (b) waive compliance by the other party with any of such other party’s obligations or
covenants contained herein; provided, however, that any such extension or waiver shall be valid only if set forth in an instrument in writing signed by each of the parties to be bound thereby, but no such extension or waiver and no
failure to insist on strict compliance by another party hereto with an obligation or covenant hereunder shall operate as a waiver of, or estoppel with respect to, any subsequent failure to comply with the same obligation or covenant or any failure
to comply therewith by the party whose performance was waived. 
 Section 14. Other Investor Rights Agreements;
Amendment. 
 (a) Other Investor Rights Agreements. On August 26, 2011, the Company entered into the SBAV
Investor Rights Agreement which grants SBAV certain rights similar to the rights in this Agreement. Investor acknowledges and agrees that the Company may from time to time with the agreement of SBAV, amend any provision of the SBAV Investor Rights
Agreement without the approval of Investor to (a) cure any ambiguity therein, (b) correct or supplement any provision contained therein that may be defective or inconsistent with any other provisions therein, or (c) shorten or
lengthen any time period thereunder. The Company hereby agrees and acknowledges that except as set forth above, it will not agree to amend, alter or supplement the SBAV Investor Rights Agreement without the written consent of the Investor.

 (b) Investor and the Company may from time to time amend any provision of this Agreement to
(a) cure any ambiguity herein, (b) correct or supplement any provision contained herein that may be defective or inconsistent with any other provisions herein, or (c) shorten any time period hereunder. The Company and Investor hereby
agree and acknowledge that except as set forth above, they will not amend, alter or supplement this Agreement or make, directly or indirectly, any other agreement, whether written or oral, with SBAV or give any other rights or benefits to SBAV,
relating to the terms or conditions of the transactions contemplated by the Series B Purchase Agreement and the Common Stock Purchase Agreement, on terms more favorable, in form or substance, than those offered in this Agreement without the
written consent of SBAV. The Company also hereby acknowledges that it has not entered into any agreement, whether written or oral (other than the SBAV Investor Rights Agreement, the Series B Purchase Agreement, the Registration Rights Agreement
and the SBAV fee reimbursement letter) regarding the rights or benefits of SBAV, relating to the terms or conditions of the transactions contemplated by the Series B Purchase Agreement and the Common Stock Purchase Agreement. 

  
 14 

 Section 15. Miscellaneous. 

(a) Construction. For purposes of this Agreement: 
 (i) the word “or” will not be exclusive; 
 (ii) inclusion of items in a
list will not be deemed to exclude other terms of similar import; 
 (iii) all parties will be considered to have drafted this
Agreement together, with the benefit of counsel, and no provision will be strictly construed against any Person by reason of having drafted such provision; 
 (iv) the word “include” and its correlatives means including without limitation; 
 (v) terms that imply gender will include all genders; 
 (vi) defined terms will
have their meanings in the plural and singular case; 
 (vii) the terms “hereof”, “herein”,
“hereunder”, “hereto”, “hereafter” and “hereinafter” and any similar terms shall refer to this Agreement as a whole and not to the particular section, paragraph or clause where any such term appears unless the
context clearly indicates otherwise; 
 (viii) unless otherwise expressly indicated, references to Sections and Exhibits in
this Agreement are to the Sections of and Exhibits to this Agreement; 
 (ix) the Recitals to this Agreement are an integral
part of this Agreement and shall be given full effect in connection with the interpretation and construction of this Agreement. 
 (x) the use of “will” as an auxiliary will not be deemed to be a mere prediction of future occurrences; and 
 (xi) the headings in this Agreement are for convenience of reference only and will not limit or otherwise affect the interpretation or application of any of the terms or provisions of this Agreement.

 (b) Counterparts. This Agreement may be executed in any number of separate counterparts, each of which executed
counterparts, and any photocopies, facsimile copies or pdf copies of which, will be deemed to be an original, but all of which, when taken together, will constitute one and the same instrument. 

  
 15 

 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed, where
applicable by their duly authorized representatives, as of the date first above written. 
  

			
	PACIFIC MERCANTILE BANCORP
		
	By:	 	 /s/ RAYMOND E. DELLERBA

	Name:	 	Raymond E. Dellerba
	Title:	 	President and CEO
	
	CARPENTER COMMUNITY BANCFUND, L.P.; and
	CARPENTER COMMUNITY BANCFUND-A, L.P.
		
