<PAGE>

                                                                    Exhibit 10.9




                              GUARANTEE AGREEMENT


                               BUSINESS BANCORP


                          Dated as of March 23, 2000
<PAGE>

                               Table of Contents

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                                                                            Page
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                                   ARTICLE I
                        DEFINITIONS AND INTERPRETATION

SECTION 1.1  Definitions and Interpretation...............................    1

                                  ARTICLE II
                         POWERS, DUTIES AND RIGHTS OF
                               GUARANTEE TRUSTEE

SECTION 2.1  Powers and Duties of the Guarantee Trustee...................    4
SECTION 2.2  Certain Rights of Guarantee Trustee..........................    5
SECTION 2.3  Not Responsible for Recitals or Issuance of Guarantee........    7
SECTION 2.4  Events of Default; Waiver....................................    7
SECTION 2.5  Events of Default; Notice....................................    8

                                  ARTICLE III
                               GUARANTEE TRUSTEE

SECTION 3.1  Guarantee Trustee; Eligibility...............................    8
SECTION 3.2  Appointment, Removal and Resignation of Guarantee Trustee....    9

                                  ARTICLE IV
                                   GUARANTEE

SECTION 4.1  Guarantee....................................................    9
SECTION 4.2  Waiver of Notice and Demand..................................   10
SECTION 4.3  Obligations Not Affected.....................................   10
SECTION 4.4  Rights of Holders............................................   11
SECTION 4.5  Guarantee of Payment.........................................   11
SECTION 4.6  Subrogation..................................................   11
SECTION 4.7  Independent Obligations......................................   12
SECTION 4.8  Enforcement by a Beneficiary.................................   12

                                   ARTICLE V
                   LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 5.1  Limitation of Transactions...................................   12
SECTION 5.2  Ranking......................................................   13

                                  ARTICLE VI
                                  TERMINATION

SECTION 6.1  Termination..................................................   13

                                  ARTICLE VII
                                INDEMNIFICATION

SECTION 7.1  Exculpation..................................................   13
SECTION 7.2  Indemnification..............................................   14
SECTION 7.3  Compensation; Reimbursement of Expenses......................   15
</TABLE>

                                       i
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                                 ARTICLE VIII
                                 MISCELLANEOUS

SECTION 8.1  Successors and Assigns.......................................   15
SECTION 8.2  Amendments...................................................   16
SECTION 8.3  Notices......................................................   16
SECTION 8.4  Benefit......................................................   16
SECTION 8.5  Governing Law................................................   17
</TABLE>

                                      ii
<PAGE>

                              GUARANTEE AGREEMENT
                              -------------------

                  This GUARANTEE AGREEMENT (the "Guarantee"), dated as of March
23, 2000, is executed and delivered by Business Bancorp, a bank holding company
incorporated in California (the "Guarantor"), and The Bank of New York, as
trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Capital Securities (as defined herein) of
Business Capital Trust I, a Delaware statutory business trust (the "Issuer").

                  WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of March 23, 2000, among the trustees named
therein of the Issuer, Business Bancorp, as sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof securities, having an aggregate liquidation
amount of up to $10,000,000, designated the Fixed Rate Capital Trust
Pass-through Securities(R) (the "Capital Securities");

                  WHEREAS, as incentive for the Holders to purchase the Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Guarantee, to pay to the Holders of Capital
Securities the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein; and

                  NOW, THEREFORE, in consideration of the purchase by each
Holder of the Capital Securities, which purchase the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee
for the benefit of the Holders.

                                   ARTICLE I
                        DEFINITIONS AND INTERPRETATION

SECTION 1.1  Definitions and Interpretation
             ------------------------------

                  In this Guarantee, unless the context otherwise requires:

                  (a)  capitalized terms used in this Guarantee but not defined
         in the preamble above have the respective meanings assigned to them in
         this Section 1.1;

                  (b)  a term defined anywhere in this Guarantee has the same
         meaning throughout;

                  (c)  all references to "the Guarantee" or "this Guarantee" are
         to this Guarantee as modified, supplemented or amended from time to
         time;

                  (d)  all references in this Guarantee to Articles and Sections
         are to Articles and Sections of this Guarantee, unless otherwise
         specified;

                  (e)  terms defined in the Declaration as at the date of
         execution of this Guarantee have the same meanings when used in this
         Guarantee, unless otherwise defined in this Guarantee or unless the
         context otherwise requires; and

                  (f)  a reference to the singular includes the plural and vice
         versa.
<PAGE>

                  "Beneficiaries" means any Person to whom the Trust is or
hereafter becomes indebted or liable.

                  "Corporate Trust Office" means the office of the Guarantee
Trustee at which the corporate trust business of the Guarantee Trustee shall, at
any particular time, be principally administered, which office at the date of
execution of this Guarantee Agreement is located at 101 Barclay Street, Floor
21W, New York, NY 10286.

