Document:

<PAGE>

                                                                     Exhibit 4.6

================================================================================

                     CAPITAL SECURITIES GUARANTEE AGREEMENT

                              GREATER BAY BANCORP

                           Dated as of June __, 2001

================================================================================
<PAGE>

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<CAPTION>

                                                                                                Page
                                                                                                ----

<S>                 <C>                                                                           <C>
ARTICLE I       DEFINITIONS AND INTERPRETATION..................................................   2
     SECTION 1.1    Definitions and Interpretation..............................................   2
ARTICLE II      TRUST INDENTURE ACT.............................................................   5
     SECTION 2.1    Trust Indenture Act; Application............................................   5
     SECTION 2.2    Lists of Holders of Securities..............................................   5
     SECTION 2.3    Reports by the Capital Securities Guarantee Trustee.........................   6
     SECTION 2.4    Periodic Reports............................................................   6
     SECTION 2.5    Evidence of Compliance with Conditions Precedent............................   6
     SECTION 2.6    Waiver of Events of Default.................................................   6
     SECTION 2.7    Notice of Events of Default.................................................   7
     SECTION 2.8    Conflicting Interests.......................................................   7
     SECTION 2.9    Guarantee Trustee May File Proofs of Claim..................................   7
ARTICLE III     POWERS, DUTIES AND RIGHTS OF CAPITAL SECURITIES GUARANTEE TRUSTEE...............   7
     SECTION 3.1    Powers and Duties of the Capital Securities Guarantee Trustee...............   7
     SECTION 3.2    Certain Rights of Capital Securities Guarantee Trustee......................   9
     SECTION 3.3    Not Responsible for Recitals or Issuance of  Capital Securities Guarantee...  11
ARTICLE IV      CAPITAL SECURITIES GUARANTEE TRUSTEE............................................  11
     SECTION 4.1    Capital Securities Guarantee Trustee; Eligibility...........................  11
     SECTION 4.2    Appointment, Removal and Resignation of Capital Securities Guarantee
                     Trustee....................................................................  12
ARTICLE V       GUARANTEE.......................................................................  13
     SECTION 5.1    Guarantee...................................................................  13
     SECTION 5.2    Waiver of Notice and Demand.................................................  13
     SECTION 5.3    Obligations Not Affected....................................................  13
     SECTION 5.4    Rights of Holders...........................................................  14
     SECTION 5.5    Guarantee of Payment........................................................  14
     SECTION 5.6    Subrogation.................................................................  14
     SECTION 5.7    Independent Obligations.....................................................  15
</TABLE>

                                       i
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                         TABLE OF CONTENTS (continued)
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<TABLE>
<CAPTION>
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<S>                 <C>                                                                           <C>
ARTICLE VI      LIMITATION OF TRANSACTIONS; SUBORDINATION.......................................  15
     SECTION 6.1    Limitation of Transactions..................................................  15
     SECTION 6.2    Ranking.....................................................................  16
ARTICLE VII     TERMINATION.....................................................................  16
     SECTION 7.1    Termination.................................................................  16
ARTICLE VIII    INDEMNIFICATION.................................................................  16
     SECTION 8.1    Exculpation.................................................................  16
     SECTION 8.2    Compensation and Indemnification............................................  17
ARTICLE IX      MISCELLANEOUS...................................................................  17
     SECTION 9.1    Successors and Assigns......................................................  17
     SECTION 9.2    Amendments..................................................................  17
     SECTION 9.3    Notices.....................................................................  18
     SECTION 9.4    Benefit.....................................................................  19
     SECTION 9.5    Governing Law...............................................................  20
</TABLE>

                                       ii
<PAGE>

                             CROSS REFERENCE TABLE

Section of                                                 Section of Guarantee
Trust Indenture                                                  Agreement
Act of 1939,                                                     ---------
as amended
--------------
   310(a)  .................................................       4.1(a)
   310(b)  .................................................    2.8, 4.1(c)
   310(c)  .................................................        N/A
   311(a)  .................................................       2.2(b)
   311(b)  .................................................       2.2(b)
   311(c)  .................................................        N/A
   312(a)  .................................................       2.2(a)
   312(b)  .................................................       2.2(b)
   312(c)  .................................................        N/A
   313     .................................................        2.3
   314(a)  .................................................        2.4
   314(b)  .................................................        N/A
   314(c)  .................................................        2.5
   314(d)  .................................................        N/A
   314(e)  .................................................   1.1, 2.5, 3.2
   314(f)  .................................................      2.1, 3.2
   315(a)  .................................................   3.1(d), 3.2(a)
   315(b)  .................................................        2.7
   315(c)  .................................................       3.1(c)
   315(d)  ................................................. 3.1(d), 3.2(a), 8.1
   315(e)  .................................................        N/A
   316(a)  .................................................   1.1, 2.6, 5.4
   316(b)  .................................................      5.3, 5.4
   316(c)  .................................................        9.2
   317(a)  .................................................        N/A
   317(b)  .................................................        N/A
   318(a)  .................................................       2.1(a)
   318(b)  .................................................       2.1(b)
   318(c)  .................................................       2.1(b)
_________________________
*    This Cross-Reference Table does not constitute part of this Guarantee
     Agreement and shall not affect the interpretation of any of its terms or
     provisions.

                                      iii
<PAGE>

                     CAPITAL SECURITIES GUARANTEE AGREEMENT

     This CAPITAL SECURITIES GUARANTEE AGREEMENT (the "Capital Securities
Guarantee"), dated as of June __, 2001 is executed and delivered by GREATER BAY
BANCORP, a California corporation (the "Guarantor"), and WILMINGTON TRUST
COMPANY, a Delaware banking corporation, as trustee (the "Capital Securities
Guarantee Trustee" or "Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Capital Securities (as defined herein) of GBB
CAPITAL V, a Delaware statutory business trust (the "Issuer").

     WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of June __, 2001, by and among the trustees of the
Issuer named therein, the Guarantor, 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 _______ capital securities, having an aggregate
liquidation amount of $__________, such capital securities being designated the
____% Capital Securities (collectively 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 Capital Securities Guarantee, to pay the Guarantee Payments
(as defined herein) to the Holders of the Capital Securities, and the Guarantor
agrees to make certain other payments on the terms and conditions set forth
herein.

