Exhibit 10.17(a)

TERM LOAN AND SECURITY AGREEMENT

         This Term Loan and Security Agreement (the “Agreement”) is made and
entered into as of July 31, 2002 by and between GREATER BAY BANCORP (the
“Borrower”) and U.S. BANK NATIONAL ASSOCIATION (the “Bank”).

ARTICLE I. DEFINITIONS

         1.1         Definitions. Except as otherwise provided, all accounting
terms will be construed in accordance with generally accepted accounting
principles consistently applied and consistent with those applied in the
preparation of the financial statements referred to in Section 4.1(g), and
financial data submitted pursuant to this Agreement will be prepared in
accordance with such principles. As used herein:

                  “Applicable Margin” means (a) in the case of Prime Rate Loans,
0.00% per annum and (b) in the case of LIBOR Rate Loans, 1.375%; provided,
however, that the Applicable Margins for Prime Rate Loans and LIBOR Rate Loans
are subject to adjustment on the first business day of each February, May,
August, and November, commencing November 1, 2002, in accordance with the
following matrix based on the Borrower’s senior unsecured debt ratings as
reported by Standard & Poor’s Rating Group and Moody’s Investor Services, Inc.
(whichever is lower) as of the last day of the immediately preceding calendar
quarter:

Debt Rating   Prime Rate Loan
Applicable Margin   LIBOR Rate Loan
Applicable Margin               Greater than or equal to
BBB+ or Baa1   0.00%   1.125%               BBB or Baa2   0.00%   1.250%        
      BBB- or Baa3   0.00%   1.375%               BB+ or Ba1   0.25%   1.625%  
            Equal to or less than
BB or Ba2   0.50%   1.875%  

--------------------------------------------------------------------------------

                     “Average Assets” means the daily average sum of all assets
shown on the consolidated balance sheet of the Borrower and its consolidated
Subsidiaries, including Loan Loss Reserves of such Subsidiaries, determined in
accordance with generally accepted accounting principles applicable to banks and
bank holding companies, consistently applied, as set forth in the Borrower’s
most recent publicly reported consolidated financial statements.

                  “Collateral” is defined in Section 5.1(a).

                  “Double Leverage Ratio” means, as to the Borrower, the
relationship, expressed as numerical ratio, between:

                  (a)         the Borrower’s aggregate equity investment in the
Borrower’s Subsidiaries;

and

                  (b)         total shareholder’s equity of the Borrower;

all as determined, without duplication, in accordance with generally accepted
accounting principles, consistently applied to the Borrower, as shown on the
most recent FRY-9LP report filed by the Borrower.

                  “Event of Default” is defined in Section 6.1.

                  “Loan Loss Reserves” means the aggregate loan loss reserves of
the Borrower and its consolidated Subsidiaries as set forth in the Borrower’s
most recent publicly reported consolidated financial statements.

                  “Maturity Date” means July 31, 2007 or such earlier date on
which the Note becomes due and payable pursuant to Section 6.2.

                  “Net Income” means the amount by which

                  (a)         all revenues and income derived from operations in
the ordinary course of business (excluding extraordinary or non-recurring gains
and profits upon the disposition of investments or fixed assets)

exceeds

                  (b)         all expenses and other proper charges against
income (including payment or provision for all applicable income and other
taxes, but excluding any

2

--------------------------------------------------------------------------------

extraordinary or non-recurring losses and losses upon the disposition of
investments and fixed assets),

all as determined for the Borrower and its consolidated Subsidiaries, without
duplication, in accordance with generally accepted accounting principles,
applied on a consistent basis; provided that gains and losses incurred in the
disposition of investments in the ordinary course of business shall not be
deemed to be extraordinary or non-recurring.

                  “Nonperforming Assets” means the sum of (i) Nonperforming
Loans and (ii) Other Real Estate.

                  “Nonperforming Loans” means those loans classified as
“non-accrual” or “restructured” as set forth in the Borrower’s most recent
publicly reported consolidated financial statements.

                  “Note” means the term note of the Borrower in the form of
Exhibit A attached hereto.

                  “Obligations” is defined in Section 5.2.

                  “Other Real Estate” means the value of all other real estate
owned by the Borrower and its consolidated Subsidiaries as set forth in the
Borrower’s most recent publicly reported consolidated financial statements.

                  “Regulatory Authority” means any state, federal or other
authority, agency or instrumentality including, without limitation, the
Comptroller of the Currency, Federal Deposit Insurance Corporation, Federal
Reserve Board and Office of Thrift Supervision, responsible for examination and
oversight of the Borrower or any Subsidiary.

                  “Subsidiary” or “Subsidiaries” means, for purposes of this
Agreement and the other Loan Documents, the Subsidiary Bank, and any entity of
which the Borrower owns, directly or through another entity, at the date of
determination, more than 50% of the outstanding stock or interest having
ordinary voting power for the election of directors, irrespective of whether or
not at such time stock of any other class or classes might have voting power by
reason of the happening of any contingency.

                  “Subsidiary Bank” means Coast Commercial Bank.

                  “Total Loans” means the aggregate outstanding principal amount
of all loans shown as assets of the Borrower and its consolidated Subsidiaries
as set forth in the Borrower’s most recent publicly reported consolidated
financial statements.

3

--------------------------------------------------------------------------------

ARTICLE II. LOANS

         2.1         Terms for Advance(s). On or about July 31, 2002, the Bank
agrees, subject to the terms and conditions hereof, to make a term loan to the
Borrower in the amount of $30,000,000. The term loan shall be evidenced by, be
repayable and bear interest in accordance with the Note. The unpaid principal
balance of the Note shall be repayable in 12 quarterly installments of
$1,500,000 each payable on each July 31, October 31, January 31 and April 30 of
each year, commencing October 31, 2003, followed by 3 quarterly installments of
$3,000,000 each, commencing October 31, 2006, plus a final installment of the
unpaid principal balance, all accrued interest thereon payable on the Maturity
Date. The Borrower further agrees to pay interest on the unpaid principal
balance of the Note outstanding from time to time in accordance with the terms
of his Agreement.

         2.2         Advances and Paying Procedure. The Bank is authorized and
directed to credit any of the Borrower’s accounts with the Bank (or to the
account the Borrower designates in writing) for all loans made hereunder, and
the Bank is authorized to debit such account or any other account of the
Borrower with the Bank for the amount of any principal or interest due under the
Note or other amounts due hereunder on the due date with respect thereto. The
Borrower will maintain a demand deposit account at the Bank to facilitate
borrowings and repayments hereunder.

