Document:

<PAGE>

                                                                    EXHIBIT 10.7

                                   SUBLEASE
                                   --------

          This Sublease, dated this 16th day of September, 1998, is entered into
by and between WASHINGTON MUTUAL BANK, FA, successor in interest to GREAT
WESTERN SAVINGS AND LOAN ASSOCIATION, ("Sublandlord"), and PACIFIC MERCANTILE
BANK("Subtenant") as a Sublease under a lease dated April 25, 1991, entered into
by and between The Irvine Company, as landlord (the "Landlord"), and Great
Western Savings and Loan Association, as Tenant, as amended by that certain
First Amendment to Lease dated February 20, 1996 (as amended, the "Master
Lease"). A copy of the Master Lease is attached hereto as Exhibit "A". All terms
not defined herein shall have the same meaning as in the Master Lease.

          1.  Premises.  Sublandlord hereby leases to Subtenant, and Subtenant
              --------
hereby leases from Sublandlord, the Premises leased by Sublandlord from Landlord
under the Master Lease, as shown on Exhibit "A" attached thereto.

          2.  Term.  The term of this Sublease shall commence on the date upon
              ----
which Tenant receives regulatory approval to open for business at the Premises
(the "Commencement Date"), provided, however, if the term has not commenced on
or before September 15, 1998, either party hereto may terminate this Sublease by
written notice to the other.  Tenant may take possession of the Premises as of
the date hereof for the purpose of installing tenant improvements
("Improvements").  Unless sooner terminated under any provision of the Master
Lease or this Sublease, the term shall continue until June 30, 2001 (the
"Term"). Sublandlord

                                       1
<PAGE>

shall assist Subtenant in negotiating with Landlord to lease the premises
following expiration of this Sublease.

          3.  Rent.  From the Commencement Date though and including the last
              ----
day of the 4th month following the Commencement Date, no Rent shall be due but
Tenant shall perform all covenants contained herein; from the first day of the
5th month following the Commencement Date through and including the last day of
the 10th month following the Commencement Date, Base Rent shall be $15,286.25
per month; from the first day of the 11th month following the Commencement Date
until the end of the Term, Base Rent shall be 17,033.25 per month.  Such amount
shall be payable in advance on or before the first day of each calendar month
during the Term hereof.  In addition to the Base Rent, Subtenant shall pay as
additional rent Tenant's Allocable Share of Building Operating Expenses as
provided by Subsection 4.2 of the Master Lease ("Additional Rent" and together
with the Base Rent, the "Rent").  The Rent payable for any portion of a calendar
month shall be a pro rata portion of the Rent payable for a full calendar month.
Such Rent shall be paid without deduction or offset, in lawful money of the
United States of America to Sublandlord at Sublandlord's address set forth in
Section 6 hereof, or at such other place as Sublandlord may designate in
writing.

          4.  Security Deposit. On execution of this Sublease, Subtenant shall
              ----------------
deposit with Sublandlord the sum of $15,286.25 as a security deposit (the
"Security Deposit") for the performance by Subtenant of the provisions of this
Sublease. If Subtenant is

                                       2
<PAGE>

in default, Sublandlord may use the Security Deposit, or any portion of it, to
cure the default or to compensate the Sublandlord for all damage sustained by
Sublandlord resulting from Subtenant's default.  Subtenant shall immediately on
demand pay to Sublandlord a sum equal to the portion of the Security Deposit
expended or applied by Sublandlord as provided in this Section 4 so as to
maintain the Security Deposit in the sum initially deposited with the
Sublandlord.  If Subtenant is not in default at the expiration or termination of
this Sublease, Sublandlord shall return the Security Deposit to Subtenant.
Sublandlord's obligations with respect to the Security Deposit are those of a
debtor and not a trustee.  Sublandlord may maintain the Security Deposit
separate and apart from Sublandlord's general and other funds or may commingle
the Security Deposit with Sublandlord's general and other funds.  Sublandlord
shall not be required to pay Subtenant any interest on the Security Deposit.

          5.  Condition of Premises. Subtenant understands that it will accept
              ---------------------
the Premises in its current condition and that Subtenant will have full
responsibility for making any Improvements to the premises.  Any such
Improvements to be installed by Subtenant, including, without limitation, any
automatic teller machines, shall be subject to the approval of Landlord and
Sublandlord and shall be constructed in accordance with the terms of the Master
Lease and applicable laws, ordinances, rules and regulations, of any government
body or board of fire underwriters having jurisdiction over the Premises.