     WHEREAS, the Guarantor is also executing and delivering the Common
Securities Guarantee Agreement, dated as of June __, 2001 (the "Common
Securities Guarantee"), for the benefit of the holders of the Common Securities
(as defined herein), the terms of which provide that if an Event of Default (as
defined in the Declaration) has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated, to the extent and in the manner set forth
in the Common Securities Guarantee, to the rights of Holders of Capital
Securities to receive Guarantee Payments under this  Capital Securities
Guarantee.

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

                                       1
<PAGE>

                                   ARTICLE I

                         DEFINITIONS AND INTERPRETATION

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

     In this  Capital Securities Guarantee, unless the context otherwise
requires:

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

     (b)  terms defined in the Declaration as in effect at the date of execution
of this Capital Securities Guarantee have the same meaning when used in this
Capital Securities Guarantee unless otherwise defined in this Capital Securities
Guarantee;

     (c)  a term defined anywhere in this Capital Securities Guarantee has the
same meaning throughout;

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

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

     (f)  a term defined in the Trust Indenture Act has the same meaning when
used in this Capital Securities Guarantee, unless otherwise defined in this
Capital Securities Guarantee or unless the context otherwise requires; and

     (g)  a reference to the singular includes the plural and vice versa.

     "Affiliate" has the same meaning as given to that term in Rule 405 under
      ---------
the Securities Act of 1933, as amended, or any successor rule thereunder.

     "Business Day" shall mean any day other than a Saturday, a Sunday, or a day
      ------------
on which banking institutions in Wilmington, Delaware, San Francisco, California
or New York, New York  are authorized or required by law or executive order to
remain closed.

     "Capital Securities Guarantee Trustee" shall mean Wilmington Trust Company,
      ------------------------------------
as Trustee under the Capital Securities Guarantee, until a Successor Capital
Securities Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Capital Securities Guarantee and
thereafter means each such Successor Capital Securities Guarantee Trustee.

     "Common Securities" shall mean the securities representing common undivided
      -----------------
beneficial interests in the assets of the Issuer.

                                       2
<PAGE>

     "Corporate Trust Office" shall mean the office of the Capital Securities
      ----------------------
Guarantee Trustee at which the corporate trust business of the Capital
Securities Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Agreement is located
at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-
0001, Attention: Corporate Trust Administration.

     "Covered Person" shall mean any Holder or beneficial owner of Capital
      --------------
Securities.

     "Debentures" shall mean the series of subordinated debt securities of the
      ----------
Guarantor designated the ____% Junior Subordinated Deferrable Interest
Debentures due ______, 2031, held by the Property Trustee (as defined in the
Declaration) of the Issuer.

     "Event of Default" shall mean a default by the Guarantor on any of its
      ----------------
payment or other obligations under this Capital Securities Guarantee; provided,
                                                                      --------
however, that, except with respect to default in respect of any Guarantee
-------
Payment, no default by the Guarantor hereunder shall constitute an Event of
Default unless the Guarantor shall have received written notice of the default
and shall not have cured such default within 60 days after receipt thereof.

     "Guarantee Payments" shall mean the following payments or distributions,
      ------------------
without duplication, with respect to the Capital Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Capital Securities, to the extent the Issuer has funds legally available
therefor at such time, (ii) the redemption price, including all accumulated and
unpaid Distributions to the date of redemption (the "Redemption Price"), to the
extent the Issuer has funds legally available therefor at such time, with
respect to any Capital Securities called for redemption, and (iii) upon a
voluntary or involuntary dissolution, winding up or liquidation of the Issuer
(other than in connection with the distribution of Debentures to the Holders in
exchange for Capital Securities or in connection with the redemption of the
Capital Securities, in each case as provided in the Declaration), the lesser of
(a) the aggregate of the liquidation amount and all accumulated and unpaid
Distributions on the Capital Securities to the date of payment, to the extent
the Issuer has funds legally available therefor at such time, and (b) the amount
of assets of the Issuer remaining available for distribution to Holders after
satisfaction of liabilities to creditors of the Issuer as required by applicable
law (in either case, the "Liquidation Distribution").  If an Event of Default
hereunder or an Event of Default under the Declaration (as defined therein) has
occurred and is continuing, no Guarantee Payments under the Common Securities
Guarantee with respect to the Common Securities or any guarantee payment under
the Common Securities Guarantee or any Other Common Securities Guarantee shall
be made until the Holders of the Capital Securities shall be paid in full the
Guarantee Payments to which they are entitled under this Capital Securities
Guarantee.

     "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 Person actually known to a Responsible Officer of the Capital
Securities Guarantee Trustee to be an Affiliate of the Guarantor.

                                       3
<PAGE>

     "Indemnified Person" shall mean the Capital Securities Guarantee Trustee
      ------------------
(including in its individual capacity), any Affiliate of the Capital Securities
Guarantee Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Capital
Securities Guarantee Trustee.

     "Indenture" shall mean the Indenture, dated as of June __, 2001, between
      ---------
Greater Bay Bancorp, as issuer of Debentures (the "Debenture Issuer"), and
Wilmington Trust Company, as trustee, pursuant to which the Debentures are to be
issued to the Property Trustee of the Issuer.

     "Majority in Liquidation Amount of the Capital Securities" shall mean,
      --------------------------------------------------------
except as provided by the Trust Indenture Act, a vote by Holder(s) of the
Capital Securities, voting separately as a class, of more than 50% of the
aggregate liquidation amount (including the amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to but excluding the date upon which the voting percentages are determined) of
all outstanding Capital Securities, excluding Capital Securities held by the
Guarantor, the Issuer or any Affiliate thereof.

     "Officers' Certificate" shall mean, with respect to any Person, a
      ---------------------
certificate signed by the Chairman, the Chief Executive Officer, the President,
an Executive or Senior Vice President, a Vice President, the Chief Financial
Officer and the Secretary or an Assistant Secretary. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Capital Securities Guarantee shall include:

     (a)  a statement that each officer signing the Officers' Certificate has
read the covenants or conditions and the definitions relating thereto;

     (b)  a brief statement of the nature and scope of the examination or
investigation undertaken by each officer on behalf of such Person 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 or not, in the opinion of each such officer,
such condition or covenant has been complied with.

     "Other Common Securities Guarantees" shall have the same meaning as "Other
      ----------------------------------
Guarantees" in the Common Securities Guarantee.

     "Other Debentures" shall mean all junior subordinated debentures, other
      ----------------
than the Debentures (as defined in the Indenture), issued by the Guarantor, from
time to time and sold to trusts other than the Issuer to be established by the
Guarantor (if any), in each case similar to the Issuer.