	By:	 	CARPENTER FUND MANAGER GP, LLC,their General Partner
		
	By:	 	 /s/ JOHN FLEMMING

	Name:	 	John Flemming
	Its:	 	Managing Member

 [Signature Page to Carpenter Investor Rights Agreement] 

  
 16Registration Rights Agreement

 Exhibit 10.3 

REGISTRATION RIGHTS AGREEMENT 
 This REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is made and entered into as of this 28th day of February, 2012 by and among PACIFIC MERCANTILE BANCORP, a California corporation (the
“Company”), and CARPENTER COMMUNITY BANCFUND, L.P. AND CARPENTER COMMUNITY BANCFUND-A, L.P. (hereinafter, the “Investors”). The Company and the Investors may be referred to herein, collectively, as the
“Parties” and individually as a “Party.” 
 RECITALS 

A. Concurrently herewith the Company will be selling to the Investors and the Investors will be purchasing from the Company the number of
shares of the Company’s Common Stock set forth opposite the name of each Investor on Exhibit A hereto (the “Common Shares”), pursuant to that certain Amended and Restated Common Stock Purchase Agreement between the
Company and the Investors dated February 28, 2012 (the “Common SPA”). 
 B. Subject to satisfaction of the
conditions precedent set forth in the Common SPA, the Company will issue Common Stock Purchase Warrants (the “Warrants”) to each of the Investors which will entitle them, under certain circumstances, to purchase the number of shares
of the Company’s Common Stock (the “Warrant Shares”) set forth opposite the name of such Investor on Exhibit A hereto. 
 C. Upon the closing of the transactions contemplated by the Common SPA, the Investors will own the Common Shares, and, when the Warrants become exercisable in accordance with their terms, the Investors
will be the beneficial owners of the Warrant Shares. 
 D. It is a condition precedent to the closing of the transactions
contemplated by the Common SPA that the Company shall enter into this Agreement with the Investors. 
 NOW, THEREFORE, in
consideration of the promises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the Parties, the Company and the Investors hereby agree as follows:

 AGREEMENT 
 1. DEFINITIONS. As used in this Agreement, the following terms shall have the following meanings: 
 1.1. “Affiliate” means, with respect to any Person, any other Person which directly or indirectly controls, is controlled by, or is under common control with, such Person. 

1.2. “Blue Sky Application” shall have the meaning set forth in Section 6.1(a) below. 

1.3. “Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the
general transaction of business. 
 1.4. “Common Shares” means the shares of Common Stock purchased by the
Investors pursuant to the Common SPA. 
 1.5. “Common SPA” has the meaning set forth in the Recitals.

 1.6. “Common Stock” shall mean the Company’s common stock, no par
value. 
 1.7. “Effective Date” means the date on which the Registration Statement is declared effective by the
SEC. 
 1.8. “Effectiveness Period” shall have the meaning set forth in Section 4.1 below. 

1.9. “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder. 
 1.10. “Filing Date” means the date on which the Registration Statement is filed with the SEC.

 1.11. “Filing Deadline” shall have the meaning set forth in Section 2.1(a) below. 

1.12. “Inspectors” shall have the meaning set forth in Section 4.14 below. 

1.13. “Investor Indemnified Parties” shall have the meaning set forth in Section 6.1(a) below. 

1.14. “Person” means an individual, corporation, partnership, limited liability company, trust, business trust,
association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein. 

1.15. “Prospectus” shall mean the prospectus included in the Registration Statement, as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments
and all material incorporated by reference in such prospectus. 
 1.16. “Records” shall have the meaning set
forth in Section 4.14 below. 
 1.17. “Register,” “registered” and
“registration” refer to a registration made by preparing and filing a Registration Statement or similar document in compliance with the Securities Act (as defined below), and the declaration or ordering of effectiveness of the
Registration Statement or document. 
 1.18. “Registrable Securities” shall mean (i) the Common Shares and
the Warrant Shares, and (ii) any other securities issued or issuable with respect to or in exchange for the Common Shares or the Warrant Shares, including shares issued upon any stock split, stock dividend, recapitalization, subdivision or
similar event, provided that a security shall cease to be a Registrable Security upon (A) sale pursuant to a Registration Statement or Rule 144 under the Securities Act or (B) such security becoming eligible for sale by the Investor
pursuant to the last sentence of Rule 144(b)(1)(i). 
 1.19. “Registration Statement” shall mean the
registration statement of the Company filed under the Securities Act that covers the resale of the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement. 
 1.20.
“SEC” means the Securities and Exchange Commission. 
 1.21. “Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 
 1.22. “Suspension”
shall have the meaning set forth in Section 3.1 below. 
 1.23. “Suspension Notice” shall have the
meaning set forth in Section 3.1 below. 