                                       3
<PAGE>

At the expiration of the Term of this Sublease, Subtenant may (and, at
Landlord's option shall) remove from the Premises all Improvements and
Subtenant's personal property and shall repair any damage and perform any
restoration work caused by such removal.

          6.  Incorporation by reference.  The following sections of the Master
              --------------------------
Lease are incorporated herein by reference as terms and conditions of this
Sublease as though each reference therein to "Tenant" were a reference to
Subtenant, each reference therein to "Landlord" were a reference to Sublandlord,
and each reference therein to "Lease" were a reference to this Sublease:

          (a)  Article II.

          (b)  Section 4.2.

          (c)  Article V.

          (d)  Article VI (except that the term "Landlord" in Article VI shall
               mean the Landlord under the Master Lease, and not the
               Sublandlord).

          (e)  Article VII (except that the term "Landlord" as used in Article
               VII shall mean the Landlord under the Master Lease and not the
               Sublandlord).

          (f)  Articles VIII, IX and X.

          (g)  Articles XI and XII (except that the term "Landlord" in Articles
               XI and XII shall mean the Landlord under the Master Lease, and
               not the Sublandlord).

          (h)  Articles XIII, XIV, XV and XVII.

                                       4
<PAGE>

          (i)  Article XIX (except that the term "Landlord" as used in XIX shall
               mean the Landlord under the Master Lease, and not the
               Sublandlord).
          (j)  Articles XX, XXI and XXII.

          7.  Signage.  Subject to the Landlord's prior written consent,
              -------
Subtenant shall have the right to eyebrow building signage in addition to the
same right to signage as the Sublandlord as provided by Section 5.2 of the
Master Lease.

          8.  Approval.  Prior to taking any such action with respect to the
              --------
Premises that would require the Sublandlord to obtain the Landlord's approval
under the Master Lease, Subtenant must first obtain approval from both the
Sublandlord and the Landlord.

          9.  Rights of Landlord.  In consideration of Landlord's consent to
              ------------------
this Sublease, Sublandlord and Subtenant hereby agree as follows:

              (a)  Sublandlord hereby irrevocably assigns to Landlord all of
     Sublandlord's interest in all Rent and income arising from this Sublease,
     and Landlord may collect such rent and income and apply same toward
     Sublandlord's obligations under the Master Lease; provided, however, until
     a default occurs in the performance of Sublandlord's obligations under the
     Master Lease, Sublandlord shall have the right to receive and collect the
     Rent under this Sublease.  Landlord shall not, by reason of this assignment
     or the collection of sublease rentals, be deemed liable to

                                       5
<PAGE>

     Subtenant for the performance of any of Sublandlord's obligations under
     this Sublease. Sublandlord hereby irrevocably authorizes and directs
     Subtenant, upon receipt of a written notice from Landlord stating that an
     uncured default exists in the performance of Sublandlord's obligations
     under the Master Lease, to pay to Landlord all sums then and thereafter due
     under this Sublease. Sublandlord agrees that Subtenant may rely on that
     notice without any duty of further inquiry and notwithstanding any notice
     or claim by Sublandlord to the contrary. Sublandlord shall have no right or
     claim against Subtenant or Landlord for any rentals so paid to Landlord.

              (b)  In the event of the termination of the Master Lease, Landlord
     may, at its sole option, take over Sublandlord's entire interest in this
     Sublease and, upon notice from Landlord, Subtenant shall attorn to
     Landlord.  In no event, however, shall Landlord be liable for any previous
     act or omission by Sublandlord under this Sublease or for the return of any
     advance rental payments or deposits under this Sublease that have not been
     actually delivered to Landlord, nor shall Landlord be bound by any sublease
     modification executed without Landlord's consent or for any advance rental
     payment by Subtenant in excess of one month's rent.

          10. Notices.  Whenever Sublandlord or Subtenant shall desire to give
              -------
or serve upon the other any notice, demand, request or other communication with
respect to this Sublease or

                                       6
<PAGE>

the Premises, such notice, demand, request or other communication shall be in
writing and shall be given to the other party by United States registered or
certified mail, postage prepaid, return receipt requested,

if to Sublandlord:

                    Washington Mutual Bank, FA
                    Corporate Property Servicer
                    9301 Corbin Ave.
                    M/S N030101
                    Northridge, CA  91324
                    Attention: H. Arthur West

if to Subtenant:

                    Pacific Mercantile Bank
                    _________________________________
                    _________________________________

or at such other address or addresses as Sublandlord, or Subtenant may from time
to time designate by notice, demand, request or other communication hereunder.