     "Other Guarantees" shall mean all guarantees, other than this Capital
      ----------------
Securities Guarantee, to be issued by the Guarantor with respect to capital
securities (if any) similar to the Capital Securities, issued by trusts other
than the Issuer to be established by the Guarantor (if any), in each case
similar to the Issuer.

                                       4
<PAGE>

     "Person" shall mean 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.

     "Responsible Officer" shall mean, with respect to a Person, any officer
      -------------------
with direct responsibility for the administration of any matters relating to
this Capital Securities Guarantee.

     "Successor Capital Securities Guarantee Trustee" shall mean a successor
      ----------------------------------------------
Capital Securities Guarantee Trustee possessing the qualifications to act as
Capital Securities Guarantee Trustee under Section 4.1.

     "Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
      -------------------
amended.

     "Trust Securities" shall mean the Common Securities and the Capital
      ----------------
Securities, collectively.

                                  ARTICLE II

                              TRUST INDENTURE ACT

     SECTION 2.1   Trust Indenture Act; Application
                   --------------------------------

     (a)  This Capital Securities Guarantee is subject to the provisions of the
Trust Indenture Act that are required to be part of this Capital Securities
Guarantee and shall, to the extent applicable, be governed by such provisions.

     (b)  If and to the extent that any provision of this Capital Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control. If any provision of this Capital Securities Guarantee modifies or
excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the modified or excluded provision of the Trust Indenture Act shall be
deemed to apply to this Capital Securities Guarantee as so modified or excluded,
as the case may be.

     SECTION 2.2   Lists of Holders of Securities
                   ------------------------------

     (a)  The Guarantor shall provide the Capital Securities Guarantee Trustee
(unless the Capital Securities Guarantee Trustee is otherwise the registrar of
the Capital Securities) with a list, in such form as the Capital Securities
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders of the Capital Securities ("List of Holders") as of such date, (i)
within fourteen (14) days after each record date for payment of Distributions
(as defined in the Declaration), and (ii) at any other time within 30 days of
receipt by the Guarantor of a written request for a List of Holders as of a date
no more than 14 days before such List of Holders is given to the Capital
Securities Guarantee Trustee; provided, however, that the Guarantor shall not be
                              --------  -------
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Capital Securities
Guarantee Trustee by the

                                       5
<PAGE>

Guarantor. The Capital Securities Guarantee Trustee may destroy any List of
Holders previously given to it upon receipt of a new List of Holders.

     (b)  The Capital Securities Guarantee Trustee shall comply with its
obligations under Sections 31l(a), 31l(b) and Section 312(b) of the Trust
Indenture Act.

     SECTION 2.3   Reports by the Capital Securities Guarantee Trustee
                   ---------------------------------------------------

     By [July 31] of each year, commencing [July 31, 2001], the Capital
Securities Guarantee Trustee shall provide to the Holders of the Capital
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Capital Securities Guarantee Trustee shall also comply with
the requirements of Section 313(d) of the Trust Indenture Act.

     SECTION 2.4   Periodic Reports
                   ----------------

     The Guarantor shall provide to the Capital Securities Guarantee Trustee
such documents, reports and information as are required by Section 314 (if any)
and the compliance certificate required by Section 314 of the Trust Indenture
Act in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act. Delivery of such reports, information and documents to the
Capital Securities Guarantee Trustee is for informational purposes only and the
Capital Securities Guarantee Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Capital Securities Guarantee Trustee is
entitled to rely exclusively on Officers' Certificates).

     SECTION 2.5   Evidence of Compliance with Conditions Precedent
                   ------------------------------------------------

     The Guarantor shall provide to the Capital Securities Guarantee Trustee
such evidence of compliance with the conditions precedent, if any, provided for
in this Capital Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.

     SECTION 2.6   Waiver of Events of Default
                   ---------------------------

     The Holders of a Majority in Liquidation Amount of the Capital Securities
may, by vote, 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 any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Capital Securities
Guarantee, but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon.

     SECTION 2.7   Notice of Events of Default
                   ---------------------------
     (a)  The Capital Securities Guarantee Trustee shall, within 10 Business
Days after the occurrence of an Event of Default with respect to this Capital
Securities Guarantee actually known to a Responsible Officer of the Capital
Securities Guarantee Trustee, transmit by mail,

                                       6
<PAGE>

first class postage prepaid, to all Holders of the Capital Securities, notices
of all such Events of Default, unless such Events of Default have been cured
before the giving of such notice; provided, however, that, except in the case of
                                  --------  -------
an Event of Default arising from the non-payment of any Guarantee Payment, the
Capital Securities Guarantee Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Capital Securities
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 Capital Securities Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Capital Securities Guarantee
Trustee shall have received written notice, or a Responsible Officer of the
Capital Securities Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge, of such Event of Default.

     SECTION 2.8   Conflicting Interests
                   ---------------------

     The Declaration shall be deemed to be specifically described in this
Capital Securities Guarantee for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.

     SECTION 2.9   Guarantee Trustee May File Proofs of Claim
                   ------------------------------------------

     Upon the occurrence of an Event of Default, the Trustee is hereby
authorized to (a) recover judgment, in its own name and as trustee of an express
trust, against the Guarantor for the whole amount of any Guarantee Payments
remaining unpaid and (b) file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have its claims and those of the
Holders of the Capital Securities allowed in any judicial proceedings relative
to the Guarantor, its creditors or its property.

                                  ARTICLE III

                          POWERS, DUTIES AND RIGHTS OF
                      CAPITAL SECURITIES GUARANTEE TRUSTEE

      SECTION 3.1   Powers and Duties of the Capital Securities Guarantee
                    -----------------------------------------------------
Trustee
-------

     (a)  This Capital Securities Guarantee shall be held by the Capital
Securities Guarantee Trustee for the benefit of the Holders of the Capital
Securities, and the Capital Securities Guarantee Trustee shall not transfer this
Capital Securities Guarantee to any Person except a Holder of the Capital
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Capital Securities Guarantee Trustee on acceptance by such Successor
Capital Securities Guarantee Trustee of its appointment to act as Successor
Capital Securities Guarantee Trustee. The right, title and interest of the
Capital Securities Guarantee Trustee shall automatically vest in any Successor
Capital Securities Guarantee Trustee, and such vesting and succession of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Capital Securities
Guarantee Trustee.