         2.3         Interest Rate.

                  (a)         Interest Rate Options. Interest on the unpaid
principal balance of the Note outstanding from time to time shall accrue at one
of the following per annum rates selected by Borrower (i) upon notice to the
Bank, the prime rate announced by the Bank from time to time, as and when such
rate changes, plus the Applicable Margin (a “Prime Rate Loan”); or (ii) upon a
minimum of two New York banking days prior notice, the 1, 2 or 3 month LIBOR
rate quoted by the Bank from Telerate Page 3750 or any successor thereto (which
shall be the LIBOR rate in effect two New York banking days prior to
commencement of the LIBOR loan advance, adjusted as necessary for any reserve
requirement and other explicit or implicit costs levied by any regulatory
agency), plus the Applicable Margin (a “LIBOR Rate Loan”); With respect to Prime
Rate Loans, accrued interest shall be payable on the last business day of each
calendar quarter commencing October 31, 2002 and continuing on the last business
day of each successive quarter thereafter and on the Maturity Date. With respect
to LIBOR Rate Loans, accrued interest shall be payable on the last day of the
loan period therefor selected by the Borrower under the terms hereof, commencing
on the first of such dates to occur after the date hereof and on the Maturity
Date. If a LIBOR Rate Loan is prepaid, whether by the Borrower, as a result of
acceleration upon default or otherwise, the Borrower agrees to pay all of the
Bank’s costs and expenses incurred as a result of such prepayment

4

--------------------------------------------------------------------------------

(including any applicable “break-funding” charges and losses suffered due to the
redeployment of the LIBOR Loan for the remainder of the 1, 2 or 3-month LIBOR
interest period then in effect with respect to such LIBOR Loan). Any prepayment
of a LIBOR Rate Loan shall be in an amount equal to the remaining entire
principal balance of such LIBOR Loan. In the event the Borrower does not timely
select another interest rate option at least 2 banking days before a LIBOR Rate
Loan expires, then upon expiration such loan shall automatically be converted
into a new LIBOR Loan of the same duration as the expired LIBOR Loan. The Bank’s
internal records of applicable interest rates shall be determinative in the
absence of manifest error. Each LIBOR rate option selected shall apply to a
minimum principal amount of $1,000,000. For determining payment dates for LIBOR
Rate Loans, the New York banking day shall be the standard convention. In the
event after the date of initial funding any governmental authority subjects Bank
to any new or additional charge, fee, withholding or tax of any kind with
respect to any loans hereunder or changes the method of taxation of such loans
or changes the reserve or deposit requirements applicable to such loans, the
Borrower shall pay to the Bank such additional amounts as will compensate the
Bank for such costs or lost income resulting therefrom as reasonably determined
by the Bank.

                  (b)         Default Rate. Notwithstanding the provisions of
Section 2.3(a) above, upon the occurrence and during the continuance of an Event
of Default, the unpaid principal balance of the Notes shall, upon notice from
the Bank to the Borrower, bear interest at an annual rate equal to the rate
otherwise in effect plus two percentage points (2.00%) (the “Default Rate”),
payable upon demand. On and after the Maturity Date, the unpaid principal
balance of the Note and all accrued interest thereon shall bear interest at the
Default Rate and shall be payable upon demand.

                  (c)         Calculation. Interest shall be calculated for the
actual number of days elapsed on the basis of a 360-day year.

         2.4         Prepayments. Except as otherwise provided in Section
2.3(a), the Note may be prepaid, without penalty or premium, only on an interest
payment date upon 5 business days’ prior notice to the Bank.

ARTICLE III. CONDITIONS TO BORROWING

         3.1         Conditions to Borrowing. The Bank will not be obligated to
make any advance hereunder unless (i) the Bank has received executed copies of
this Agreement, the Note and all other documents or agreements applicable to the
loans described herein, including but not limited to the documents specified in
Article V (collectively with this Agreement, the “Loan Documents”), in form and
content satisfactory to the Bank; (ii) the Bank has received confirmation
satisfactory to it that the Bank has received the security interest contemplated
by Section 3.2; (iii) the Bank has received certified copies

5

--------------------------------------------------------------------------------

of the Articles of Incorporation and By-Laws and a certificate of status/good
standing of the Borrower and the Subsidiary Bank; (iv) the Bank has received a
certified copy of a resolution or authorization in form and content satisfactory
to the Bank authorizing the loan and all acts contemplated by this Agreement and
all related documents, and confirmation of proper authorization of all
guaranties and other acts of third parties contemplated hereunder; (v) the Bank
has been provided with an opinion of the Borrower’s in-house counsel, in form
and content satisfactory to the Bank confirming the matters outlined in Section
4.1(a) and such other matters as the Bank requests; (vi) no default exists under
this Agreement or under any other Loan Documents, or under any other agreements
by and between the Borrower and the Bank and no condition or event will exist or
have occurred which with the passage of time, the giving of notice or both would
constitute a default under this Agreement or under any other Loan Documents or
under any other agreements by and between the Borrower and the Bank; (vii) the
Bank shall have received a closing fee in the amount of $150,000; and (viii) all
proceedings taken in connection with the transactions contemplated by this
Agreement and all instruments, authorizations and other documents applicable
thereto, will be satisfactory to the Bank and its counsel.

         3.2         Security. The loans provided for hereunder will be secured
by a first-priority pledge of 100% of the capital stock of the Subsidiary Bank
now owned or hereafter acquired by the Borrower, except directors qualifying
shares, if any.

ARTICLE IV. REPRESENTATIONS, WARRANTIES AND COVENANTS

         4.1         Representations and Warranties. Borrower makes the
following representations and warranties to the Bank as of the date on which the
loan hereunder is funded, in each case except to the extent otherwise disclosed
in the Borrower’s most recent annual report on Form 10-K as filed with the
Securities and Exchange Commission:

                  (a)         Organization and Authority. The Borrower is a
validly existing corporation in good standing under the laws of its state of
organization, and has all requisite power and authority, corporate or otherwise,
and possesses all licenses necessary, to conduct its business and own its
properties. The execution, delivery and performance of this Agreement and the
other Loan Documents (i) are within the Borrower’s power; (ii) have been duly
authorized by proper corporate action; (iii) do not require the approval of any
governmental agency; and (iv) will not violate any law, agreement or restriction
by which the Borrower is bound. This Agreement and the other Loan Documents are
the legal, valid and binding obligations of the Borrower, enforceable against
the Borrower in accordance with their terms.

                  (b)         Subsidiaries.

6

--------------------------------------------------------------------------------

                            (i)         Each of the Borrower’s Subsidiaries is
validly existing in good standing under the laws of its jurisdiction of
organization, and each Subsidiary has all requisite power and authority,
corporate or otherwise, and possesses all licenses necessary, to conduct its
business and own its properties.

                           (ii)         The Subsidiary Bank has issued and
outstanding 50 shares of common stock, having no par value, which are duly
authorized, validly issued, fully paid and non-assessable, of which the Borrower
owns 100% of the issued and outstanding shares, free and clear of any liens,
charges, encumbrances, rights of redemption, preemptive rights or rights of
first refusal of any kind or nature whatsoever, except liens in favor of the
Bank. The Subsidiary Bank also has 500,000 shares of authorized preferred stock,
of which 10,000 shares are designated as 9.0% Noncumulative Preferred Stock,
Series A, no shares of preferred stock are outstanding, and no other shares of
capital stock (common or preferred), or securities or other obligations
convertible into any of the foregoing, authorized or outstanding and has no
outstanding offers, subscriptions, warrants, rights or other agreements or
commitments obligating the Subsidiary Bank to issue or sell any of the
foregoing.