                  "Covered Person" means any Holder of Capital Securities.

                  "Debentures" means the junior subordinated debentures of
Business Bancorp, designated the 107/8% Junior Subordinated Deferrable Interest
Debentures due 2030, held by the Institutional Trustee (as defined in the
Declaration) of the Issuer.

                  "Declaration Event of Default" means an "Event of Default" as
defined in the Declaration.

                  "Event of Default" has the meaning set forth in Section 2.4.

                  "Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) which are required to be paid on
such Capital Securities to the extent the Issuer shall have funds available
therefor, (ii) the Redemption Price (as defined in the Indenture) to the extent
the Issuer has funds available therefor, with respect to any Capital Securities
called for redemption by the Issuer, (iii) the Special Redemption Price (as
defined in the Indenture) to the extent the Issuer has funds available therefor,
with respect to Capital Securities redeemed upon the occurrence of a Special
Event (as defined in the Indenture), and (iv) upon a voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to the Holders of the Capital
Securities in exchange therefor as provided in the Declaration), the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Capital Securities to the date of payment, to the extent
the Issuer shall have funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").

                  "Guarantee Trustee" means The Bank of New York, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee and thereafter means each such Successor
Guarantee Trustee.

                  "Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Capital Securities; provided, however, that, in
                                                  --------  -------
determining whether the holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.

                  "Indemnified Person" means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Guarantee Trustee.

                                       2
<PAGE>

                  "Indenture" means the Indenture dated as of March 23, 2000,
between the Guarantor and The Bank of New York, not in its individual capacity
but solely as trustee, and any indenture supplemental thereto pursuant to which
the Debentures are to be issued to the Institutional Trustee of the Issuer.

                  "Liquidation Distribution" has the meaning set forth in the
definition of "Guarantee Payments" herein.

                  "Majority in liquidation amount of the Capital Securities"
means Holder(s) of outstanding Capital Securities, voting together as a class,
but separately from the holders of Common Securities, of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Capital
Securities then outstanding.

                  "Obligations" means any costs, expenses or liabilities (but
not including liabilities related to taxes) of the Trust, other than obligations
of the Trust to pay to holders of any Trust Securities the amounts due such
holders pursuant to the terms of the Trust Securities.

                  "Officer's Certificate" means, with respect to any Person, a
certificate signed by one Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee shall include:

                  (a)  a statement that each officer signing the Officer's
         Certificate has read the covenant or condition and the definitions
         relating thereto;

                  (b)  a brief statement of the nature and scope of the
         examination or investigation undertaken by each officer in rendering
         the Officer's Certificate;

                  (c)  a statement that each such officer has made such
         examination or investigation as, in such officer's opinion, is
         necessary to enable such officer to express an informed opinion as to
         whether or not such covenant or condition has been complied with; and

                  (d)  a statement as to whether, in the opinion of each such
         officer, such condition or covenant has been complied with.

                  "Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.

                  "Redemption Price" has the meaning set forth in the definition
of "Guarantee Payments" herein.

                  "Responsible Officer" means, with respect to the Guarantee
Trustee, any officer within the Corporate Trust Office of the Guarantee Trustee,
including any Vice President, Assistant Vice President, Secretary, Assistant
Secretary or any other officer of the Guarantee Trustee customarily performing
functions similar to those performed by any of the above

                                       3
<PAGE>

designated officers and also, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.

                  "Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
3.1.

                  "Trust Securities" means the Common Securities and the Capital
Securities.

                                  ARTICLE II
                         POWERS, DUTIES AND RIGHTS OF
                               GUARANTEE TRUSTEE

SECTION 2.1  Powers and Duties of the Guarantee Trustee
             ------------------------------------------

                  (a) This Guarantee shall be held by the Guarantee Trustee for
         the benefit of the Holders of the Capital Securities, and the Guarantee
         Trustee shall not transfer this Guarantee to any Person except a Holder
         of Capital Securities exercising his or her rights pursuant to Section
         4.4(b) or to a Successor Guarantee Trustee on acceptance by such
         Successor Guarantee Trustee of its appointment to act as Successor
         Guarantee Trustee. The right, title and interest of the Guarantee
         Trustee shall automatically vest in any Successor Guarantee Trustee,
         and such vesting and cessation of title shall be effective whether or
         not conveyancing documents have been executed and delivered pursuant to
         the appointment of such Successor Guarantee Trustee.

                  (b) If an Event of Default actually known to a Responsible
         Officer of the Guarantee Trustee has occurred and is continuing, the
         Guarantee Trustee shall enforce this Guarantee for the benefit of the
         Holders of the Capital Securities.