                                       7
<PAGE>

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

     (c)  The Capital Securities Guarantee Trustee, before the occurrence of any
Event of Default (of which, other than a default in respect of any Guarantee
Payment, a Responsible Officer of the Property Trustee has actual knowledge) and
after the curing of all such Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Capital Securities Guarantee, and no implied covenants or obligations shall be
read into this Capital Securities Guarantee against the Capital Securities
Guarantee Trustee. In case an Event of Default has occurred (that has not been
cured or waived pursuant to Section 2.6) and is actually known to a Responsible
Officer of the Capital Securities Guarantee Trustee, the Capital Securities
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Capital Securities 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 Capital Securities Guarantee shall be construed
to relieve the Capital Securities 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 (of which, other
     than a default in respect of any Guarantee Payment, a Responsible Officer
     of the Property Trustee has actual knowledge) and after the curing or
     waiving of all such Events of Default that may have occurred:

          (A)  the duties and obligations of the Capital Securities Guarantee
     Trustee shall be determined solely by the express provisions of this
     Capital Securities Guarantee, and the Capital Securities Guarantee Trustee
     shall not be liable except for the performance of such duties and
     obligations as are specifically set forth in this Capital Securities
     Guarantee, and no implied covenants or obligations shall be read into this
     Capital Securities Guarantee against the Capital Securities Guarantee
     Trustee; and

          (B)  in the absence of bad faith on the part of the Capital Securities
     Guarantee Trustee, the Capital Securities 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 Capital Securities Guarantee Trustee and conforming to the
     requirements of this Capital Securities Guarantee; provided, however, that
                                                        --------  -------
     in the case of any such certificates or opinions that by any provision
     hereof are specifically required to be furnished to the Capital Securities
     Guarantee Trustee, the Capital Securities Guarantee Trustee shall be under
     a duty to examine the same to determine whether or not on their face they
     conform to the requirements of this Capital Securities Guarantee;

          (ii) the Capital Securities Guarantee Trustee shall not be liable for
     any errors of judgment made in good faith by a Responsible Officer of the
     Capital Securities Guarantee Trustee, unless it shall be proved that the
     Capital Securities Guarantee Trustee

                                       8
<PAGE>

     or such Responsible Officer was negligent in ascertaining the pertinent
     facts upon which such judgment was made;

          (iii)  the Capital Securities Guarantee Trustee shall not be liable
     with respect to any actions taken or omitted to be taken by it in good
     faith in accordance with the direction of the Holders of 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
     Capital Securities Guarantee Trustee, or exercising any trust or power
     conferred upon the Capital Securities Guarantee Trustee under this Capital
     Securities Guarantee; and

          (iv)   no provision of this Capital Securities Guarantee shall require
     the Capital Securities 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
     Capital Securities Guarantee Trustee shall have reasonable grounds for
     believing that the repayment of such funds or liability is not reasonably
     assured to it under the terms of this Capital Securities Guarantee or
     indemnity, reasonably satisfactory to the Capital Securities Guarantee
     Trustee, against such risk or liability is not reasonably assured to it.

     SECTION 3.2   Certain Rights of Capital Securities Guarantee Trustee
                   ------------------------------------------------------

     (a)  Subject to the provisions of Section 3.1:

          (i)    the Capital Securities 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
     Capital Securities Guarantee may be sufficiently evidenced by an Officers'
     Certificate;

          (iii)  whenever, in the administration of this Capital Securities
     Guarantee, the Capital Securities Guarantee Trustee shall deem it desirable
     that a matter be proved or established before taking, suffering or omitting
     any action hereunder, the Capital Securities 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 Officers'
     Certificate, which, upon receipt of such request, shall be promptly
     delivered by the Guarantor;

          (iv)   the Capital Securities Guarantee Trustee shall have no duty to
     see to any recording, filing or registration of any instrument or other
     document (or any rerecording, refiling or registration thereof);

          (v)    the Capital Securities 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

                                       9
<PAGE>

     omitted by it hereunder in good faith and in accordance with such advice or
     opinion; and such counsel may be counsel to the Guarantor or any of its
     Affiliates and may include any of its employees; and the Capital Securities
     Guarantee Trustee shall have the right at any time to seek instructions
     concerning the administration of this Capital Securities Guarantee from any
     court of competent jurisdiction;

          (vi)   the Capital Securities Guarantee Trustee shall be under no
     obligation to exercise any of the rights or powers vested in it by this
     Capital Securities Guarantee at the request or direction of any Holder,
     unless such Holder shall have provided to the Capital Securities Guarantee
     Trustee such security and indemnity, reasonably satisfactory to the Capital
     Securities Guarantee Trustee, against the costs, expenses (including
     attorneys' fees and expenses and the expenses of the Capital Securities
     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 Capital
     Securities Guarantee Trustee, provided, however, that nothing contained in
                                   --------  -------
     this Section 3.2(a)(vi) shall be taken to relieve the Capital Securities
     Guarantee Trustee, upon the occurrence of an Event of Default, of its
     obligation to exercise the rights and powers vested in it by this Capital
     Securities Guarantee;

          (vii)  the Capital Securities Guarantee Trustee shall have no
     obligation 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 Capital
     Securities Guarantee Trustee, in its discretion, may make such further
     inquiry or investigation into such facts or matters as it may see fit;

          (viii) the Capital Securities 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 Capital
     Securities Guarantee Trustee shall not be responsible for any misconduct or
     negligence on the part of any such person appointed with due care by it
     hereunder;

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

          (x)    whenever in the administration of this Capital Securities
     Guarantee the Capital Securities Guarantee Trustee shall deem it desirable
     to receive instructions with respect to enforcing any remedy or right or
     taking any other action hereunder, the Capital Securities Guarantee Trustee
     (i) may request instructions from the Holders of a Majority in Liquidation
     Amount of the Capital Securities, (ii) may refrain from enforcing such
     remedy or right or taking such other action until such instructions are
     received, and (iii)

                                       10
<PAGE>

     shall be protected in conclusively relying on or acting in accordance with
     such instructions; and

          (xi) the Capital Securities Guarantee Trustee shall not be liable for
     any action taken, suffered, or omitted to be taken by it in good faith,
     without negligence, and reasonably believed by it to be authorized or
     within the discretion or rights or powers conferred upon it by this Capital
     Securities Guarantee.