                  (c)         Litigation and Compliance with Laws. The Borrower
and the Subsidiaries have complied in all material respects with all applicable
federal and state laws and regulations: (i) that regulate or are concerned in
any way with its or their banking and trust business, including without
limitation those laws and regulations relating to the investment of funds,
lending of money, collection of interest, extension of credit, and location and
operation of banking facilities; or (ii) otherwise relate to or affect the
business or assets of Borrower or any of the Subsidiaries or the assets owned,
used or occupied by them. Except to the extent previously disclosed to Bank,
there are no claims, actions, suits, or proceedings pending, or to the best
knowledge of Borrower, threatened or contemplated against or affecting Borrower
or any of the Subsidiaries, at law or in equity, or before any Regulatory
Authority, or before any arbitrator or arbitration panel, whether by contract or
otherwise, and there is no decree, judgment or order of any kind in existence
against or restraining Borrower or any of the Subsidiaries, or any of their
officers, employees or directors, from taking any action of any kind in
connection with the business of Borrower or any of the Subsidiaries which, if
adversely determined, could reasonably be expected to have a material adverse
effect on the Borrower’s consolidated financial condition. Except to the extent
previously disclosed to the Bank, neither Borrower nor any of the Subsidiaries
has (i) received from any Regulatory Authority any criticisms, recommendations
or suggestions of a material nature, and Borrower has no reason to believe that
any such is contemplated, concerning the capital structure of any of the
Subsidiaries, loan policies or portfolio, or other banking and business
practices of any of the Subsidiaries that have not been resolved to the
satisfaction of such Regulatory Authorities or (ii) entered into any memorandum
of understanding or similar arrangement

7

--------------------------------------------------------------------------------

with any Regulatory Authority relating to any unsound or unsafe banking practice
or conduct or any violation of law respecting the operations of the Borrower or
the operations of any of the Subsidiaries.

                  (d)         F.D.I.C. Insurance. The Subsidiary Bank is insured
as to deposits by the Federal Deposit Insurance Corporation and no act has
occurred which could adversely affect the status of the Subsidiary Bank as an
insured bank.

                  (e)         Use of Proceeds; Margin Stock; Speculation.
(i) The proceeds of the loan made by the Bank hereunder will be used exclusively
by the Borrower to refinance existing indebtedness with the Bank in the amount
of $25,000,000; and (ii) for the Borrower’s general corporate and working
capital purposes. The Borrower will not use any of the loan proceeds to purchase
or carry “margin” stock (as defined in Regulation U of the Board of Governors of
the Federal Reserve System). No part of any of the proceeds will be used for
speculative investment purposes, including, without limitation, speculating or
hedging in the commodities and/or futures market.

                  (f)         Environmental Matters. Except as disclosed in a
written schedule attached to this Agreement (if no schedule is attached, there
are no exceptions), there exists no uncorrected violation by the Borrower of any
federal, state or local laws (including statutes, regulations, ordinances or
other governmental restrictions and requirements) relating to the discharge of
air pollutants, water pollutants or process waste water or otherwise relating to
the environment or Hazardous Substances as hereinafter defined, whether such
laws currently exist or are enacted in the future (collectively “Environmental
Laws”) which could reasonably be expected to have a material adverse effect on
the Borrower’s consolidated financial condition. The term “Hazardous Substances”
will mean any hazardous or toxic wastes, chemicals or other substances, the
generation, possession or existence of which is prohibited or governed by any
Environmental Laws. The Borrower is not subject to any judgment, decree, order
or citation, or a party to (or threatened with) any litigation or administrative
proceeding, which asserts that the Borrower (i) has violated any Environmental
Laws; (ii) is required to clean up, remove or take remedial or other action with
respect to any Hazardous Substances (collectively “Remedial Action”); or
(iii) is required to pay all or a portion of the cost of any Remedial Action, as
a potentially responsible party. Except as disclosed on the Borrower’s
environmental questionnaire provided to the Bank, there are not now, nor to the
Borrower’s knowledge after reasonable investigation have there ever been, any
Hazardous Substances (or tanks or other facilities for the storage of Hazardous
Substances) stored, deposited, recycled or disposed of on, under or at any real
estate owned or occupied by the Borrower during the periods that the Borrower
owned or occupied such real estate, which if present on the real estate or in
soils or ground water, could require Remedial Action. To the Borrower’s
knowledge, there are no proposed or pending changes in Environmental Laws which
would adversely affect the Borrower or

8

--------------------------------------------------------------------------------

its business, and there are no conditions that would subject the Borrower to
Remedial Action or other liability. The Borrower is in compliance in all
material respects with all applicable Environmental Laws.

                  (g)         Financial Statements. The financial statements
provided to the Bank fairly present the financial condition, results of
operations and cash flows of the Borrower as of the dates and for the periods
presented and are prepared in accordance with generally accepted accounting
principles. There has been no material adverse change in the Borrower’s
consolidated financial condition since the date of such financial statements.

         4.2         Covenants. For so long as the loan hereunder remains
outstanding, the Borrower covenants to the Bank that it will comply with the
following provisions of this Section 4.2:

                  (a)         Corporate Existence; Business Activities; Assets.
The Borrower will and will cause the Subsidiary Bank to (i) preserve its
corporate existence, rights and franchises; (ii) carry on its business
activities in substantially the manner such activities are conducted as of the
date of this Agreement or as may be otherwise permissible for a financial
holding company under applicable laws and regulations; (iii) not liquidate or
dissolve; and (iv) not sell, lease, transfer or otherwise dispose of all or
substantially all of its assets. The Borrower shall not merge or consolidate
with or into any other entity unless the Borrower is the surviving entity of
such transaction.

                  (b)         Restriction on Liens. The Borrower will not
create, incur, assume or permit to exist any mortgage, pledge, encumbrance or
other lien or levy upon or security interest in any of the Borrower’s property
now owned or hereafter acquired, except (i) taxes and assessments which are
either not delinquent or which are being contested in good faith with adequate
reserves provided; (ii) easements, restrictions and minor title irregularities
which do not, as a practical matter, have an adverse effect upon the ownership
and use of the affected property; (iii) liens in favor of the Bank; (iv) other
liens disclosed in writing to the Bank prior to the date hereof which are fully
subordinated to any security interest or other lien held by the Bank; and
(v) liens or pledges of specific investment assets of the Borrower pledged to
one or more of the Borrower’s Subsidiaries; provided that the foregoing
restriction shall not apply to the capital stock or interests of Cupertino
National Bank.

                  (c)         Restriction on Contingent Liabilities. The
Borrower will not and will not permit the Subsidiary Bank to guarantee or become
a surety or otherwise contingently liable for any obligations of others, except
pursuant to the deposit and collection of checks, the issuance or confirmation
of letters of credit by the Subsidiary Bank and similar matters in the ordinary
course of banking business and guarantees

9

--------------------------------------------------------------------------------

provided by the Borrower in connection with the issuance of trust preferred
securities consistent with the Borrower’s past practices.

                  (d)         Insurance. The Borrower will maintain and cause
each Subsidiary to maintain insurance to such extent, covering such risks and
with such insurers as is usual and customary for businesses operating similar
properties.

                  (e)         Taxes and Other Liabilities. The Borrower will pay
and discharge, and cause each Subsidiary to pay and discharge when due, all of
its taxes, assessments and other liabilities, except when the payment thereof is
being contested in good faith by appropriate procedures which will avoid
foreclosure of liens securing such items, and with adequate reserves provided
therefor.