  
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 1.24. “Warrants” has the meaning set forth in the Recitals. 

1.25. “Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants. 

2. REGISTRATION. 
 2.1. Registration Statement. 
 (a) As soon as reasonably practicable
following the Closing Date (as defined in the Common SPA), but no later than forty-five (45) days thereafter (the “Filing Deadline”), the Company shall prepare and file with the SEC a Registration Statement on Form S-3
(the “Registration Statement”) covering the resale of the Common Shares and the Warrant Shares. The Registration Statement also shall cover, to the extent allowable under the Securities Act and the rules and regulations promulgated
thereunder, such indeterminate number of additional Registrable Securities resulting from (i) anti-dilution adjustments to the Exercise Price (as defined in the Warrants) of the Warrants, and (ii) stock splits, stock dividends and the like
with respect to the Common Shares that occur after the Closing Date. The Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided in accordance with
Section 4 to the Investors and their counsel prior to its filing or other submission. 
 (b) The Company represents
and warrants that, as of the date hereof, it meets the requirements for the use of Form S-3 for registration of the resale of the Common Shares by the Investors. The Company will file all reports required to be filed by the Company with the SEC in a
timely manner so as to preserve its eligibility for the use of Form S-3. 
 2.2. Expenses. The Company will pay all
expenses associated with registration, including filing and printing fees, the Company’s counsel and accounting fees and expenses, costs associated with clearing the Registrable Securities for sale under applicable state securities laws and
listing fees, but excluding discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar securities industry professionals with respect to the Registrable Securities being sold. 

2.3. Effectiveness. The Company shall use commercially reasonable efforts to have the Registration Statement declared effective
within 120 days after the date the Registration Statement was filed with the SEC; provided, however, that the Company shall be entitled to delay or defer the effectiveness of the Registration Statement if the Company reasonably believes, considering
the advice of counsel, that the Company may, in the absence of a delay or deferral, be required under state or federal securities laws to disclose any corporate development, the disclosure of which could reasonably be expected to have a material
adverse effect upon the Company, its stockholders, a potentially material transaction or event involving the Company, or any negotiations, discussions or proposals directly relating thereto. The Company shall notify the Investors by facsimile or
email as promptly as practicable, and in any event, within two (2) Business Days, after the Registration Statement is declared effective and shall provide the Investors with copies of any related Prospectus to be used in connection with the
sale or other disposition of the securities covered thereby. Notwithstanding anything to the contrary, the Company may not delay or defer the effectiveness of the Registration Statement for a period to exceed in the aggregate thirty (30) days.

 2.4. Prohibition on Other Registration Statements. The Company shall not file any other registration statement before
the Registration Statement is declared effective by the SEC. 
 3. SUSPENSION. 

3.1. Subject to Section 3.2 below, in the event: (i) of any request by the SEC or any other federal or state
governmental authority, during the Effectiveness Period, for amendments or supplements to the Registration Statement or related Prospectus or for additional information so that the Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or otherwise fail to comply with the applicable rules and regulations of the federal securities laws;
(ii) of the issuance by the SEC or any other federal or state governmental authority of any stop order 

  
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suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose, provided that, considering the advice of counsel, the Company
reasonably believes that it must qualify in such jurisdiction; (iv) of any event or circumstance that, considering the advice of counsel, the Company reasonably believes necessitates the making of any changes in the Registration Statement or
related prospectus, or any document incorporated or deemed to be incorporated therein by reference, so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or any omission to state a material
fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of a related Prospectus, it will not contain any untrue statement of a material fact or any omission to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; or (v) that the Company reasonably believes, considering the advice of counsel, that the
Company may, in the absence of a suspension described hereunder, be required under state or federal securities laws to disclose any corporate development, the disclosure of which could reasonably be expected to have a material adverse effect upon
the Company, its stockholders, a potentially material transaction or event involving the Company, or any negotiations, discussions or proposals directly relating thereto; then the Company shall, promptly following the occurrence of any of the
foregoing events, deliver a certificate in writing to the Investors (the “Suspension Notice”) to the effect of the foregoing (but in no event, without the prior written consent of an Investor, shall the Company disclose to such
Investor any of the facts or circumstances regarding any material nonpublic information) and, upon receipt of such Suspension Notice, the Investors will refrain from selling any Registrable Securities pursuant to the Registration Statement (a
“Suspension”) until the Investors’ receipt of copies of a supplemented or amended prospectus prepared and filed by the Company or until the Investors are advised in writing by the Company that the current Prospectus may be used
and the Investors have received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in any such Prospectus; provided that, in the case of a suspension due to (x) an event
described in clause (i), (ii), or (iii) of this Section 3.1, the Suspensions shall not be for more than an aggregate of one hundred twenty (120) days in any 365 day period and (y) an event described in clause (iv) or
(v) of this Section 3.1, the Suspensions shall not be for more than an aggregate of forty-five (45) days in any 365 day period. 
 3.2. The Company will use commercially reasonable efforts to terminate a Suspension as promptly as practicable after delivery of a Suspension Notice to the Investors. 