                                       7
<PAGE>

     Attached hereto and made a part hereof is Addendum I.

     IN WITNESS WHEREOF, the undersigned have executed this Sublease as of the
day and date first written above.

                                         SUBLANDLORD:

                                         WASHINGTON MUTUAL BANK, FA

                                         By /s/ KENDALL BATEMAN
                                            __________________________________
                                            Name: Kendall Bateman
                                            Title: First Vice President

                                         SUBTENANT:

                                         PACIFIC MERCANTILE BANK (PROPOSED)

                                         By /s/ RAYMOND E. DELLERBA
                                            __________________________________
                                            Name: Raymond E. Dellerba
                                            Title: President & CEO (PROPOSED)

                                       8
<PAGE>

                      ADDENDUM I TO SUBLEASE DATED 9-16-98

Notwithstanding any other provisions contained in this Sublease, in the event
(a) Sublessee or its successors or assignees shall become insolvent or bankrupt,
or if it or their interests under this Sublease shall be levied upon or sold
under execution or other legal process, or (b) the depository institution then
operating on the Premises is closed, or is taken over by any depository
institution supervisory authority ("Authority"), Sub-Lessor may, in either such
event terminate this Sublease only with the concurrence of any Receiver of
Liquidator appointed by such Authority; provided, that in the event this
Sublease is terminated by the Receiver of Liquidator, the maximum claim of Sub-
lessor for rent, damages, or indemnity for injury resulting from the
termination, rejection, or abandonment of the unexpired Sublease shall be law,
and in no event be an amount equal to all accrued and unpaid rent to the date of
termination.<PAGE>

                                                                    EXHIBIT 10.8

             Standard Internet Banking System Licensing Agreement

                                 prepared for
                  Pacific Mercantile Bank, Newport Beach,  CA

1.   The Agreement.
------------------

     Q-UP Systems (QUP), a d.b.a. of Sage Systems Incorporated, grants to
     Pacific Mercantile Bank doing business at, 450 Newport Center Drive, Suite
     100, Newport Beach, CA 92660-7610 (Client), a license to use QUP's Internet
     Banking System software and any additional module listed in Exhibit A. The
     license is non-exclusive and non-transferable and is limited to the
     conditions of this Agreement.

2.   The System.
---------------

     The Internet Banking System software, any additional module listed in
     Exhibit A, all of the peripheral attachments such as pertinent
     documentation and any future upgrades, will be hereafter referred to as
     "The System".

3.   The System Title and License.
---------------------------------

     Client's title rights to The System consist only of the license to use The
     System as detailed by the terms of this Agreement. Otherwise, title to The
     System remains the sole possession of QUP. Client will have access to a
     complete copy of QUP's source code and any related updates and
     documentation for The System in the event that QUP should cease its
     business operations. The code will be stored in escrow.

     Under the terms of this license Agreement, Client shall have no right to
     sub-license, sell, reproduce, manipulate the code or combine The System in
     any manner. Use of The System is restricted to processing the data needs of
     Client named in this Agreement only, which thus prohibits time-sharing or
     servicing The System on behalf of a third party.

4.   Purchase Price.
-------------------

     A deposit as listed in Exhibit A is due upon execution of this Agreement.
     The remaining balance is due and payable upon receipt of an invoice from
     QUP subsequent to the Installation. Costs for The System are listed in
     Exhibit A.

5.   Pre-Installation Requirements.
----------------------------------

     Client must provide and have ready prior to the day of installation the
     following:

          a)   Internet Connectivity.
               ---------------------

     Client is responsible for acquiring Internet connectivity through an
     Internet Service Provider. Email, browsers, chat programs and other
     Internet services not directly related to The System are also the
     responsibility of the Client.

          b)   Fully Tested Communication Line.
               -------------------------------

     Client must install a line of communication (minimum required - ISDN line)
     from the demarcation point outside to the ultimate link inside Client's
     building. Client must certify in writing to QUP prior to installation that
     the line is connected and operating. Client bears all responsibility and
     all associated costs for the connection. QUP can advise Client on how to
     accomplish the communication line, if necessary. In the event that a failed
     communication line delays installation, Client will be responsible for the
     extra costs associated with the delay.