                  (f)         Financial Statements and Reporting. The Borrower
will, and will cause each Subsidiary to (i) maintain accounting records in
accordance with generally accepted accounting principles consistently applied
throughout the accounting periods involved; (ii) provide the Bank with such
information concerning its business affairs and financial condition (including
insurance coverage) as the Bank may reasonably request; and (iii) without
request, provide the Bank with the following information:

                           (i)         As soon as available, and in any event
within 90 days after the end of each fiscal year of the Borrower, the Borrower’s
annual audited financial statements prepared by an accounting firm reasonably
acceptable to the Bank; and

                           (ii)         (A) Within 45 days of the end of each
quarter, quarterly FRY-9C and FRY-9LP reports, or any successors thereto, of the
Borrower prepared in accordance with the guidelines of the Federal Reserve
System, together with a certificate of a senior financial officer of the
Borrower setting forth calculations showing the Borrower’s compliance with the
financial covenants contained in this Agreement as of the end of such quarter
and certifying that as of the date of such certificate no default (as described
in Section 6 hereof) has occurred, nor any event or act has occurred, or
condition exists, which with the giving of notice or the passage of time would
constitute such a default; and

                                        (B) Upon request by the Bank, quarterly
call reports prepared on FFIEC forms, or any successors thereto, of the
Subsidiary Bank prepared in accordance with the guidelines of the Regulatory
Authority which regulates such Subsidiary Bank; and

                           (iii)         As soon as available, copies of all
reports or materials submitted or distributed to shareholders of the Borrower or
filed with the SEC or other

10

--------------------------------------------------------------------------------

governmental agency having regulatory authority over the Borrower or the
Subsidiary Bank or with any national securities exchange; and

                           (iv)         Promptly after the furnishing thereof,
copies of any statement or report furnished to any other holder of obligations
of the Borrower or the Subsidiary Bank pursuant to the terms of any indenture,
loan or similar agreement and not otherwise required to be furnished to the Bank
pursuant to any other clause of this Section 4.2(f); and

                           (v)         Promptly, and in any event within 10
days, after the Borrower has knowledge thereof, a statement of a senior
financial officer of the Borrower describing: (i) any event which, either of
itself or with the lapse of time or the giving of notice or both, would
constitute an Event of Default hereunder or a breach of any other material
agreement to which the Borrower or the Subsidiary Bank is a party, together with
a statement of the actions which the Borrower or the Subsidiary Bank proposes to
take with respect thereto; and (ii) any pending or threatened litigation or
administrative proceeding of the type described in Section 4.1(c) that could
reasonably be expected to have a material adverse effect on the Borrower’s
consolidated financial condition; and

                           (vi)         Notice of any memorandum of
understanding or any other agreement with any Regulatory Authority, or cease and
desist order, immediately after entered into by or issued against Borrower or
the Subsidiary Bank; and

                           (vii)         Immediately upon receipt, copies of any
correspondence, notice, complaint, order or other document from any source
asserting or alleging any circumstance or condition which requires or may
require a material financial contribution by the Borrower or Remedial Action or
other response by or on the part of the Borrower under Environmental Laws, or
which seeks material damages or civil, criminal or punitive penalties from the
Borrower for an alleged violation of Environmental Laws; and

                           (viii)         Promptly after request therefor, any
other information concerning the business affairs and financial condition of the
Borrower or the Subsidiary Bank as the Bank may reasonably request.

                  (g)         Information. The Borrower will make available for
review by the Bank, promptly upon Bank’s request, financial statements, call
reports and any other records or documents of the Borrower or the Subsidiary
Bank. The Borrower and the Subsidiary Bank will use commercially reasonably
efforts to obtain the consent of any person or Regulatory Authority which it
deems necessary or appropriate for disclosure of the information described
above.

                  (h)         Financial Covenants.

11

--------------------------------------------------------------------------------

                            (i)         The Borrower shall maintain, on a
consolidated basis for the Borrower and its consolidated Subsidiaries, as of the
end of each fiscal quarter of the Borrower:

                                         (A)         a ratio of Nonperforming
Assets to Total Loans plus Other Real Estate of not greater than 2.0%.

                                         (B)         a ratio of Loan Loss
Reserves to Non-Performing Assets of at least 100%.

                           (ii)         The Borrower shall maintain, as of the
end of any fiscal quarter of the Borrower, on a consolidated, rolling four
quarters basis for the Borrower and its consolidated Subsidiaries, a ratio of
Net Income to Average Assets of at least .85%.

                           (iii)         The Borrower shall not permit the
Borrower’s Double Leverage Ratio to exceed 135% as of the end of any fiscal
quarter of the Borrower.

                           (iv)         The Borrower shall maintain, on a
consolidated basis for the Borrower and its consolidated Subsidiaries, and shall
cause the Subsidiary Bank, when measured separately, to maintain, as of the end
of any fiscal quarter of the Borrower and the Subsidiary Bank, a Tier 1 leverage
ratio (as determined in accordance with the regulations of the various federal
Regulatory Authorities), of not less than 5.0%.

                           (v)         The Borrower shall maintain, on a
consolidated basis for the Borrower and its consolidated Subsidiaries, and shall
cause the Subsidiary Bank, when measured separately, to maintain, as of the end
of any fiscal quarter of the Borrower and the Subsidiary Bank, a Tier 1
risk-based capital ratio (as determined in accordance with the regulations of
the various federal Regulatory Authorities), of not less than 6.0%.

                           (vi)         The Borrower shall maintain, on a
consolidated basis for the Borrower and its consolidated Subsidiaries, and shall
cause the Subsidiary Bank, when measured separately, to maintain, as of the end
of any fiscal quarter of the Borrower and the Subsidiary Bank, a Total
risk-based capital ratio (as determined in accordance with the regulations of
the various federal Regulatory Authorities), of not less than 10.0%.

                           (vii)         The Borrower shall maintain at all
times minimum shareholder’s equity in the Subsidiary Bank of not less than
$40,000,000.

                  (i)         Inspection of Properties and Records; Fiscal Year.
The Borrower will permit representatives of the Bank to visit and inspect any of
the properties and

12

--------------------------------------------------------------------------------

examine any books and records of the Borrower and the Subsidiary Bank, including
without limitation the stock transfer records of the Subsidiary Bank, at any
reasonable time and as often as the Bank may reasonably desire. The Borrower
will not change its fiscal year.

                  (j)         Issuance of Stock. The Borrower will not permit
the Subsidiary Bank to issue any additional shares of common or preferred stock,
or any options, warrants or other common stock equivalents, or sell or issue
securities or obligations convertible into such (“New Stock”), whether in the
form of stock dividends or stock splits or otherwise, unless such New Stock will
be issued to the Borrower and delivered by the Borrower to the Bank, together
with any additional documents required by the Bank, as additional collateral to
secure the loan provided for hereunder.

                  (k)         Acquisitions and Investments. Except to the extent
permitted by Section 4.2(a), neither the Borrower nor the Subsidiary Bank will
acquire any other business or make any loan, advance or extension of credit to,
or investment in, any other person, corporation or other entity, including
investments acquired in exchange for stock or other securities or obligations of
any nature of the Borrower or the Subsidiary Bank, or create or participate in
the creation of any joint venture, other than:

                           (i)         investments in (A) bank repurchase
agreements; (B) savings accounts or certificates of deposit in a financial
institution of recognized standing; (C) obligations issued or fully guaranteed
by the United States; and (D) prime commercial paper maturing within 90 days of
the date of acquisition by the Borrower or the Subsidiary Bank;

                           (ii)         loans and advances made to employees and
agents in the ordinary course of business;

                           (iii)         investments in the Borrower by the
Subsidiary Bank and by the Borrower and the Subsidiary Bank in Subsidiaries;

                            (iv)         with respect to the Subsidiary Bank,
investments or loans made in the ordinary course of the banking business of the
Subsidiary Bank; and

                           (v)         in connection with acquisitions of
depository institutions and non-depository entities; provided that (A) no
default (as determined in accordance with Section 6 hereof) shall have occurred
and be continuing as the consummation of such acquisition, or would be created
thereby or exist immediately after giving effect to such acquisition; (B) the
institution or entity to be acquired shall be in a substantially similar
business to that conducted by the Borrower or one of its Subsidiaries or
otherwise permitted for a financial holding company or its subsidiaries; (C) the
total consolidated

13

--------------------------------------------------------------------------------

assets of any depository institution to be acquired shall not exceed 35% of the
total consolidated assets of the Borrower immediately prior to such acquisition;
(D) the consolidated assets of any non-depository entity to be acquired shall
not exceed 10% of the total consolidated assets of the Borrower immediately
prior to such acquisition; and (E) the investment grade rating of the Borrower’s
long-term unsecured debt, as reported by Standard & Poor’s Rating Group or
Moody’s Investor Services, Inc., on a post-acquisition basis, shall be BBB- and
Baa3 or better.