4. COMPANY OBLIGATIONS. The Company will use commercially reasonable efforts to effect the registration of the Registrable
Securities in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible: 
 4.1.
cause the Registration Statement to become effective and to remain continuously effective for a period that will terminate upon the earliest of (i) the date on which all Registrable Securities have been sold pursuant to the Registration
Statement, or (ii) the date on which all Registrable Securities covered by the Registration Statement may be sold pursuant to Rule 144 without restriction (the “Effectiveness Period”) and advise the Investors in writing
when the Effectiveness Period has expired; 
 4.2. (i) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement and such supplements to the Prospectus as may be necessary to keep the Registration Statement effective for the period specified in Section 4.1, (ii) respond as promptly as reasonably
possible to any comments received from the SEC with respect to each Registration Statement or any amendment thereto, and (iii) comply with the provisions of the Securities Act and the Exchange Act with respect to the distribution of all of the
Registrable Securities covered thereby during the Effectiveness Period; 
 4.3. (i) provide copies to and permit counsel
designated by each Investor to review the Registration Statement and any amendments or supplements thereto and any comments made by the staff of the SEC and the Company’s responses thereto no fewer than five (5) days prior to its filing
with the SEC or its receipt from the SEC, as applicable, and (ii) shall duly consider comments made by such counsel thereon and shall not file any Registration Statement and any amendments or supplements thereto to which such counsel reasonably
objects; provided, however, that an Investor’s counsel will be deemed to have no objections if such counsel has not provided written comments to the Company and its counsel no later than three (3) Business Days after such
Investor’s counsel as 

  
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been provided with copies of the documents listed in clause (i) of this Section 4.3. The Company shall not unreasonably reject comments from such counsel prior to the Company’s
submission of a request for acceleration of the effectiveness of a Registration Statement or any amendment or supplement thereto. The Company shall reasonably cooperate with such counsel in performing the Company’s obligations pursuant to this
Section 4.3; 
 4.4. furnish to the Investors and their respective legal counsel, without charge, (i) promptly after
the same is prepared and publicly distributed, filed with the SEC, or received by the Company (but not later than two (2) Business Days after the filing date, receipt date or sending date, as the case may be) one (1) copy of the
Registration Statement and any amendment thereto, the preliminary prospectus, free writing prospectus and Prospectus and each amendment or supplement thereto (as applicable), and each letter written by or on behalf of the Company to the SEC or the
staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, relating to the Registration Statement (other than any portion of any thereof which contains information for which the Company has sought confidential
treatment), and (ii) an electronic copy of a Prospectus, including a preliminary prospectus and any free writing prospectus, and all amendments and supplements thereto and such other documents as counsel for the Investors may reasonably request
in connection with the disposition of such Registrable Securities owned by the Investors that are covered by the Registration Statement; 
 4.5. within two (2) Business Days after a Registration Statement which covers Registrable Securities is ordered effective by the SEC, deliver, and shall cause legal counsel for the Company to
deliver, to the transfer agent for such Registrable Securities (with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation that such Registration Statement has been declared effective by the
SEC in such form that the transfer agent may reasonably request; 
 4.6. use commercially reasonable efforts to (i) prevent
the issuance of any stop order or other suspension of effectiveness and, (ii) if such order is issued, obtain the withdrawal of any such order at the earliest practicable time and to notify the Investors of the issuance of such an order and the
resolution thereof; 
 4.7. prior to the Effective Date, use commercially reasonable efforts to register or qualify or cooperate
with the Investors and their counsel in connection with the registration or qualification of the Registrable Securities for offer and sale under the securities or blue sky laws of such jurisdictions requested by the Investors, provided that,
considering the advice of the Company’s counsel, the Company reasonably believes that it must qualify in such jurisdiction or jurisdictions, and do any and all other commercially reasonable acts or things necessary or advisable to enable the
distribution in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (i) qualify to
do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 4.7, (ii) subject itself to general taxation in any jurisdiction where it would not otherwise be so subject but for this
Section 4.7, or (iii) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify the Investors who hold Registrable Securities and their respective legal counsel of the receipt by the
Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt
of actual notice of the initiation or threatening of any proceeding for such purpose; 
 4.8. use commercially reasonable
efforts to cause all Registrable Securities covered by the Registration Statement to be listed on each securities exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed; 