                  (c) The Guarantee Trustee, before the occurrence of any Event
         of Default and after curing all Events of Default that may have
         occurred, shall undertake to perform only such duties as are
         specifically set forth in this Guarantee, and no implied covenants
         shall be read into this Guarantee against the Guarantee Trustee. In
         case an Event of Default has occurred (that has not been cured or
         waived pursuant to Section 2.4) and is actually known to a Responsible
         Officer of the Guarantee Trustee, the Guarantee Trustee shall exercise
         such of the rights and powers vested in it by this Guarantee, and use
         the same degree of care and skill in its exercise thereof, as a prudent
         person would exercise or use under the circumstances in the conduct of
         his or her own affairs.

                  (d) No provision of this Guarantee shall be construed to
         relieve the Guarantee Trustee from liability for its own negligent
         action, its own negligent failure to act, or its own willful
         misconduct, except that:

                           (i) prior to the occurrence of any Event of Default
                  and after the curing or waiving of all such Events of Default
                  that may have occurred:

                                    (A) the duties and obligations of the
                           Guarantee Trustee shall be determined solely by the
                           express provisions of this Guarantee, and the

                                       4
<PAGE>

                           Guarantee Trustee shall not be liable except for the
                           performance of such duties and obligations as are
                           specifically set forth in this Guarantee, and no
                           implied covenants or obligations shall be read into
                           this Guarantee against the Guarantee Trustee; and

                                    (B) in the absence of bad faith on the part
                           of the Guarantee Trustee, the Guarantee Trustee may
                           conclusively rely, as to the truth of the statements
                           and the correctness of the opinions expressed
                           therein, upon any certificates or opinions furnished
                           to the Guarantee Trustee and conforming to the
                           requirements of this Guarantee; but in the case of
                           any such certificates or opinions furnished to the
                           Guarantee Trustee, the Guarantee Trustee shall be
                           under a duty to examine the same to determine whether
                           or not they conform to the requirements of this
                           Guarantee;

                           (ii)  the Guarantee Trustee shall not be liable for
                  any error of judgment made in good faith by a Responsible
                  Officer of the Guarantee Trustee, unless it shall be proved
                  that such Responsible Officer of the Guarantee Trustee or the
                  Guarantee Trustee was negligent in ascertaining the pertinent
                  facts upon which such judgment was made;

                           (iii) the Guarantee Trustee shall not be liable with
                  respect to any action taken or omitted to be taken by it in
                  good faith in accordance with the direction of the Holders of
                  not less than a Majority in liquidation amount of the Capital
                  Securities relating to the time, method and place of
                  conducting any proceeding for any remedy available to the
                  Guarantee Trustee, or exercising any trust or power conferred
                  upon the Guarantee Trustee under this Guarantee; and

                           (iv)  no provision of this Guarantee shall require
                  the Guarantee Trustee to expend or risk its own funds or
                  otherwise incur personal financial liability in the
                  performance of any of its duties or in the exercise of any of
                  its rights or powers, if the Guarantee Trustee shall have
                  reasonable grounds for believing that the repayment of such
                  funds is not reasonably assured to it under the terms of this
                  Guarantee, or security and indemnity, reasonably satisfactory
                  to the Guarantee Trustee, against such risk or liability is
                  not reasonably assured to it.

SECTION 2.2  Certain Rights of Guarantee Trustee
             -----------------------------------

                  (a)  Subject to the provisions of Section 2.1:

                           (i)  The Guarantee Trustee may conclusively rely, and
                  shall be fully protected in acting or refraining from acting
                  upon, any resolution, certificate, statement, instrument,
                  opinion, report, notice, request, direction, consent, order,
                  bond, debenture, note, other evidence of indebtedness or other
                  paper or document believed by it to be genuine and to have
                  been signed, sent or presented by the proper party or parties.

                           (ii) Any direction or act of the Guarantor
                  contemplated by this Guarantee shall be sufficiently evidenced
                  by an Officer's Certificate.

                                       5
<PAGE>

                           (iii)  Whenever, in the administration of this
                  Guarantee, the Guarantee Trustee shall deem it desirable that
                  a matter be proved or established before taking, suffering or
                  omitting any action hereunder, the Guarantee Trustee (unless
                  other evidence is herein specifically prescribed) may, in the
                  absence of bad faith on its part, request and conclusively
                  rely upon an Officer's Certificate of the Guarantor which,
                  upon receipt of such request, shall be promptly delivered by
                  the Guarantor.

                           (iv)   The Guarantee Trustee shall have no duty to
                  see to any recording, filing or registration of any instrument
                  (or any rerecording, refiling or registration thereof).

                           (v)    The Guarantee Trustee may consult with counsel
                  of its selection, and the advice or opinion of such counsel
                  with respect to legal matters shall be full and complete
                  authorization and protection in respect of any action taken,
                  suffered or omitted by it hereunder in good faith and in
                  accordance with such advice or opinion. Such counsel may be
                  counsel to the Guarantor or any of its Affiliates and may
                  include any of its employees. The Guarantee Trustee shall have
                  the right at any time to seek instructions concerning the
                  administration of this Guarantee from any court of competent
                  jurisdiction.