                  (l)         Transactions with Affiliates. Neither the Borrower
nor the Subsidiary Bank will enter into or be a party to any material
transaction with any affiliate except as otherwise provided herein or in the
ordinary course of business or as would not otherwise be prohibited by Section
23A or 23B of the Bank Holding Company Act of 1956, as amended.

                  (m)         Other Covenants. The Borrower agrees that any
financial or operating covenants (including default threshholds similar to those
contianed in Section 6.1 hereof)contained in any agreement, document or
instrument evidencing indebtedness of the Borrower for borrowed money entered
into after the date hereof, which are more restrictive than, or substantively
different from, the covenants (including the default threshholds contianed in
Section 6.1 hereof) contained in this Agreement, shall be deemed to be
incorporated by reference into this Agreement with the same force and effect as
if originally contained herein. The Borrower further agrees to execute and
deliver any amendment to this Agreement reasonably requested by the Bank to
specifically incorporate herein such agreement or covenant.

                  (n)         Compliance with Laws. The Borrower will comply,
and will cause the Subsidiary Bank to comply, in all material respects with all
applicable federal and state laws and regulations: (i) that regulate or are
concerned in any way with its or their banking and trust business, including
without limitation those laws and regulations relating to the investment of
funds, lending of money, collection of interest, extension of credit, and
location and operation of banking facilities; or (ii) otherwise relate to or
affect the business or assets of Borrower or the Subsidiary Bank or the assets
owned, used or occupied by them.

ARTICLE V. COLLATERAL

         5.1         Collateral.

                  (a)         Grant of Security Interest. As security for the
complete and prompt payment and performance when due of the Obligations to the
Bank, the Borrower hereby grants a security interest in and collaterally assigns
to the Bank all of the following, whether now owned or existing or hereafter
acquired (collectively, the “Collateral”): all

14

--------------------------------------------------------------------------------

of the Borrower’s right, title and interest in and to the following property: 50
shares of the common stock of the Subsidiary Bank, evidenced by stock
certificate No. 2A, together with all renewals thereof, substitutions therefor,
and all proceeds thereof (including stock splits and the like), dividends,
profits, monies and claims for more monies now or hereafter payable with respect
to said property.

                  (b)         Warranty of Title/Status of Collateral. The
Borrower represents and warrants to the Bank that the Collateral is genuine and
the Borrower has good title to the Collateral. The Collateral is not subject to
any restrictions on transfer and/or disposition by the Borrower or the Bank.

                  (c)         Ownership; Maintenance of Collateral; Restriction
on Liens and Dispositions. The Borrower represents and warrants to the Bank that
the Borrower is the sole owner of the Collateral free of all liens, claims,
other encumbrances and security interests except as permitted in writing by the
Bank. The Borrower will: (i) maintain the Collateral; (ii) keep the Collateral
free from all liens, executions, attachments, claims, encumbrances and security
interests (other than the Bank’s sole and paramount security interest and those
interests permitted in writing by the Bank); (iii) defend the Collateral against
all claims and legal proceedings by persons other than the Bank; (iv) pay and
discharge when due all taxes, levies and other charges or fees which may be
assessed against the Collateral (except for payment of taxes contested by the
Borrower in good faith by appropriate proceedings so long as no levy or lien has
been imposed upon the Collateral); (v) not sell or transfer the Collateral to
any party; and (vi) preserve the Bank’s rights and security interest in the
Collateral against all other parties. The Borrower will promptly deliver to the
Bank a copy of any notices, statements or communications received by the
Borrower regarding the Collateral.

                  (d)         Maintenance of Security Interest. The Borrower
agrees that it will take any action requested by the Bank to preserve the
Collateral and to perfect, establish the priority of, continue perfection and
enforce the Bank’s interest in the Collateral and the Bank’s rights under this
Section 5.1; and the Borrower will pay all costs and expenses related thereto.

                  (e)         Delivery of Collateral/Proceeds/Order of
Application.

                           (i)         Except as provided for below, all
proceeds of, substitutions for and distributions regarding Collateral received
by the Borrower will be held by the Borrower upon an express trust for the Bank,
will not be commingled with any other funds or property of the Borrower, and
will be turned over to the Bank in precisely the form received (but endorsed by
the Borrower, if necessary) not later than the business day following the day of
their receipt by the Borrower; and all proceeds of, substitutions for

15

--------------------------------------------------------------------------------

and distributions relating to the Collateral will be held by the Bank as
Collateral hereunder.

                           (ii)         Notwithstanding the provisions of clause
(i) above and absent the existence of an Event of Default hereunder, the
Borrower may retain all regularly scheduled and/or announced cash dividends or
distributions paid to the Borrower regarding the Collateral.

                  (f)         The Borrower will immediately deliver to the Bank
all original certificates, safekeeping receipts and all other evidence of
ownership and/or title to the Collateral (“Certificates”). Furthermore, the
Borrower agrees to direct, in writing, that all banks and entities holding or
controlling any Certificates promptly and directly transmit all such
Certificates to the Bank.

                  (g)         Possessory Agency Agreements; Collateral in
“Street Name”. Upon the request of the Bank, the Borrower will promptly obtain
from any entity holding or controlling any Collateral or Certificates such
documents as the Bank deems necessary to evidence its security interest in and
exclusive possession of such Collateral and Certificates, including, without
limitation, an exclusive possessory agency agreement satisfactory to the Bank.
If any Collateral is not registered in the Borrower’s legal name, the Borrower
will furnish the Bank with satisfactory written proof of the Borrower’s bona
fide ownership of same. Upon request of the Bank, the Borrower will have any
Collateral registered in the Borrower’s legal name at the Borrower’s expense.

                  (h)         Tax Forms. If requested by the Bank, the Borrower
will complete and deliver to the Bank IRS Form W-9 (Payer’s Request for Taxpayer
Identification Number), or any successor form thereto, for each item of
Collateral pledged by the Bank and any other informational tax filings required
by federal and state taxing authorities with regard to such Collateral.

                  (i)         Regulation U Forms. If any Collateral is “margin
stock” under Regulation U of the Federal Reserve Board, the Borrower will
deliver to the Bank a completed Form U-1 satisfactory to the Bank upon request.

                  (j)         Acceptable Collateral/Restrictions On Disposition
of Collateral. The Borrower will notify the Bank in writing if any of the
Collateral is subject to any restrictions on its sale and/or disposition by the
Borrower and/or the Bank by virtue of restrictive legends, agreements between
the Borrower or third parties and restrictions under any federal and/or state
securities law. In addition, the Borrower will promptly furnish to the Bank such
information as the Bank deems necessary to comply with federal and/or state
securities laws as to the holding and disposition of any Collateral, and to
determine the status of the Collateral under federal and/or state securities
laws (including,

16

--------------------------------------------------------------------------------

without limitation, an opinion of counsel as to the status of the Collateral
under federal and state securities laws), and to verify the ownership and nature
of restrictions on the disposition of any Collateral; all in form reasonably
satisfactory to the Bank and at the Borrower’s expense.