4.9. otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC under the Securities
Act and the Exchange Act, take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder; 
 4.10. promptly (and in any event within two (2) Business Days following discovery) notify the Investors in writing, at any time when a Prospectus relating to Registrable Securities is required to be
delivered under the 1933 Act, upon discovery that, or upon the happening of any event as a result of which, the Prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the 

  
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circumstances then existing, and at the request of any such Investor, promptly prepare and furnish to such Investor a reasonable number of copies of a supplement to or an amendment of such
Prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the circumstances then existing. The Company shall also promptly notify each Investor and its legal counsel in writing (i) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when the Registration Statement or any post-effective amendment has become effective, (ii) of any request by the SEC for amendments or supplements to the Registration Statement or related prospectus
or related information, and (iii) of the Company’s reasonable determination of whether a post-effective amendment to the Registration Statement would be appropriate; 
 4.11. with a view to making available to the Investors the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may at any time permit the Investors to sell shares
of Common Stock to the public without registration, the Company covenants and agrees to: (a) make and keep public information available, as those terms are understood and defined in Rule 144, during the Effectiveness Period; (b) file with
the SEC in a timely manner all reports and other documents required of the Company under the Exchange Act; and (c) furnish to each Investor upon request, as long as such Investor owns any Registrable Securities, (i) a written statement by
the Company that it has complied with the reporting requirements of the Exchange Act, (ii) a copy of the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (iii) such other information as may be
reasonably requested in order to avail such Investor of any rule or regulation of the SEC that permits the selling of any such Registrable Securities without registration 
 4.12. hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless (i) disclosure of such information is necessary to comply with federal or
state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other
final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement of
which the Company has knowledge. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information; 

4.13. if requested by an Investor, (i) as soon as practicable incorporate in a prospectus supplement or post-effective amendment
such information as an Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered
or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) as soon as practicable make all required filings of such prospectus supplement or post-effective
amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) as soon as practicable, supplement or make amendments to any Registration Statement if reasonably requested by
an Investor holding any Registrable Securities to the effect of the foregoing; 
 4.14. make available for inspection by
(i) any Investor, (ii) legal counsel for the Investors and (iii) one firm of accountants or other agents retained by the Investors (collectively, the “Inspectors”), all pertinent financial and other records, and pertinent
corporate documents and properties of the Company (collectively, the “Records”), as shall be reasonably deemed necessary by each Inspector, and cause the Company’s officers, directors and employees to supply all information which any
Inspector may reasonably request; provided, however, that each Inspector shall agree to hold in strict confidence and shall not make any disclosure (except to an Investor who has agreed to receive such information and hold in strict confidence any
such information) or use of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the Securities Act, (b) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or
government body of competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure in violation of this or any other agreement of which the Inspector has knowledge. Each
Investor agrees that it shall, upon learning that 

  
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disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its
expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and any Investor) shall be deemed
to limit the Investors’ ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations; and 
 4.15. if any Investor is required under applicable securities law to be described in the Registration Statement as an underwriter and which is otherwise conducting diligence of the sort that an
underwriter could conduct, at the reasonable request of any such Investor, use commercially reasonable efforts to deliver to such Investor, on the date of the effectiveness of the Registration Statement and thereafter from time to time on such dates
as such Investor may reasonably request (i) a letter, dated such date, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to such Investor, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an
underwritten public offering, addressed to such Investor. 
 5. OBLIGATIONS OF INVESTORS. 