                           (vi)   The Guarantee Trustee shall be under no
                  obligation to exercise any of the rights or powers vested in
                  it by this Guarantee at the request or direction of any
                  Holder, unless such Holder shall have provided to the
                  Guarantee Trustee such security and indemnity, reasonably
                  satisfactory to the Guarantee Trustee, against the costs,
                  expenses (including attorneys' fees and expenses and the
                  expenses of the Guarantee Trustee's agents, nominees or
                  custodians) and liabilities that might be incurred by it in
                  complying with such request or direction, including such
                  reasonable advances as may be requested by the Guarantee
                  Trustee; provided, however, that nothing contained in this
                           --------  -------
                  Section 2.2(a)(vi) shall be taken to relieve the Guarantee
                  Trustee, upon the occurrence of an Event of Default, of its
                  obligation to exercise the rights and powers vested in it by
                  this Guarantee.

                           (vii)  The Guarantee Trustee shall not be bound to
                  make any investigation into the facts or matters stated in any
                  resolution, certificate, statement, instrument, opinion,
                  report, notice, request, direction, consent, order, bond,
                  debenture, note, other evidence of indebtedness or other paper
                  or document, but the Guarantee Trustee, in its discretion, may
                  make such further inquiry or investigation into such facts or
                  matters as it may see fit.

                           (viii) The Guarantee Trustee may execute any of the
                  trusts or powers hereunder or perform any duties hereunder
                  either directly or by or through agents, nominees, custodians
                  or attorneys, and the Guarantee Trustee shall not be
                  responsible for any misconduct or negligence on the part of
                  any agent or attorney appointed with due care by it hereunder.

                                       6
<PAGE>

                           (ix) Any action taken by the Guarantee Trustee or its
                  agents hereunder shall bind the Holders of the Capital
                  Securities, and the signature of the Guarantee Trustee or its
                  agents alone shall be sufficient and effective to perform any
                  such action. No third party shall be required to inquire as to
                  the authority of the Guarantee Trustee to so act or as to its
                  compliance with any of the terms and provisions of this
                  Guarantee, both of which shall be conclusively evidenced by
                  the Guarantee Trustee's or its agent's taking such action.

                           (x)  Whenever in the administration of this Guarantee
                  the Guarantee Trustee shall deem it desirable to receive
                  instructions with respect to enforcing any remedy or right or
                  taking any other action hereunder, the Guarantee Trustee (A)
                  may request instructions from the Holders of a Majority in
                  liquidation amount of the Capital Securities, (B) may refrain
                  from enforcing such remedy or right or taking such other
                  action until such instructions are received, and (C) shall be
                  protected in conclusively relying on or acting in accordance
                  with such instructions.

                           (xi) The Guarantee Trustee shall not be liable for
                  any action taken, suffered, or omitted to be taken by it in
                  good faith and reasonably believed by it to be authorized or
                  within the discretion or rights or powers conferred upon it by
                  this Guarantee.

                  (b) No provision of this Guarantee shall be deemed to impose
         any duty or obligation on the Guarantee Trustee to perform any act or
         acts or exercise any right, power, duty or obligation conferred or
         imposed on it, in any jurisdiction in which it shall be illegal or in
         which the Guarantee Trustee shall be unqualified or incompetent in
         accordance with applicable law to perform any such act or acts or to
         exercise any such right, power, duty or obligation. No permissive power
         or authority available to the Guarantee Trustee shall be construed to
         be a duty.

SECTION 2.3  Not Responsible for Recitals or Issuance of Guarantee
             -----------------------------------------------------

                  The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee.

SECTION 2.4  Events of Default; Waiver
             -------------------------

                  (a) An Event of Default under this Guarantee will occur upon
the failure of the Guarantor to perform any of its payment or other obligations
hereunder.

                  (b) The Holders of a Majority in liquidation amount of Capital
Securities may, voting or consenting as a class, on behalf of the Holders of all
of the Capital Securities, waive any past Event of Default and its consequences.
Upon such waiver, any such Event of Default shall cease to exist, and shall be
deemed to have been cured, for every purpose of this Guarantee, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.

                                       7
<PAGE>

SECTION 2.5  Events of Default; Notice
             -------------------------

                  (a) The Guarantee Trustee shall, within 90 days after the
         occurrence of an Event of Default, transmit by mail, first class
         postage prepaid, to the Holders of the Capital Securities, notices of
         all Events of Default actually known to a Responsible Officer of the
         Guarantee Trustee, unless such defaults have been cured before the
         giving of such notice, provided, however, that the Guarantee Trustee
                                --------  -------
         shall be protected in withholding such notice if and so long as a
         Responsible Officer of the Guarantee Trustee in good faith determines
         that the withholding of such notice is in the interests of the Holders
         of the Capital Securities.