         5.2         Credit Balances; Setoff. As additional security for the
payment of all debts, liabilities and other obligations described in the Loan
Documents and any other obligations of the Borrower to the Bank of any nature
whatsoever, including obligations relating to any interest rate hedging or other
derivative transaction between the Bank and the Borrower (collectively the
“Obligations”), the Borrower hereby grants to the Bank a security interest in, a
lien on and an express contractual right to set off against all depository
account balances, cash and any other property of the Borrower now or hereafter
in the possession of the Bank. The Bank may, at any time upon the occurrence of
an Event of Default, set off against the Obligations whether or not the
Obligations (including future installments) are then due or have been
accelerated, all without any advance or contemporaneous notice or demand of any
kind to the Borrower, such notice and demand being expressly waived.

         5.3         Rights and Duties of Bank. In addition to all other rights
(including setoff) of the Bank under this Agreement and the other Loan
Documents, the following provisions will also apply:

                  (a)         Authority to Perform for the Borrower. To
facilitate the Bank’s ability to preserve and dispose of the Collateral, the
Borrower unconditionally appoints any officer of the Bank as the Borrower’s
attorney-in-fact (coupled with an interest and irrevocable while any Obligations
remain unpaid) to do any of the following upon the occurrence and during the
continuance of an Event of Default: to endorse the name of the Borrower on any
Collateral, financing statements or payments, and any documents needed to
perfect, protect and/or realize upon the Bank’s interest in the Collateral; and
to do all such other acts and things necessary to carry out the Borrower’s
obligations under this Agreement and the other Loan Documents. All acts taken by
the Bank pursuant to the above-described authority are hereby ratified and
approved, and the Bank will not be liable to the Borrower for any acts of
commission or omission, nor for any errors of judgment or mistakes in
undertaking such authorized actions except for Lender’s gross negligence or
willful misconduct. For good and valuable consideration, the Borrower agrees not
to assert any claims against any third-party holding Collateral for complying
with the Bank’s requests hereunder, and the Borrower waives any claims against
such third parties for actions taken at the request of the Bank.

                  (b)         Collateral Preservation. The Bank will use
reasonable care as to any Collateral in its physical possession but in
determining such standard of reasonable care, the Borrower expressly
acknowledges that the Bank has no duty to: (i) insure the

17

--------------------------------------------------------------------------------

Collateral against hazards; (ii) protect the Collateral from seizure, levy,
lien, claim or conversion by third parties, or acts of God; (iii) give to the
Borrower any notices, account statements or communications received by the Bank
regarding the Collateral; (iv) perfect or continue perfection of any security
interest in the Collateral in favor of the Borrower; (v) inform the Borrower of
any decline in the value of the Collateral or the existence of any option or
elections with respect to the Collateral; (vi) take any action to invest or
manage the Collateral; (vii) exercise, preserve or act with respect to any
exchanges, puts, calls, redemptions, conversions, maturities, offers, tenders
and other rights or requirements regarding the Collateral or the Borrower’s
interest therein; nor (viii) sue or otherwise take action to preserve the
Borrower’s or the Bank’s interest in the Collateral. Notwithstanding any failure
by the Bank to use reasonable care in preserving the Collateral, the Borrower
agrees that the Bank will not be liable to the Borrower for consequential or
special damages arising from such failure.

ARTICLE VI. DEFAULTS

         6.1         Defaults. Notwithstanding any cure periods described below,
the Borrower will immediately notify the Bank in writing when the Borrower
obtains knowledge of the occurrence of any default specified below. Regardless
of whether the Borrower has given the required notice, the occurrence of one or
more of the following will constitute an “Event of Default”:

                  (a)         Nonpayment. The Borrower fails to pay (i) any
interest due on the Note or any fees, charges, costs or expenses under the Loan
Documents by 5 days after the same becomes due; or (ii) any principal amount of
the Note when due.

                  (b)         Nonperformance. The Borrower fails to perform or
observe any agreement, term, provision, condition, or covenant (other than a
default referred to in (a), (c), (d), (e), (f) or (g) of this Section 6.1)
required to be performed or observed by the Borrower hereunder or under any
other Loan Document or other agreement with or in favor of the Bank and such
failure continues uncured for a period of 30 days.

                  (c)         Misrepresentation. Any financial information,
statement, certificate, representation or warranty given to the Bank by the
Borrower (or any of its representatives) in connection with entering into this
Agreement or the other Loan Documents and/or any borrowing thereunder, or
required to be furnished under the terms thereof, proves untrue or misleading in
any material respect (as determined by the Bank in the exercise of its judgment)
as of the time when given.

                  (d)         Default on Other Obligations. The Borrower will be
in default under the terms of any loan agreement, promissory note, lease,
conditional sale contract

18

--------------------------------------------------------------------------------

or other agreement, document or instrument evidencing, governing or securing any
indebtedness owing by the Borrower to the Bank or any indebtedness in excess of
$10,000,000 owing by the Borrower to any third party, and the period of grace,
if any, to cure said default will have passed.

                  (e)         Judgments. Any judgment is obtained against the
Borrower which, together with all other outstanding unsatisfied judgments
against the Borrower, exceeds the sum of $10,000,000 and remains unvacated,
unbonded or unstayed for a period of 30 days following the date of entry
thereof.

                  (f)         Inability to Perform; Bankruptcy/Insolvency. (i)
The Borrower ceases to exist; or (ii) any bankruptcy, insolvency or receivership
proceedings, or an assignment for the benefit of creditors, is commenced under
any Federal or state law by or against the Borrower; or (iii) the Borrower
becomes the subject of any out-of-court settlement with its creditors; or (iv)
the Borrower is unable or admits in writing its inability to pay its debts as
they mature; or (v) the Borrower or the Subsidiary Bank is closed or taken over
by a Regulatory Authority.

                  (g)         Material Adverse Change. There is a material
adverse change in the business, properties, consolidated financial condition or
affairs of the Borrower, or in any Collateral.

                  (h)         Regulatory Orders. Any Regulatory Authority takes
any formal enforcement action against the Borrower or the Subsidiary Bank.

         6.2         Termination of Loan; Additional Bank Rights. Upon the
occurrence of any Event of Default, the Bank may at any time thereafter (i)
immediately terminate its obligation, if any, to make additional loans to the
Borrower; (ii) set off; and/or (iii) take such other steps to protect or
preserve the Bank’s interest in any collateral; all without demand or notice of
any kind, all of which are hereby waived.