5.1. Each Investor shall furnish in writing to the Company such information regarding itself, the Registrable Securities held by it and
the intended method of disposition of the Registrable Securities held by it, as shall be required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may
reasonably request. At least five (5) Business Days prior to the anticipated filing date of the Registration Statement, the Company shall notify the Investors of the information the Company requires from the Investors. Each Investor shall
provide such information to the Company at least two (2) Business Days prior to the anticipated filing date of the Registration Statement. 
 5.2. Each Investor agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of a Registration Statement hereunder. 

5.3. Each Investor agrees that, upon receipt of any notice from the Company of the commencement of a Suspension pursuant to
Section 3, it will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement, until such Investor’s receipt of the supplemented or amended prospectus filed with the SEC and until any
related post-effective amendment is declared effective or until the Investors are advised in writing by the Company that the current Prospectus may be used and the Investors have received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in any such Prospectus and, if so directed by the Company, each Investor shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in such Investor’s possession of the Prospectus covering the Registrable Securities current at the time of receipt of such notice. 
 6. INDEMNIFICATION. 
 6.1. Indemnification by the Company. The
Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, the Investors and their respective directors, officers, employees, general partners, members, stockholders and each Person who controls such Investor (within the
meaning of the Securities Act) (collectively, the “Investor Indemnified Parties”) against any losses, claims, damages, liabilities and expense (including reasonable attorneys’ fees) resulting from or which arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of a material fact or any omission or alleged omission of a material fact required to be stated in the Registration Statement or Prospectus or preliminary prospectus or free
writing prospectus or amendment or supplement thereto; (ii) any blue sky application or other document executed by the Company specifically for that purpose or based upon written information furnished by the Company filed in any state or other
jurisdiction in order to qualify any or all of the Registrable Securities under the securities laws thereof (any such application, document or information herein called a “Blue Sky Application”); (iii) the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; (iv) any violation by the Company or its agents of any rule or regulation promulgated under the Securities Act applicable
to the Company or its agents and relating to action or inaction required of the Company in connection with such registration; (v) any failure to register or 

  
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qualify the Registrable Securities included in any such registration in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company will undertake
such registration or qualification on an Investor’s behalf, or (vi) any breach of this Agreement by the Company and will reimburse the Investor Indemnified Parties for any legal and other expenses reasonably incurred as such expenses are
reasonably incurred by such Investor Indemnified Party in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the Company will
not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission based upon information furnished by
such Investor in writing specifically for use in the Registration Statement or Prospectus or preliminary prospectus or free writing prospectus. The Company shall notify the Investors promptly of the institution, threat or assertion of any proceeding
of which the Company is aware in connection with the transactions contemplated by this Agreement. 
 6.2. Indemnification by
the Investors. Each Investor agrees, severally but not jointly, to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees, stockholders and each Person who controls the Company
(within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expense (including reasonable attorneys’ fees) resulting from or which arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact or any omission or alleged omission of a material fact required to be stated in the Registration Statement or Prospectus or preliminary prospectus or free writing prospectus or amendment or supplement thereto or
necessary to make the statements therein not misleading, to the extent, but only to the extent that such untrue statement or omission or alleged statement or omission is contained in any information furnished in writing by such Investor to the
Company specifically for inclusion in the Registration Statement or Prospectus or free writing prospectus or amendment or supplement thereto, and will reimburse the Company and its directors, officers, employees, stockholders or controlling Persons
for any legal and other expenses reasonably incurred as such expenses are reasonably incurred by such Person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. In
no event shall the liability of any Investor be greater in amount than the dollar amount of the proceeds received by such Investor upon the sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification
obligation, except in the case of fraud or willful misconduct. 
 6.3. Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided that any Person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of
such counsel shall be at the expense of such Person unless (a) the indemnifying party has agreed to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim within five
(5) Business Days after written notice thereof and employ counsel reasonably satisfactory to such Person or (c) in the reasonable judgment of any such Person, considering the advice of counsel, a conflict of interest exists between such
Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such claim on behalf of such Person); and provided, further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its
obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in
connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one additional firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of
such claim or litigation. 
 6.4. Contribution. If for any reason the indemnification provided for in Sections 6.1 or 6.2
is unavailable to an indemnified party or insufficient to hold it harmless as contemplated therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. No Person guilty of fraudulent misrepresentation within

  
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the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any Person not guilty of such fraudulent misrepresentation. In no event shall the contribution
obligation of any Investor be greater in amount than the dollar amount of the proceeds received by it upon the sale of the Registrable Securities giving rise to such contribution obligation. 