                  (b) The Guarantee Trustee shall not be deemed to have
         knowledge of any Event of Default unless the Guarantee Trustee shall
         have received written notice from the Guarantor or a Holder of the
         Capital Securities (except in the case of a payment default), or a
         Responsible Officer of the Guarantee Trustee charged with the
         administration of this Guarantee shall have obtained actual knowledge,
         thereof.

                                  ARTICLE III
                               GUARANTEE TRUSTEE

SECTION 3.1  Guarantee Trustee; Eligibility
             ------------------------------

                  (a)  There shall at all times be a Guarantee Trustee which
         shall:

                           (i)  not be an Affiliate of the Guarantor; and

                           (ii) be a corporation organized and doing business
                  under the laws of the United States of America or any State or
                  Territory thereof or of the District of Columbia, or Person
                  authorized under such laws to exercise corporate trust powers,
                  having a combined capital and surplus of at least 50 million
                  U.S. dollars ($50,000,000), and subject to supervision or
                  examination by Federal, State, Territorial or District of
                  Columbia authority. If such corporation publishes reports of
                  condition at least annually, pursuant to law or to the
                  requirements of the supervising or examining authority
                  referred to above, then, for the purposes of this Section
                  3.1(a) (ii), the combined capital and surplus of such
                  corporation shall be deemed to be its combined capital and
                  surplus as set forth in its most recent report of condition so
                  published.

                  (b) If at any time the Guarantee Trustee shall cease to be
         eligible to so act under Section 3.1(a), the Guarantee Trustee shall
         immediately resign in the manner and with the effect set out in Section
         3.2(c).

                  (c) If the Guarantee Trustee has or shall acquire any
         "conflicting interest" within the meaning of Section 310(b) of the
         Trust Indenture Act, the Guarantee Trustee shall either eliminate such
         interest or resign to the extent and in the manner provided by, and
         subject to this Guarantee.

                                       8
<PAGE>

SECTION 3.2  Appointment, Removal and Resignation of Guarantee Trustee
             ---------------------------------------------------------

                  (a) Subject to Section 3.2(b), the Guarantee Trustee may be
         appointed or removed without cause at any time by the Guarantor except
         during an Event of Default.

                  (b) The Guarantee Trustee shall not be removed in accordance
         with Section 3.2(a) until a Successor Guarantee Trustee has been
         appointed and has accepted such appointment by written instrument
         executed by such Successor Guarantee Trustee and delivered to the
         Guarantor.

                  (c) The Guarantee Trustee appointed to office shall hold
         office until a Successor Guarantee Trustee shall have been appointed or
         until its removal or resignation. The Guarantee Trustee may resign from
         office (without need for prior or subsequent accounting) by an
         instrument in writing executed by the Guarantee Trustee and delivered
         to the Guarantor, which resignation shall not take effect until a
         Successor Guarantee Trustee has been appointed and has accepted such
         appointment by an instrument in writing executed by such Successor
         Guarantee Trustee and delivered to the Guarantor and the resigning
         Guarantee Trustee.

                  (d) If no Successor Guarantee Trustee shall have been
         appointed and accepted appointment as provided in this Section 3.2
         within 60 days after delivery of an instrument of removal or
         resignation, the Guarantee Trustee resigning or being removed may
         petition any court of competent jurisdiction for appointment of a
         Successor Guarantee Trustee. Such court may thereupon, after
         prescribing such notice, if any, as it may deem proper, appoint a
         Successor Guarantee Trustee.

                  (e) No Guarantee Trustee shall be liable for the acts or
         omissions to act of any Successor Guarantee Trustee.

                  (f) Upon termination of this Guarantee or removal or
         resignation of the Guarantee Trustee pursuant to this Section 3.2, the
         Guarantor shall pay to the Guarantee Trustee all amounts owing to the
         Guarantee Trustee under Sections 7.2 and 7.3 accrued to the date of
         such termination, removal or resignation.

                                  ARTICLE IV
                                   GUARANTEE

SECTION 4.1  Guarantee
             ---------

                  (a) The Guarantor irrevocably and unconditionally agrees to
pay in full to the Holders the Guarantee Payments (without duplication of
amounts theretofore paid by the Issuer), as and when due, regardless of any
defense (except as defense of payment by the Issuer), right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.

                  (b) The Guarantor hereby also agrees to assume any and all
Obligations of the Trust and in the event any such Obligation is not so assumed,
subject to the terms and conditions

                                       9
<PAGE>

hereof, the Guarantor hereby irrevocably and unconditionally guarantees to each
Beneficiary the full payment, when and as due, of any and all obligations to
such Beneficiaries. This Agreement is intended to be for the benefit of, and to
be enforceable by, all such Beneficiaries, whether or not such Beneficiaries
have received notice hereof.

SECTION 4.2  Waiver of Notice and Demand
             ---------------------------

                  The Guarantor hereby waives notice of acceptance of this
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.