         6.3         Acceleration of Obligations. Upon the occurrence of any
Event of Default (other than under Section 6.1(f)), the Bank may at any time
thereafter, (i) by written notice to the Borrower, declare the unpaid principal
balance of any Obligations, together with the interest accrued thereon and other
amounts accrued hereunder and under the other Loan Documents, to be immediately
due and payable; and the unpaid balance will thereupon be due and payable, all
without presentation, demand, protest or further notice of any kind, all of
which are hereby waived, and notwithstanding anything to the contrary contained
herein or in any of the other Loan Documents; and (ii) subject to applicable
regulatory requirements, require the Borrower to cause the Subsidiary Bank to
appoint an independent transfer agent for the purpose of registering and
transferring ownership of the capital stock of Coast Commercial Bank. Upon the
occurrence of any Event of

19

--------------------------------------------------------------------------------

Default under Section 6.1(f), the unpaid principal balance of any Obligations,
together with all interest accrued thereon and other amounts accrued hereunder
and under the other Loan Documents, will thereupon be immediately due and
payable, all without presentation, demand, protest or notice of any kind, all of
which are hereby waived, and notwithstanding anything to the contrary contained
herein or in any of the other Loan Documents. Nothing contained in Section 6.1,
Section 6.2 or this section will limit the Bank’s right to set off as provided
in Section 5.2 or otherwise in this Agreement.

         6.4         Remedies as to Collateral. Upon the occurrence of an Event
of Default, the Bank may at any time thereafter, subject in each case to
applicable regulatory requirements: (i) transfer any of the Collateral into its
name or that of its nominee; (ii) in the Borrower’s name or otherwise dispose of
and/or collect any Collateral by suit or otherwise; or surrender or exchange all
or any part of the Collateral; or compromise, extend, renew or modify any
obligation evidenced by the Collateral; (iii) exercise all of the Borrower’s
rights as a holder and/or owner of the Collateral; (iv) dispose of the
Collateral as provided for herein and at law; and (v) notify any issuer or
holder of any Collateral (and/or any transfer agent of such issuer) of this
pledge of the Collateral, and direct such issuer, holder or transfer agent to
deliver directly in trust to the Bank any subsequent shares of stock, dividend
payments or other distributions pertaining to the Collateral or arising from the
Borrower’s ownership of the Collateral; and the Borrower hereby unconditionally
directs such parties to comply with the Bank’s requests in all respects.

         6.5         Cumulative Remedies; Notice; Waiver. In addition to the
remedies set forth herein, the Bank will have all other rights and remedies for
default provided by the Uniform Commercial Code, as well as any other applicable
law, INCLUDING, WITHOUT LIMITATION, THE RIGHT TO REPOSSESS, AND DISPOSE OF THE
COLLATERAL WITHOUT JUDICIAL PROCESS. The rights and remedies specified herein
are cumulative and are not exclusive of any rights or remedies which the Bank
would otherwise have. With respect to such rights and remedies:

                  (a)         Notice of Disposition. Written notice, when
required by law, sent to any address of the Borrower in this Agreement, at least
ten (10) calendar days (counting the day of sending) before the date of a
proposed disposition of the Collateral will be deemed reasonable notice;

                  (b)         Possession of Collateral; Commercial
Reasonableness. The Bank will not, at any time, be obligated to either take or
retain possession or control of the Collateral. With respect to the Collateral
in the possession or control of the Bank, the Borrower and the Bank agree that
as a standard for determining commercial reasonableness: the Bank need not
liquidate, collect, sell or otherwise dispose of any of the Collateral if the
Bank believes, in good faith, that disposition of the Collateral would

20

--------------------------------------------------------------------------------

not be commercially reasonable, would subject the Bank to third-party claims or
liability, or would cause the Bank to violate federal or state securities laws;
and the Bank may hold the Collateral for up to one year to attract other
potential purchasers or obtain a better price, and in such event, the Bank will
not then be deemed to have retained the Collateral in satisfaction of the
Obligations. Furthermore, the Bank may sell the Collateral with or without an
agent or broker; and the Bank need not register any Securities Collateral under
state or federal law;

                  (c)         Waiver by the Bank. The Bank may permit the
Borrower to attempt to remedy any default without waiving its rights and
remedies hereunder, and the Bank may waive any default beyond any applicable
cure period provided therefor without waiving any other subsequent or prior
default by the Borrower. Furthermore, delay on the part of the Bank in
exercising any right, power or privilege hereunder or at law will not operate as
a waiver thereof, nor will any single or partial exercise of such right, power
or privilege preclude other exercise thereof or the exercise of any other right,
power or privilege. No waiver or suspension will be deemed to have occurred
unless the Bank has expressly agreed in writing specifying such waiver or
suspension;

                  (d)         Marshalling. The Borrower waives any claim of
marshalling of assets against the Bank; and

                  (e)         Regulatory Limitations. The foregoing provisions
of this Section 6.5 shall not be construed to excuse the Bank from compliance
with applicable regulatory requirements in dealing with the Collateral.

         6.6         Irrevocable Proxy on Default. In addition to the Bank’s
other rights, the Borrower irrevocably appoints the Bank as proxy, with full
power of substitution and revocation, to exercise (subject to applicable
regulatory requirements), when an Event of Default shall have occurred and be
continuing, the Borrower’s rights to take any action respecting the Collateral
or with regard to any issuer or transfer agent of the Collateral thereof as
fully as the Borrower might do. This proxy remains effective so long as any of
the Obligations are unpaid.

         6.7         Other Remedies. Nothing in this Article VI is intended to
restrict the Bank’s rights under any of the Loan Documents or at law, and the
Bank may exercise all such rights and remedies as and when they are available.

ARTICLE VII. MISCELLANEOUS

         7.1         Delay; Cumulative Remedies. No delay on the part of the
Bank in exercising any right, power or privilege hereunder or under any of the
other Loan Documents will operate as a waiver thereof, nor will any single or
partial exercise of any

21

--------------------------------------------------------------------------------

right, power or privilege hereunder preclude other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and remedies
herein specified are cumulative and are not exclusive of any rights or remedies
which the Bank would otherwise have.

         7.2         Relationship to Other Documents. The warranties, covenants
and other obligations of the Borrower (and the rights and remedies of the Bank)
that are outlined in this Agreement and the other Loan Documents are intended to
supplement each other. In the event of any inconsistencies in any of the terms
in the Loan Documents, all terms will be cumulative so as to give the Bank the
most favorable rights set forth in the conflicting documents, except that if
there is a direct conflict between any preprinted terms and specifically
negotiated terms (whether included in an addendum or otherwise), the
specifically negotiated terms will control.

         7.3         Participations. The Bank may, at its option, sell all or
any interests in the Note and other Loan Documents to other financial
institutions with prior written notice to, and consent by, the Borrower, which
consent shall not be unreasonably withheld or delayed, unless an Event of
Default exists, then such notice and consent shall not be required. Any
purchaser of an interest in the Note is hereinafter referred to as a
“Participant.” In connection with such sales (and thereafter), the Bank may
disclose any financial information the Bank may have concerning the Borrower to
any such Participant or potential Participant.

         7.4         Expenses and Attorneys’ Fees. The Borrower will reimburse
the Bank for all reasonable attorneys’ fees and all other costs, fees and
out-of-pocket disbursements (including reasonable fees and disbursements of both
inside counsel and outside counsel) incurred by the Bank in connection with the
preparation, execution, delivery, administration, defense and enforcement of
this Agreement or any of the other Loan Documents, including fees and costs
related to any waivers or amendments with respect thereto; provided that the
Borrower’s reimbursement to the Bank for legal fees and disbursements incurred
in the preparation, execution and delivery of this Agreement shall not exceed
$15,000. The Borrower will also reimburse the Bank for all costs of collection
before and after judgment, and the costs of preservation and/or liquidation of
any collateral (including reasonable fees and disbursements of both inside and
outside counsel).

         7.5         Successors. The rights, options, powers and remedies
granted in this Agreement and the other Loan Documents will extend to the Bank
and to its successors and assigns, will be binding upon the Borrower and its
successors and assigns and will be applicable hereto and to all renewals and/or
extensions hereof.