7. MISCELLANEOUS. 
 7.1. Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury. 

(a) Governing Law. This Agreement shall be deemed to be made in and in all respects shall be interpreted, construed and governed
by and in accordance with the law of the state of New York. 
 (b) Consent to Jurisdiction. Each Party irrevocably and
unconditionally submits, for itself and its property, to the exclusive jurisdiction any state or federal court sitting in New York, New York, Borough of Manhattan, in any proceeding arising out of or relating to this Agreement or the agreements
delivered in connection herewith or the transactions contemplated hereby or thereby or for recognition or enforcement of any judgment relating thereto, and each party hereby irrevocably and unconditionally (a) agrees not to commence any such
proceeding except in such courts, (b) agrees that any claim in respect of any such action or proceeding may be heard and determined in such courts, (c) waives, to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any such proceeding, and (d) waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such proceeding. Each Party hereto agrees
that a final non-appealable judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Applicable Law. Each Party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section 7.2. Nothing in this Agreement will affect the right of any Party to this Agreement to serve process in any other manner permitted by applicable Law. 

(c) Waiver of Jury Trial. Each Party acknowledges and agrees that any controversy which may arise under this Agreement is likely
to involve complicated and difficult issues and, therefore, each such Party hereby irrevocably and unconditionally waives any right such Party may have to a trial by jury in respect of any litigation directly or indirectly arising out of or relating
in whole or in part to this Agreement or the transactions contemplated by this Agreement. Each Party certifies and acknowledges that (i) no representative, agent or attorney of any other Party has represented, expressly or otherwise, that such
other Party would not, in the event of litigation, seek to enforce the foregoing waiver, (ii) each such Party understands and has considered the implications of this waiver, (iii) each such Party makes this waiver voluntarily, and
(iv) one of the inducements to each such Party to enter into this Agreement by, among others, are the waivers and certifications contained in this Section 7.1(b). 
 7.2. Notices. Any notice or other communication under this Agreement must be in writing and will be deemed given when it is delivered in person or sent by facsimile or email (with proof of receipt
at the facsimile number or email address to which it is required to be sent), on the Business Day after the day on which it is delivered to a major nationwide delivery service for overnight delivery, or on the fifth Business Day after the day on
which it is mailed by first class mail from within the United States, to the following addresses (or such other address as may be specified after the date of this Agreement by the party to which the notice or communication is sent): 

 

					
	 If to the Company:
	 		  	With a copy to:
	 Pacific Mercantile Bancorp
	 		  	Stradling Yocca Carlson & Rauth
	 949 South Coast Drive, Suite 300
	 		  	660 Newport Center Drive, Ste. 1600
	 Costa Mesa, California 92626
	 		  	Newport Beach California 92660
	 Attn. Raymond E. Dellerba
	 		  	Attn: Ben A Frydman
	 Tel: (714) 438-2500
	 		  	Tel: (949) 725-4150
	 Fax: (714) 438-1084
	 		  	Fax: (949) 823-5150

 If to the Investors, to their respective addresses set forth on Exhibit A. 

  
 9 

 7.3. Entire Agreement. This Agreement and the Exhibits hereto, the Common SPA and
any agreements and documents executed by the Parties simultaneously herewith, including the Warrants and the agreements, in addition to this Agreement, being entered into pursuant thereto, represent the entire understanding and agreement of the
Parties with reference to the transactions set forth herein and supersede all prior understandings and agreements (written or oral) made by the Parties. Except as otherwise expressly provided herein, no Person other than the Parties hereto shall
have any right hereunder or be entitled to the benefit of any provision hereof. 
 7.4. Assignment; Successors and
Assigns. The rights under this Agreement may be assigned (but only with all related obligations) by an Investor to a transferee of Registrable Securities that (i) is an Affiliate, partner, member, limited partner, retired partner, retired
member, or stockholder of an Investor; or (ii) after such transfer, with its Affiliates, holds a number of Registrable Securities equal to at least ten percent (10%) of the total number of Registrable Securities purchased by such Investor
pursuant to the Common SPA and Warrants (subject to appropriate adjustment for stock splits, stock dividends, combinations, and other recapitalizations); provided that (a) prior to such transfer, the Company is furnished with written
notice stating the name and address of such transferee and identifying the securities with respect to which such registration rights are being transferred, and (b) such transferee agrees in writing to be bound by and subject to the terms and
conditions of this Agreement. Subject to the foregoing, the provisions of this Agreement shall inure to the benefit of and are binding upon the respective successors and permitted assignees of the Parties. 