SECTION 4.3  Obligations Not Affected
             ------------------------

                  The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:

                  (a) the release or waiver, by operation of law or otherwise,
         of the performance or observance by the Issuer of any express or
         implied agreement, covenant, term or condition relating to the Capital
         Securities to be performed or observed by the Issuer;

                  (b) the extension of time for the payment by the Issuer of all
         or any portion of the Distributions, Redemption Price, Special
         Redemption Price, Liquidation Distribution or any other sums payable
         under the terms of the Capital Securities or the extension of time for
         the performance of any other obligation under, arising out of, or in
         connection with, the Capital Securities (other than an extension of
         time for payment of Distributions, Redemption Price, Special Redemption
         Price, Liquidation Distribution or other sum payable that results from
         the extension of any interest payment period on the Debentures or any
         extension of the maturity date of the Debentures permitted by the
         Indenture);

                  (c) any failure, omission, delay or lack of diligence on the
         part of the Holders to enforce, assert or exercise any right,
         privilege, power or remedy conferred on the Holders pursuant to the
         terms of the Capital Securities, or any action on the part of the
         Issuer granting indulgence or extension of any kind;

                  (d) the voluntary or involuntary liquidation, dissolution,
         sale of any collateral, receivership, insolvency, bankruptcy,
         assignment for the benefit of creditors, reorganization, arrangement,
         composition or readjustment of debt of, or other similar proceedings
         affecting, the Issuer or any of the assets of the Issuer;

                  (e) any invalidity of, or defect or deficiency in, the Capital
         Securities;

                  (f) the settlement or compromise of any obligation guaranteed
         hereby or hereby incurred; or

                                      10
<PAGE>

                  (g) any other circumstance whatsoever that might otherwise
         constitute a legal or equitable discharge or defense of a guarantor, it
         being the intent of this Section 4.3 that the obligations of the
         Guarantor hereunder shall be absolute and unconditional under any and
         all circumstances.

                  There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.

SECTION 4.4  Rights of Holders
             -----------------

                  (a) The Holders of a Majority in liquidation amount of the
         Capital Securities have the right to direct the time, method and place
         of conducting any proceeding for any remedy available to the Guarantee
         Trustee in respect of this Guarantee or to direct the exercise of any
         trust or power conferred upon the Guarantee Trustee under this
         Guarantee; provided, however, that (subject to Section 2.1) the
         Guarantee Trustee shall have the right to decline to follow any such
         direction if the Guarantee Trustee shall determine that the actions so
         directed would be unjustly prejudicial to the Holders not taking part
         in such direction or if the Guarantee Trustee being advised by counsel
         determines that the action or proceeding so directed may not lawfully
         be taken or if the Guarantor Trustee in good faith by its board of
         directors or trustees, executive committees or a trust committee of
         directors or trustees and/or Responsible Officers shall determine that
         the action or proceedings so directed would involve the Guarantee
         Trustee in personal liability.

                  (b) Any Holder of Capital Securities may institute a legal
         proceeding directly against the Guarantor to enforce the Guarantee
         Trustee's rights under this Guarantee, without first instituting a
         legal proceeding against the Issuer, the Guarantee Trustee or any other
         Person. The Guarantor waives any right or remedy to require that any
         such action be brought first against the Issuer, the Guarantee Trustee
         or any other Person before so proceeding directly against the
         Guarantor.

SECTION 4.5  Guarantee of Payment
             --------------------

                  This Guarantee creates a guarantee of payment and not of
collection.

SECTION 4.6  Subrogation
             -----------

                  The Guarantor shall be subrogated to all (if any) rights of
the Holders of Capital Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Guarantee; provided, however,
                                                            --------  -------
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any right that it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee, if, after
giving effect to any such payment, any amounts are due and unpaid under this
Guarantee. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.

                                      11
<PAGE>

SECTION 4.7  Independent Obligations
             -----------------------

                  The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 4.3 hereof.

SECTION 4.8  Enforcement by a Beneficiary
             ----------------------------

                  A Beneficiary may enforce the obligations of the Guarantor
contained in Section 4.1(b) directly against the Guarantor and the Guarantor
waives any right or remedy to require that any action be brought against the
Trust or any other person or entity before preceding against the Guarantor. The
Guarantor shall be subrogated to all rights (if any) of any Beneficiary against
the Trust in respect of any amounts paid to the Beneficiaries by the Guarantor
under this Agreement; provided, however, that the Guarantor shall not (except to
the extent required by mandatory provisions of law) be entitled to enforce or
exercise any rights that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Agreement, if, after giving effect to such payment, any amounts are due and
unpaid under this Agreement.