22

--------------------------------------------------------------------------------

         7.6         Indemnification. Except for harm arising from the Bank’s
gross negligence or willful misconduct, the Borrower hereby indemnifies and
agrees to defend and hold the Bank harmless from any and all losses, costs,
damages, claims and expenses of any kind suffered by or asserted against the
Bank relating to claims by third parties arising out of the financing provided
under the Loan Documents or related to any collateral. This indemnification and
hold harmless provision will survive the termination of the Loan Documents and
the satisfaction of the Obligations due the Bank.

         7.7         Notice of Claims Against Bank; Limitation of Certain
Damages. In order to allow the Bank to mitigate any damages to the Borrower from
the Bank’s alleged breach of its duties under the Loan Documents or any other
duty, if any, to the Borrower, the Borrower agrees to give the Bank immediate
written notice of any claim or defense it has against the Bank, whether in tort
or contract, relating to any action or inaction by the Bank under the Loan
Documents, or the transactions related thereto, or of any defense to payment of
the Obligations for any reason. The requirement of providing timely notice to
the Bank represents the parties’ agreed-to standard of performance regarding
claims against the Bank. Notwithstanding any claim that the Borrower may have
against the Bank, and regardless of any notice the Borrower may have given the
Bank, the Bank will not be liable to the Borrower for consequential and/or
special damages arising therefrom, except those damages arising from the Bank’s
gross negligence or willful misconduct.

         7.8         Notices. Although any notice required to be given hereunder
or under any of the other Loan Documents might be accomplished by other means,
notice will always be deemed given when placed in the United States Mail, with
postage prepaid, or sent by overnight delivery service, or sent by telex or
facsimile, in each case to the address set forth below or as amended.

         7.9         Payments. Payments due under the Note and other Loan
Documents will be made in lawful money of the United States, and the Bank is
authorized to charge payments due under the Loan Documents against any account
of the Borrower. All payments may be applied by the Bank to principal, interest
and other amounts due under the Loan Documents in any order which the Bank
elects.

         7.10         Applicable Law and Jurisdiction; Interpretation; Joint
Liability. This Agreement and all other Loan Documents will be governed by and
interpreted in accordance with the internal laws of the State of Wisconsin,
except to the extent superseded by Federal law. Invalidity of any provisions of
this Agreement will not affect any other provision. THE BORROWER HEREBY CONSENTS
TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED IN THE
COUNTIES OF SAN FRANCISCO OR SANTA CLARA, CALIFORNIA, AND WAIVES ANY OBJECTION
BASED ON FORUM NON CONVENIENS, WITH

23

--------------------------------------------------------------------------------

REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS
AGREEMENT, THE NOTES, THE COLLATERAL, ANY OTHER LOAN DOCUMENT, OR ANY
TRANSACTIONS ARISING THEREFROM, OR ENFORCEMENT AND/OR INTERPRETATION OF ANY OF
THE FOREGOING. Nothing herein will affect the Bank’s rights to serve process in
any manner permitted by law, or limit the Bank’s right to bring proceedings
against Borrower in the competent courts of any other jurisdiction. This
Agreement, the other Loan Documents and any amendments hereto (regardless of
when executed) will be deemed effective and accepted only upon the Bank’s
receipt of the executed originals thereof.

         7.11         Copies; Entire Agreement; Modification. The Borrower
hereby acknowledges the receipt of a copy of this Agreement and all other Loan
Documents.

IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR
ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED.
YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
THIS NOTICE SHALL ALSO BE EFFECTIVE WITH RESPECT TO ALL OTHER CREDIT AGREEMENTS
NOW IN EFFECT BETWEEN YOU AND THIS LENDER. A MODIFICATION OF ANY OTHER CREDIT
AGREEMENTS NOW IN EFFECT BETWEEN YOU AND THIS LENDER, WHICH OCCURS AFTER RECEIPT
BY YOU OF THIS NOTICE, MAY BE MADE ONLY BY ANOTHER WRITTEN INSTRUMENT. ORAL OR
IMPLIED MODIFICATIONS TO SUCH CREDIT AGREEMENTS ARE NOT ENFORCEABLE AND SHOULD
NOT BE RELIED UPON.

         7.12         Waiver of Jury Trial. THE BORROWER AND THE BANK HEREBY
JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING RELATING TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS THEREUNDER,
ANY COLLATERAL SECURING THE OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR
CONNECTED THERETO. THE BORROWER AND THE BANK EACH REPRESENTS TO THE OTHER THAT
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.

[SIGNATURES APPEAR ON NEXT PAGE]

24

--------------------------------------------------------------------------------

         IN WITNESS WHEREOF, the undersigned have executed this TERM LOAN AND
SECURITY AGREEMENT as of July 31, 2002.

    GREATER BAY BANCORP
   
By: /s/ DAVID L. KALKBRENNER                                        Name and
Title: David L. Kalkbrenner
President and CEO

     
   
By: /s/ KAMRAN HUSAIN                                                       
Name and Title: Senior Vice President               Address:               2860
West Bayshore Road
Palo Alto, CA 94303
Attn: Chief Financial Officer
Facsimile No.: (650) 494-9220

    U.S. BANK NATIONAL ASSOCIATION
   
By: /s/ JON B. BEGGS                                                            
  Name and Title: Jon B. Beggs
Vice President               Address:               777 East Wisconsin Avenue
Milwaukee, WI 53202
Attn: Jon B. Beggs, Vice President
Facsimile No.: 414-765-6236

S-1

--------------------------------------------------------------------------------

EXHIBIT A

TERM NOTE

$30,000,000   Milwaukee, Wisconsin             July 31, 2002

                  FOR VALUE RECEIVED, on or before the Maturity Date (as defined
in the Loan Agreement hereinafter referred to), the undersigned, GREATER BAY
BANCORP, a California corporation, promises to pay to the order of U.S. BANK
NATIONAL ASSOCIATION (the “Bank”) the principal sum of Thirty Million Dollars,
or such lesser amount as is shown to be outstanding according to the records of
the Bank, which records shall be conclusive, absent manifest error, together
with interest on the principal balance outstanding from time to time, at such
rates and payable at such times as are set forth in the Loan Agreement
hereinafter referred to.

                  Payments of both principal and interest are to be made in
immediately available funds in lawful currency of the United States of America
at the office of the Bank, 777 East Wisconsin Avenue, Milwaukee, Wisconsin
53202, or such other place as the holder hereof shall designate to the
undersigned in writing.

                  This Note is the Note issued pursuant to a Term Loan Agreement
dated as of July 31, 2002 between the undersigned and the Bank (as amended from
time to time, the “Loan Agreement”). Reference is made to such Loan Agreement
for rights and obligations as to prepayment and acceleration of maturity.

                  The undersigned waives demand, presentment, protest or any
other notice of any kind with respect to this Note.

                  This Note shall be governed and construed in accordance with
the laws of the State of Wisconsin.

                  The undersigned agrees to pay all costs of collection,
including reasonable attorneys’ fees.

    GREATER BAY BANCORP    

  By: 

--------------------------------------------------------------------------------

        Name:   

--------------------------------------------------------------------------------

        Title:   

--------------------------------------------------------------------------------

         
  By: 

--------------------------------------------------------------------------------

        Name:   

--------------------------------------------------------------------------------

        Title:   

--------------------------------------------------------------------------------