     (b)  No provision of this Capital Securities Guarantee shall be deemed to
impose any duty or obligation on the Capital Securities 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 Capital Securities 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 Capital Securities Guarantee Trustee shall be
construed to be a duty.

     SECTION 3.3   Not Responsible for Recitals or Issuance of Capital
                   ---------------------------------------------------
                   Securities Guarantee
                   --------------------

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

                                  ARTICLE IV

                      CAPITAL SECURITIES GUARANTEE TRUSTEE

     SECTION 4.1   Capital Securities Guarantee Trustee; Eligibility
                   -------------------------------------------------

     (a)  There shall at all times be a Capital Securities Guarantee Trustee
that shall

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

          (ii) be a corporation or other Person 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 a corporation or other Person
     permitted by the Securities and Exchange Commission to act as an indenture
     trustee under the Trust Indenture Act, authorized under such laws to
     exercise corporate trust powers, having a combined capital and surplus of
     at least fifty million U.S. dollars ($50,000,000), and subject to
     supervision or examination by federal, state, territorial or District of
     Columbia authority; it being understood that if such corporation or other
     Person 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 4.1(a)(ii) and to the extent
     permitted by the Trust Indenture Act, 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.

                                       11
<PAGE>

     (b)  If at any time the Capital Securities Guarantee Trustee shall cease to
be eligible to so act under Section 4.1(a), the Capital Securities Guarantee
Trustee shall immediately resign in the manner and with the effect set out in
Section 4.2(c).

     (c)  If the Capital Securities Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Capital Securities Guarantee Trustee and Guarantor shall in
all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.

     SECTION 4.2   Appointment, Removal and Resignation of Capital Securities
                   ----------------------------------------------------------
                   Guarantee Trustee
                   -----------------

     (a)  Subject to Section 4.2(b), the Capital Securities Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor except
during an Event of Default.

     (b)  The Capital Securities Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Capital Securities Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Capital Securities Guarantee Trustee and
delivered to the Guarantor.

     (c)  The Capital Securities Guarantee Trustee shall hold office until a
Successor Capital Securities Guarantee Trustee shall have been appointed,
subject to Section 4.1, or until its removal or resignation. The Capital
Securities Guarantee Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by the Capital
Securities Guarantee Trustee and delivered to the Guarantor, which resignation
shall not take effect until a Successor Capital Securities Guarantee Trustee has
been appointed, subject to Section 4.1, and has accepted such appointment by
instrument in writing executed by such Successor Capital Securities Guarantee
Trustee and delivered to the Guarantor and the resigning Capital Securities
Guarantee Trustee.

     (d)  If no Successor Capital Securities Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery of an instrument of removal or resignation, the Capital
Securities Guarantee Trustee resigning or being removed may petition any court
of competent jurisdiction for appointment of a Successor Capital Securities
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Capital Securities Guarantee
Trustee.

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

     (f)  Upon termination of this Capital Securities Guarantee or removal or
resignation of the Capital Securities Guarantee Trustee pursuant to this Section
4.2, the Guarantor shall pay to the Capital Securities Guarantee Trustee all
amounts due to the Capital Securities Guarantee Trustee accrued to the date of
such termination, removal or resignation.

                                       12
<PAGE>

                                   ARTICLE V

                                   GUARANTEE
                                   ---------

     SECTION 5.1   Guarantee
                   ---------

     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, right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor fully, knowingly
and unconditionally waives any right the Guarantor may have to revoke this
Guarantee under Section 2815 of the California Civil Code or otherwise. 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.

     SECTION 5.2   Waiver of Notice and Demand
                   ---------------------------

     The Guarantor hereby waives notice of acceptance of this Capital Securities
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 5.3   Obligations Not Affected
                   ------------------------

     The obligations, covenants, agreements and duties of the Guarantor under
this Capital Securities Guarantee shall be absolute and unconditional and shall
in no way be affected or impaired by reason of the happening from time to time
of any event, including without limitation the following, whether or not with
notice to, or the consent of, the Guarantor:

     (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, 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;

     (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;

                                       13
<PAGE>

     (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;

     (g)  the consummation of the Exchange Offer (subject to Section 7.1
hereof); or

     (h)  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 5.3 that the obligations of the Guarantor with respect to the
Guarantee Payments 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 5.4   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 Capital Securities Guarantee Trustee
in respect of this Capital Securities Guarantee or exercising any trust or power
conferred upon the Capital Securities Guarantee Trustee under this Capital
Securities Guarantee.

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

     (c)  No setoff, counterclaim, reduction or diminution of any obligation, or
any defense of any kind or nature that the Guarantor has or may have against any
Holder shall be available hereunder to the Guarantor against such Holder to
reduce the payments to it under this Guarantee.

     SECTION 5.5   Guarantee of Payment
                   --------------------

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

     SECTION 5.6   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 Capital Securities 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 Capital Securities
Guarantee, if, at the time of any

                                       14
<PAGE>

such payment, any amounts are due and unpaid under this Capital Securities
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.

     SECTION 5.7   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 Capital Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (h), inclusive, of Section 5.3 hereof.

                                  ARTICLE VI

                   LIMITATION OF TRANSACTIONS; SUBORDINATION

     SECTION 6.1   Limitation of Transactions
                   --------------------------

     So long as any Capital Securities remain outstanding, the Guarantor shall
not nor permit any subsidiary of the Guarantor to (i) 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, (ii)
make any payment of principal of, or interest, if any, on or repay, repurchase
or redeem any debt securities of the Guarantor (including Other Debentures) that
rank pari passu with or junior in right of payment to the Debentures, (iii) make
any guarantee payments with respect to any guarantee by the Guarantor of the
debt securities of any subsidiary of the Guarantor (including Other Guarantees)
if such guarantee ranks pari passu with or junior in right of payment to the
Debentures (other than (a) dividends or distributions in shares of, or options,
warrants, rights to subscribe for or purchase shares of, common stock of the
Guarantor, (b) any declaration of a dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under this Capital Securities Guarantee, (d) as a
result of a reclassification of the Guarantor's capital stock or the exchange or
the conversion of one class or series of the Guarantor's capital stock for
another class or series of the Guarantor's capital stock, (e) the purchase of
fractional interests in shares of the Guarantor's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, and (f) purchases of common stock related to the
issuance of common stock or rights under any of the Guarantor's benefit or
compensation plans for its directors, officers or employees or any of the
Guarantor's dividend reinvestment plans) if at such time (l) there shall have
occurred any event of which the Guarantor has actual knowledge that (A) is a
Default or Event of Default (each as defined in the Indenture) and (B) in
respect of which the Guarantor shall not have taken reasonable steps to cure,
(2) if the Debentures are held by the Property Trustee, the Guarantor shall be
in default with respect to its payment of any obligations under this Capital
Securities Guarantee or (3) the Guarantor shall have given notice of its
election of the exercise of its right to commence an Extended Interest Payment
Period as provided in the Indenture and shall not have rescinded such notice,
and such Extended Interest Payment Period, or an extension thereof, shall have
commenced and be continuing, or (iv) amend the Common Securities Guarantee to
reduce, suspend or cancel the subordination, to the

                                       15
<PAGE>

rights of holders of the Capital Securities, of Guarantee Payments (as that term
is defined in the Common Securities Guarantee with respect to the Common
Securities) with respect to the holders of the Common Securities.