                                   ARTICLE V
                   LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 5.1  Limitation of Transactions
             --------------------------

                  So long as any Capital Securities remain outstanding, if (a)
there shall have occurred and be continuing an Event of Default or a Declaration
Event of Default or (b) the Guarantor shall have selected an Extension Period as
provided in the Declaration and such period, or any extension thereof, shall be
continuing, then the Guarantor may not (x) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Guarantor's capital stock or (y) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Guarantor that rank pari passu in all respects with
or junior in interest to the Debentures (other than (i) repurchases, redemptions
or other acquisitions of shares of capital stock of the Guarantor in connection
with any employment contract, benefit plan or other similar arrangement with or
for the benefit of one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of capital stock of the Guarantor (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to occurrence of the Event of Default
or Declaration Event of Default or the applicable Extension Period, (ii) as a
result of any exchange or conversion of any class or series of the Guarantor's
capital stock (or any capital stock of a subsidiary of the Guarantor) for any
class or series of the Guarantor's capital stock or of any class or series of
the Guarantor's indebtedness for any class or series of the Guarantor's capital
stock, (iii) the purchase of fractional interests in shares of the Guarantor's
capital stock pursuant to the conversion or exchange provisions of such capital
stock

                                      12
<PAGE>

or the security being converted or exchanged, (iv) any declaration of a dividend
in connection with any stockholder's rights plan, or the issuance of rights,
stock or other property under any stockholder's rights plan, or the redemption
or repurchase of rights pursuant thereto, or (v) any dividend in the form of
stock, warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu with or
junior to such stock).

SECTION 5.2  Ranking
             -------

                  This Guarantee will constitute an unsecured obligation of the
Guarantor and will rank subordinate and junior in right of payment to all
present and future Senior Indebtedness (as defined in the Indenture) of the
Guarantor. By their acceptance thereof, each Holder of Capital Securities agrees
to the foregoing provisions of this Guarantee and the other terms set forth
herein.

                  The right of the Guarantor to participate in any distribution
of assets of any of its subsidiaries upon any such subsidiary's liquidation or
reorganization or otherwise is subject to the prior claims of creditors of that
subsidiary, except to the extent the Guarantor may itself be recognized as a
creditor of that subsidiary. Accordingly, the Guarantor's obligations under this
Guarantee will be effectively subordinated to all existing and future
liabilities of the Guarantor's subsidiaries, and claimants should look only to
the assets of the Guarantor for payments thereunder. This Guarantee does not
limit the incurrence or issuance of other secured or unsecured debt of the
Guarantor, including Senior Indebtedness of the Guarantor, under any indenture
that the Guarantor may enter into in the future or otherwise.

                                  ARTICLE VI
                                  TERMINATION

SECTION 6.1  Termination
             -----------

                  This Guarantee shall terminate as to the Capital Securities
(i) upon full payment of the Redemption Price of all Capital Securities, (ii)
upon the distribution of the Debentures to the Holders of all of the Capital
Securities or (iii) upon full payment of the amounts payable in accordance with
the Declaration upon dissolution of the Issuer. This Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder of Capital Securities must restore payment of any sums paid under the
Capital Securities or under this Guarantee.

                                  ARTICLE VII
                                INDEMNIFICATION

SECTION 7.1  Exculpation
             -----------

                  (a) No Indemnified Person shall be liable, responsible or
         accountable in damages or otherwise to the Guarantor or any Covered
         Person for any loss, damage or claim incurred by reason of any act or
         omission performed or omitted by such Indemnified Person in good faith
         in accordance with this Guarantee and in a manner that such Indemnified
         Person reasonably believed to be within the scope of the authority
         conferred

                                      13
<PAGE>

         on such Indemnified Person by this Guarantee or by law, except that an
         Indemnified Person shall be liable for any such loss, damage or claim
         incurred by reason of such Indemnified Person's negligence or willful
         misconduct with respect to such acts or omissions.

                  (b) An Indemnified Person shall be fully protected in relying
         in good faith upon the records of the Issuer or the Guarantor and upon
         such information, opinions, reports or statements presented to the
         Issuer or the Guarantor by any Person as to matters the Indemnified
         Person reasonably believes are within such other Person's professional
         or expert competence and who, if selected by such Indemnified Person,
         has been selected with reasonable care by such Indemnified Person,
         including information, opinions, reports or statements as to the value
         and amount of the assets, liabilities, profits, losses, or any other
         facts pertinent to the existence and amount of assets from which
         Distributions to Holders of Capital Securities might properly be paid.

SECTION 7.2  Indemnification
             ---------------

                  (a) The Guarantor agrees to indemnify each Indemnified Person
for, and to hold each Indemnified Person harmless against, any and all loss,
liability, damage, claim or expense incurred without negligence or willful
misconduct on the part of the Indemnified Person, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of the Indemnified Person defending itself against, or investigating,
any claim or liability in connection with the exercise or performance of any of
the Indemnified Person's powers or duties hereunder. The obligation to indemnify
as set forth in this Section 7.2 shall survive the resignation or removal of the
Guarantee Trustee and the termination of this Guarantee.