7.5. Waiver and Amendment. Except with respect to statutory requirements, and subject to the provisions of the last sentence of
this Section, any party hereto may by written instrument extend the time for the performance of any of the obligations or other acts of any other party hereto and may waive (i) any inaccuracies in the representations or warranties of any of the
other parties contained in this Agreement or in any document delivered pursuant hereto, (ii) compliance with any of the covenants, undertakings or agreements by any of the other parties, or satisfaction of any of the conditions to the waiving
party’s obligations, contained in this Agreement or (iii) the performance (including performance to the satisfaction of a party or its counsel) by any of the other parties of any of the obligations of such other party set forth herein. No
failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise
thereof or the exercise of any other right, power or remedy of such party. Except as otherwise expressly provided in this Agreement, an amendment of this Agreement or the waiver or modification of any provision of this Agreement will be effective
only upon the written consent of (i) the Company, on the one hand, and (ii) Investors, on the other hand, who hold more than fifty percent (50%) of the then outstanding Registrable Securities, on an as-converted basis;
provided, however, that if a proposed amendment, waiver or modification would adversely affect an Investor differently or in a manner that would have a disproportionate adverse effect on such Investor as compared to the effect on the
other Investors, then such amendment, waiver or modification must also be approved by such Investor. 
 7.6. Headings.
The headings of the various sections and subsections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of or be considered in connection with the interpretation or application of any of the
terms or provisions of this Agreement. 
 7.7. Severability. In case any provision contained in this Agreement should be
held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect in any jurisdiction, then, such provision shall be ineffective to the extent of such invalidity, illegality or unenforceability, in such jurisdiction
and the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 
 7.8. Counterparts. This Agreement may be executed in two or more counterparts, and by the different parties hereto in separate counterparts, each of which executed counterparts, and any photocopies
and facsimile copies thereof, shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. 
 7.9. Further Assurances. Each Party hereto agrees to execute and deliver all such other and additional instruments and documents and do all such other acts and things as may be necessary to more
fully effectuate the purposes of this Agreement. 
 [Signature Page Follows] 

  
 10 

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

			
	PACIFIC MERCANTILE BANCORP
		
	By:	 	 /s/ RAYMOND E. DELLERBA

	Name:	 	Raymond E. Dellerba
	Title:	 	President and CEO
	
	CARPENTER COMMUNITY BANCFUND, L.P. and
	CARPENTER COMMUNITY BANCFUND-A, L.P.
	
	By: CARPENTER FUND MANAGER GP, LLC,their General Partner
		
	By:	 	 /s/ JOHN FLEMMING

	Name:	 	John Flemming
	Title:  Managing Member

  
 11 

 EXHIBIT A 

 

									
	 Investors
	  	Number of
Common Shares
Purchased	 	 	Number of
Warrant Shares	 
	 Carpenter Community Bancfund, L.P.
	  	 	142,843	(1) 	 	 	13,900	  
	 Carpenter Community Bancfund—A, L.P.
	  	 	4,058,434	(1) 	 	 	394,934	  
		  	  
	  
	 	 	  
	  
	 
	 Totals
	  	 	4,201,277	(1) 	 	 	408,834	  
		  	  
	  
	 	 	  
	  
	 

  

	(1) 	 Assumes that the Purchase Price of the Common Shares will be $6.26 per share. The Purchase Price may increase above $6.26 per share, if and to the
extent the Company’s Book Value per share has increased above $6.26 on or before the consummation of the sale of the Common Shares pursuant to the Amended and Restated Common Stock Purchase Agreement. In that event, the numbers of Common Shares
set forth in this column will be reduced accordingly. There will be no reduction, however, in the numbers of Warrant Shares that will be purchasable on exercise of the Warrants. 

 

					
	Addresses of Investors	  	
			
		  	With a copy to:	  	
	 Carpenter Funds
	  	 Robert Sjogren, Esq.
	  	
	 5 Park Plaza, Suite 950
	  	 Carpenter Funds
	  	
	 Irvine CA, 92614
	  	 5 Park Plaza, Suite 950
	  	
	 Attention: John Flemming
	  	 Irvine, CA 92614
	  	
		  		  	
		  		  	
		  		  	
		  		  	
		  		  	

  
 A-1

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