     SECTION 6.2   Ranking
                   -------

     This Capital Securities Guarantee will constitute an unsecured obligation
of the Guarantor and will rank (i) subordinate and junior in right of payment to
all Allocable Amounts (as defined in the Indenture) in respect of Senior
Indebtedness (as defined in the Indenture), to the same extent and in the same
manner that the Debentures are subordinated to Senior Indebtedness pursuant to
the Indenture, it being understood that the terms of Article XV of the Indenture
shall apply to the obligations of the Guarantor under this Capital Securities
Guarantee as if such Article XV were set forth herein in full, (ii) pari passu
with the most senior preferred or preference stock now or hereafter issued by
the Guarantor, any Other Guarantee and, except to the extent set forth therein,
the Common Securities Guarantee, any Other Common Securities Guarantee, and any
guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any Affiliate of the Guarantor, and (iii)
senior to the Guarantor's common stock.

                                  ARTICLE VII

                                  TERMINATION

     SECTION 7.1   Termination
                   -----------

     This Capital Securities Guarantee shall terminate and be of no further
force and effect upon (i) full payment of the Redemption Price of all Capital
Securities, (ii) dissolution, winding up or liquidation of the Issuer,
immediately following the full payment of the amounts payable in accordance with
the Declaration, or (iii) the distribution of all of the Debentures to the
Holders of the Trust Securities. Notwithstanding the foregoing, this Capital
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of the Capital Securities must restore
payment of any sums paid under the Capital Securities or under this Capital
Securities Guarantee.

                                 ARTICLE VIII

                                INDEMNIFICATION

     SECTION 8.1   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 Capital Securities
Guarantee and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Capital Securities Guarantee or by law, except that an Indemnified Person shall
be liable

                                       16
<PAGE>

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 Guarantor and upon such information, opinions,
reports or statements presented to 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 has been selected with reasonable care
by or on behalf of the Guarantor, 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 8.2   Compensation and Indemnification
                   --------------------------------

     The Guarantor agrees to pay to the Capital Securities Guarantee Trustee
such compensation for its services as shall be mutually agreed upon by the
Guarantor and the Capital Securities Guarantee Trustee. The Guarantor shall
reimburse the Capital Securities Guarantee Trustee upon request for all
reasonable out-of-pocket expenses incurred by it, including the reasonable
compensation and expenses of the Capital Securities Guarantee Trustee's agents
and counsel, except any expense as may be attributable to the negligence or bad
faith of the Capital Securities Guarantee Trustee.

     The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any and all loss, liability, damage,
action, suit, claim or expense incurred without negligence or bad faith on its
part, 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 defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The provisions of this
Section 8.2 shall survive the termination of this Capital Securities Guarantee
and shall survive the resignation or removal of the Capital Securities Guarantee
Trustee.

                                  ARTICLE IX

                                 MISCELLANEOUS

     SECTION 9.1   Successors and Assigns
                   ----------------------

     All guarantees and agreements contained in this Capital Securities
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 permitted
by Section 10.01 of the Indenture or any sale, transfer, conveyance or other
disposition of the property of the Guarantor permitted by Section 10.01 of the
Indenture, the Guarantor may not assign its rights or delegate its obligations
under this Capital Securities Guarantee.

                                       17
<PAGE>

     SECTION 9.2   Amendments
                   ----------

     Except with respect to any changes that do not materially adversely affect
the rights of Holders of the Capital Securities (in which case no consent of
such Holders will be required), this  Capital Securities Guarantee may only be
amended with the prior approval of the Holders of a Majority in Liquidation
Amount of the  Capital Securities. The provisions of Section 12.2 of the
Declaration with respect to meetings of Holders of the Trust Securities apply to
the giving of such approval. This Capital Securities Guarantee may not be
amended, and no amendment hereof that affects the Capital Securities Guarantee
Trustee's rights, duties or immunities hereunder or otherwise, shall be
effective, unless such amendment is executed by the Capital Securities Guarantee
Trustee (which shall have no obligation to execute any such amendment, but may
do so in its sole discretion).

     SECTION 9.3   Notices
                   -------

     All notices provided for in this Capital Securities 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 Issuer, in care of the Administrative Trustee at the
Issuer's mailing address set forth below (or such other address as the Issuer
may give notice of to the Capital Securities Guarantee Trustee and the Holders
of the Capital Securities):

               GBB CAPITAL V
               2860 West Bayshore Road
               Palo Alto, California 94303
               Attention:  Steven C. Smith
               Telephone:  (650) 813-8200
               Telecopier:  (650) 494-9193

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

               WILMINGTON TRUST COMPANY
               Rodney Square North
               1100 North Market Street
               Wilmington, Delaware 19890-0001
               Attention:  Corporate Trust Administration
               Telephone:  (302) 651-1000
               Telecopier:  (302) 651-8882

                                       18
<PAGE>

     (c)  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
Capital Securities Guarantee Trustee and the Holders of the Capital Securities):

               GREATER BAY BANCORP
               2860 West Bayshore Road
               Palo Alto, California 94303
               Attention:  Steven C. Smith
               Telephone:  (650) 813-8200
               Telecopier:  (650) 494-9193

     (d)  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 9.4   Benefit
                   -------

     This Capital Securities Guarantee is solely for the benefit of the Holders
of the Capital Securities and, subject to Section 3.1(a), is not separately
transferable from the Capital Securities.

                                       19
<PAGE>

     SECTION 9.5   Governing Law
                   -------------

     THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     This Capital Securities Guarantee is executed as of  the day and year first
above written.