                  (b) Promptly after receipt by an Indemnified Person under this
Section 7.2 of notice of the commencement of any action, such Indemnified Person
will, if a claim in respect thereof is to be made against the Guarantor under
this Section 7.2, notify the Guarantor in writing of the commencement thereof;
but the failure so to notify the Guarantor (i) will not relieve the Guarantor
from liability under paragraph (a) above unless and to the extent that the
Guarantor did not otherwise learn of such action and such failure results in the
forfeiture by the Guarantor of substantial rights and defenses and (ii) will
not, in any event, relieve the Guarantor from any obligations to any Guarantor
other than the indemnification obligation provided in paragraph (a) above. The
Guarantor shall be entitled to appoint counsel of the Guarantor's choice at the
Guarantor's expense to represent the Indemnified Person in any action for which
indemnification is sought (in which case the Guarantor shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by the
Indemnified Person or Persons except as set forth below); provided, however,
                                                          --------  -------
that such counsel shall be satisfactory to the Indemnified Person.
Notwithstanding the Guarantor's election to appoint counsel to represent the
Guarantor in an action, the Indemnified Person shall have the right to employ
separate counsel (including local counsel), and the Guarantor shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use of
counsel chosen by the Guarantor to represent the Indemnified Person would
present such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the Indemnified
Person and the Guarantor and the Indemnified Person shall have reasonably
concluded that there may be legal

                                      14
<PAGE>

defenses available to it and/or other Indemnified Person which are different
from or additional to those available to the Guarantor, (iii) the Guarantor
shall not have employed counsel satisfactory to the Indemnified Person to
represent the Indemnified Person within a reasonable time after notice of the
institution of such action or (iv) the Guarantor shall authorize the Indemnified
Person to employ separate counsel at the expense of the Guarantor. The Guarantor
will not, without the prior written consent of the Indemnified Persons, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
Indemnified Persons are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each Indemnified Person from all liability arising out of such claim, action,
suit or proceeding.

SECTION 7.3  Compensation; Reimbursement of Expenses
             ---------------------------------------

                  The Guarantor agrees:

                  (a) to pay to the Guarantee Trustee from time to time such
compensation for all services rendered by it hereunder as the parties shall
agree to from time to time (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust); and

                  (b) except as otherwise expressly provided herein, to
reimburse the Guarantee Trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by it in accordance with any
provision of this Guarantee (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or willful
misconduct.

                  The provisions of this Section 7.3 shall survive the
resignation or removal of the Guarantee Trustee and the termination of this
Guarantee.

                                 ARTICLE VIII
                                 MISCELLANEOUS

SECTION 8.1  Successors and Assigns
             ----------------------

                  All guarantees and agreements contained in this Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with any merger or
consolidation of the Guarantor with or into another entity or any sale, transfer
or lease of the Guarantor's assets to another entity, in each case, to the
extent permitted under the Indenture, the Guarantor may not assign its rights or
delegate its obligations under this Guarantee without the prior approval of the
Holders of at least a Majority in liquidation amount of the Capital Securities.

                                      15
<PAGE>

SECTION 8.2  Amendments
             ----------

                  Except with respect to any changes that do not adversely
affect the rights of Holders of the Capital Securities in any material respect
(in which case no consent of Holders will be required), this Guarantee may be
amended only with the prior approval of the Holders of not less than a Majority
in liquidation amount of the Capital Securities. The provisions of the
Declaration with respect to amendments thereof apply to the giving of such
approval.

SECTION 8.3  Notices
             -------

                  All notices provided for in this Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:

                  (a) If given to the Guarantee Trustee, at the Guarantee
         Trustee's mailing address set forth below (or such other address as the
         Guarantee Trustee may give notice of to the Holders of the Capital
         Securities):

                           The Bank of New York
                           101 Barclay Street, Floor 21W
                           New York, NY 10286
                           Attention: Corporate Trust Administration
                           Telecopy: 212-815-5915

                  (b) If given to the Guarantor, at the Guarantor's mailing
         address set forth below (or such other address as the Guarantor may
         give notice of to the Holders of the Capital Securities and to the
         Guarantee Trustee):

                           140 S. Arrowhead Avenue
                           San Bernadino, CA 92408

                           Attention: Alan J. Lane
                           Telecopy:

                  (c) If given to any Holder of the Capital Securities, at the
         address set forth on the books and records of the Issuer.

                  All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.

SECTION 8.4  Benefit
             -------

                  This Guarantee is solely for the benefit of the Holders of the
Capital Securities and, subject to Section 2.1(a), is not separately
transferable from the Capital Securities.

                                      16
<PAGE>

SECTION 8.5  Governing Law
             -------------

                  THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES THEREOF.

                                      17
<PAGE>

                  THIS GUARANTEE is executed as of the day and year first above
written.

                               BUSINESS BANCORP,
                                 as Guarantor


                           By: /s/ Alan J. Lane
                               ----------------
                               Name: Alan J. Lane
                               Title:President and CEO


                               THE BANK OF NEW YORK,
                                 as Guarantee Trustee


                               By:       /s/                      .
                                  ------------------------
                               Name:
                               Title:

                                      18