                              GREATER BAY BANCORP
                              as Guarantor

                              By:
                                 -------------------------------
                                 Name:  Shawn E. Saunders
                                 Title:  Senior Vice President,
                                        Finance and Accounting

                              WILMINGTON TRUST COMPANY,
                              as Capital Securities Guarantee Trustee

                              By:
                                 -------------------------------
                                 Name:
                                 Title:

                                       20<PAGE>

                                                                     Exhibit 4.7

                  ===========================================

                     COMMON SECURITIES GUARANTEE AGREEMENT

                              GREATER BAY BANCORP

                           Dated as of June __, 2001

                  ===========================================
<PAGE>

                               TABLE OF CONTENTS
                               -----------------
<TABLE>
<CAPTION>
                                                             Page
<S>                 <C>                                      <C>
ARTICLE I           DEFINITIONS AND INTERPRETATION...........  1
     SECTION 1.1    Definitions and Interpretation...........  1
ARTICLE II          GUARANTEE................................  3
     SECTION 2.1    Guarantee................................  3
     SECTION 2.2    Waiver of Notice and Demand..............  3
     SECTION 2.3    Obligations Not Affected.................  3
     SECTION 2.4    Rights of Holders........................  4
     SECTION 2.5    Guarantee of Payment.....................  4
     SECTION 2.6    Subrogation..............................  4
     SECTION 2.7    Independent Obligations..................  5
ARTICLE III         LIMITATION OF TRANSACTIONS; SUBORDINATION  5
     SECTION 3.1    Limitation of Transactions...............  5
     SECTION 3.2    Ranking..................................  6
ARTICLE IV          TERMINATION..............................  6
     SECTION 4.1    Termination..............................  6
ARTICLE V           MISCELLANEOUS............................  6
     SECTION 5.1    Successors and Assigns...................  6
     SECTION 5.2    Amendments...............................  6
     SECTION 5.3    Notices..................................  6
     SECTION 5.4    Benefit..................................  7
     SECTION 5.5    Governing Law............................  8
</TABLE>

                                       i
<PAGE>

                     COMMON SECURITIES GUARANTEE AGREEMENT

          This COMMON SECURITIES GUARANTEE AGREEMENT (the "Common Securities
Guarantee"), dated as of June __, 2001, is executed and delivered by GREATER BAY
BANCORP, a California corporation (the "Guarantor"), for the benefit of the
Holders (as defined herein) from time to time of the Common Securities (as
defined herein) of GBB CAPITAL V, a Delaware business trust (the "Issuer").

          WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of June __, 2001, by and among the Trustees of the
Issuer named therein, the Guarantor, 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 _____ common securities having an aggregate
liquidation amount of ___________________ dollars ($________), to meet the
capital requirements of the Trust; such common securities being designated the
_____% Common Securities (the "Common Securities").

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

          WHEREAS, the Guarantor is also executing and delivering the Capital
Securities Guarantee Agreement, dated as of ______, 2001 (the "Capital
Securities Guarantee"), for the benefit of the holders of the Capital Securities
(as defined in the Declaration); it being understood that if an Event of Default
(as defined in the Declaration) has occurred and is continuing, the rights of
Holders of the Common Securities to receive Guarantee Payments under this Common
Securities Guarantee are subordinated, to the extent and in the manner set forth
herein, to the rights of holders of Capital Securities (as defined in the
Declaration) to receive Guarantee Payments under the Capital Securities
Guarantee.

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

                                   ARTICLE I
                         DEFINITIONS AND INTERPRETATION

SECTION 1.1   Definitions and Interpretation
              ------------------------------
          In this Common Securities Guarantee, unless the context otherwise
requires:

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

                                       1
<PAGE>

          (b) terms defined in the Declaration as at the date of execution of
this Common Securities Guarantee have the same meaning when used in this Common
Securities Guarantee unless otherwise defined in this Common Securities
Guarantee;

          (c) a term defined anywhere in this Common Securities Guarantee has
the same meaning throughout;

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

          (e) all references in this Common Securities Guarantee to Articles and
Sections are references to Articles and Sections of this Common Securities
Guarantee unless otherwise specified;

          (f) a term defined in the Trust Indenture Act has the same meaning as
in the Trust Indenture Act unless otherwise defined in this Common Securities
Guarantee; and

          (g) a reference to the singular includes the plural and vice versa.

          "Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Common Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Common Securities, to the extent the Issuer has funds legally available
therefor at such time, (ii) the redemption price, including all accumulated and
unpaid Distributions to the date of redemption (the "Redemption Price"), to the
extent the Issuer has funds legally available therefor at such time, with
respect to any Common Securities called for redemption, and (iii) upon a
voluntary or involuntary dissolution,  winding-up or liquidation of the Issuer
(other than in connection with the distribution of Debentures (as defined in the
Declaration) to the Holders in exchange for Common Securities or in connection
with the redemption of the Common Securities, in each case as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation amount and all
accumulated and unpaid Distributions on the Common Securities to the date of
payment, to the extent the Issuer has funds legally available therefor at such
time, and (b) the amount of assets of the Issuer remaining available for
distribution to the Holders after satisfaction of liabilities to creditors of
the Issuer as required by applicable law (in either case, the "Liquidation
Distribution"). If an Event of Default under the Declaration, the Capital
Securities Guarantee Agreement has occurred and is continuing, no Guarantee
Payments with respect to the Common Securities shall be made until holders of
Capital Securities shall be paid in full the Guarantee Payments to which they
are entitled under the Capital Securities Guarantee.

          "Holder" means any holder, as registered on the books and records of
the Issuer, of any Common Securities.

          "Other Guarantees" means all guarantees, other than this Common
Securities Guarantee, to be issued by the Guarantor with respect to common
securities (if any) similar to

                                       2
<PAGE>

the Common Securities issued by trusts other than the Issuer to be established
by the Guarantor (if any), in each case similar to the Issuer.

                                  ARTICLE II
                                   GUARANTEE

SECTION 2.1   Guarantee
              ---------

          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, right of set-
off or counterclaim which the Issuer may have or assert.  The Guarantor fully,
knowingly and unconditionally waives any right the Guarantor may have to revoke
this Guarantee under Section 2815 of the California Civil Code or otherwise.
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.

SECTION 2.2   Waiver of Notice and Demand
              ---------------------------

          The Guarantor hereby waives notice of acceptance of this Common
Securities 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 2.3   Obligations Not Affected
              ------------------------

          The obligations, covenants, agreements and duties of the Guarantor
under this Common Securities 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 Common 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, Liquidation Distribution or any
other sums payable under the terms of the Common Securities or the extension of
time for the performance of any other obligation under, arising out of, or in
connection with, the Common Securities;

          (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 Common Securities, or any
action on the part of the Issuer granting indulgence or extension of any kind;

                                       3
<PAGE>

          (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 Common
Securities;

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

          (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 2.3 that the obligations of the Guarantor
with respect to the Guarantee Payments 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 2.4   Rights of Holders
              -----------------

          The Guarantor expressly acknowledges that any Holder of the Common
Securities may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Common Securities Guarantee, without first
instituting a legal proceeding against the Issuer or any other Person.

SECTION 2.5   Guarantee of Payment
              --------------------
          This Common Securities Guarantee creates a guarantee of payment and
not of collection.

SECTION 2.6   Subrogation
              -----------

          The Guarantor shall be subrogated to all (if any) rights of the
Holders of the Common Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Common Securities 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 rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Common
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Common Securities 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.

                                       4
<PAGE>

SECTION 2.7   Independent Obligations
              -----------------------

          The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Common
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Common
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 2.3 hereof.

                                  ARTICLE III
                   LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 3.1   Limitation of Transactions
              --------------------------

          So long as any Common Securities remain outstanding, the Guarantor
will not (i) declare or pay any dividends or distribution on, or redeem,
purchase, acquire or make a liquidation payment with respect to any of the
Guarantor's capital stock, (ii) make any payment of principal of, or interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Guarantor (including Other Debentures, as defined in the Indenture) that rank
pari passu with or junior in right of payment to the Debentures or (iii) make
any guarantee payments with respect to any guarantee by the Guarantor of the
debt securities of any subsidiary of the Guarantor (including Other Guarantees,
as defined in the Indenture) if such guarantee ranks pari passu with or junior
in right of payment to the Debentures (other than (a) dividends or distributions
in shares of, or options, warrants or rights to subscribe for or purchase shares
of, common stock of the Guarantor, (b) any declaration of a dividend in
connection with the implementation of a shareholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the Capital
Securities Guarantee, (d) as a result of a reclassification of the Guarantor's
capital stock or the exchange or the conversion of one class or series of the
Guarantor's capital stock for another class or series of the Guarantor's capital
stock, (e) the purchase of fractional interests in shares of the Guarantor's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, and (f) purchases of common
stock related to the issuance of common stock or rights under any of the
Guarantor's benefit or compensation plans for its directors, officers or
employees or any of the Guarantor's dividend reinvestment plans) if at such time
(1) there shall have occurred any event of which the Guarantor has actual
knowledge that (A) is, or with the giving of notice or the lapse of time, or
both, would be, an Event of Default and (B) in respect of which the Guarantor
shall not have taken reasonable steps to cure, (2) if such Debentures are held
by the Property Trustee, the Guarantor shall be in default with respect to its
payment of any obligations under the Capital Securities Guarantee or (3) the
Guarantor shall have given notice of its election of the exercise of its right
to commence an Extended Interest Payment Period as provided in the Indenture and
shall not have rescinded such notice, and such Extended Interest Payment Period,
or an extension thereof, shall have commenced and be continuing.

                                       5
<PAGE>

SECTION 3.2   Ranking
              -------

          This Common Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to the Senior Indebtedness (as defined in the Indenture), to the same
extent and in the same manner that the Debentures are subordinated to the Senior
Indebtedness pursuant to the Indenture, it being understood that the terms of
Article XV of the Indenture shall apply to the obligations of the Guarantor
under this Common Securities Guarantee as if such Article XV were set forth
herein in full, (ii) pari passu with the most senior preferred or preference
stock now or hereafter issued by the Guarantor and with any Other Guarantee and,
except as set forth herein or therein, the Capital Securities Guarantee and any
guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any Affiliate of the Guarantor and (iii) senior
to the Guarantor's common stock.

                                  ARTICLE IV
                                  TERMINATION

SECTION 4.1   Termination
              -----------

          This Common Securities Guarantee shall terminate and be of no further
force or effect upon (i) full payment of the Redemption Price of all Common
Securities, (ii) the dissolution, winding-up or liquidation of the Issuer,
immediately following the full payment of the amounts payable in accordance with
the Declaration, or (iii) the distribution of all of the Debentures to the
Holders of the Trust Securities (as defined in the Declaration). Notwithstanding
the foregoing, this Common Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder of the Common
Securities must restore payment of any sums paid under the Common Securities or
under this Common Securities Guarantee.

                                   ARTICLE V
                                 MISCELLANEOUS

SECTION 5.1   Successors and Assigns
              ----------------------

          All guarantees and agreements contained in this Common Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Common Securities then outstanding.

SECTION 5.2   Amendments
              ----------

          Except with respect to any changes which do not adversely affect in
any material respect the rights of the Holders (in which case no consent of the
Holders will be required), this Common Securities Guarantee may only be amended
with the prior approval of the Holders of a majority in liquidation amount of
all the outstanding Common Securities. The provisions of Section 12.2 of the
Declaration with respect to meetings of Holders of the Trust Securities apply to
the giving of such approval.

                                       6
<PAGE>

SECTION 5.3   Notices
              -------

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

          (a) if given to the Issuer, in care of the Administrative Trustee at
the Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Holders of the Common Securities):

               GBB CAPITAL V
               c/o Greater Bay Bancorp
               2860 West Bayshore Road
               Palo Alto, California 94303
               Attention:  Steven C. Smith
               Telephone: (650) 813-8200
               Telecopier: (650) 494-9193

          (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 Common Securities):

               GREATER BAY BANCORP
               2860 West Bayshore Road
               Palo Alto, California 94303
               Attention:  Steven C. Smith
               Telephone: (650) 813-8200
               Telecopier: (650) 494-9193

           (c) if given to any Holder of the Common 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 5.4   Benefit
              -------
          This Common Securities Guarantee is solely for the benefit of the
Holders of the Common Securities and is not separately transferrable from the
Common Securities.

                                       7
<PAGE>

SECTION 5.5   Governing Law
              -------------
          THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

          This Common Securities Guarantee is executed as of the day and year
first above written.

                              GREATER BAY BANCORP

                              By:________________________________________
                                 Name:  Shawn E. Saunders
                                 Title: Senior Vice President, Finance
                                        and Accounting

                                       8

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