     In order to fully test the communication line, a router must be installed.
     Client is responsible for installing the router. QUP can provide this
     service for the compensation of time, materials and travel expenses.

          c)   Hardware.
               --------

     As Client has chosen to house The System on-site, Client is responsible for
     procurement of the minimum hardware requirements as listed in Exhibit A. At
     Client's request, QUP may provide turnkey assistance in the procurement of
     all of the necessary hardware with all bills being sent to Client.

          d)   Core Software Data Interface.
               ----------------------------

     QUP will provide the correct interface between Client's host computer
     system and The System. Client is responsible for providing the "Pull" files
     in the required formats to extract the necessary data from the host
     computer system to be utilized by The System. Provided that Client provides
     all required files in the correct format, QUP will assume responsibility
     for proper functioning of the interface and will cooperate fully with
     client to ensure continued proper functioning of this interface. Client,
     however, is responsible for any and all costs associated with providing the
     required "Pull" files for this interface, including any billing(s) by the
     Client's host vendor or other computer professionals employed by Client to
     facilitate such process.

6.   Server Procedures.
----------------------

     Client will ship its server to QUP's Corporate Headquarters for preparation
     of installation. QUP will install and configure The System onto the WinNT
     4.0 server, the router, secure access firewall software, and Verisign
     Security Digital ID. QUP will pre-test the server before delivery to ensure
     it is functioning properly. QUP will then deliver the secured, configured
     server to Client on the installation date agreed to by both parties.

7.   On-Site Responsibilities.
-----------------------------

     Client must acknowledge and agree to accept the indirect responsibilities
     of operating and maintaining The System "in-house". For every subparagraph
     below, QUP can provide assistance at Client's request. However, QUP
     reserves the right to charge Client at standard service rates for any
     assistance that does not specifically relate to The System.

          a)   NT Server.
               ---------
<PAGE>

Q-UP Systems In-Bank License Agreement                                    Page 2

     Client assumes full responsibility for the server on which The System and
     the NT software platform rests. Troubleshooting issues that arise from the
     NT server should be addressed to the manufacturer of that server. QUP will
     provide at time of installation the appropriate contact number for
     assistance with the NT Server.

          b)   NT Software.
               -----------
     Client assumes full responsibility for its NT server software. Support
     issues arising over the NT software should be addressed to Microsoft Corp.

          c)   Router.
               ------

     Client assumes full responsibility for the router. Troubleshooting issues
     arising over the router should be addressed to the manufacturer of that
     router. QUP will provide at time of installation the appropriate contact
     number for assistance with the router.

          d)   Tape Back Up.
               ------------

     The System comes equipped with pre-installed, pre-configured tape back up
     software. Client is also provided with instructions that detail how the
     software works and needs to be maintained on a daily basis. Client must
     procure the tape drive, as noted in the hardware requirements in Exhibit A.
     QUP can assist Client on how to operate the tape back up, but it is
     Client's full responsibility to ensure daily completion of the tape back up
     procedure.

8.   Installation.
-----------------

     QUP will deliver and install The System. Client and QUP will mutually agree
     upon time and date for delivery at some point after the Agreement is
     executed and the deposit has been tendered, unless QUP executives and
     Client have made other arrangements. Installation includes testing The
     System to ensure that it is functioning properly and training of designated
     representatives.

          a)   Costs.
               -----
     All reasonable costs associated with installation, including travel, meals,
     lodging, etc are to be reimbursed by Client.

9.   Training.
-------------

     Client must appoint one or more technical representatives to be present on
     the day of installation. Training includes educating Client's technical
     representatives about the day to day operations and general maintenance of
     The System. QUP will provide the Client's designated personnel with an
     Internal User's Guide that explains the utilities of The System. If Client
     wishes, QUP will also hold a general training session for customer
     representatives, tellers, etc to teach them how to use The System from the
     customer's perspective in order to help facilitate answers to possible
     questions from customers.

10.  Installation Packet.
------------------------

     Client will receive a packet that includes operational guidelines, a back
     up installation diskette and procedural forms.

11.  Support Services.
---------------------

     Client can reach QUP at its headquarters Monday through Friday, 8:00 a.m.
     to 5:00 p.m., CST to get assistance for The System. When upgrades are made
     to The System, QUP will contact Client to arrange for transfer of the
     enhanced files.

12.  Termination.
----------------

     This Agreement may be terminated if either party fails in the performance
     of any of its duties or obligations under this Agreement. In such an event,
     the harmed party may terminate this Agreement by sending written notice to
     the breaching party. A party receiving written notice of a harm has ninety
     (90) days from receipt of written notice in which to remedy the Breach to
     the reasonable satisfaction of the harmed party. If no cure has been
     reached within ninety (90) days this Agreement automatically terminates. In
     the event of termination, Client will uninstall The System and return all
     marketing, operating, procedural and all other material information, and
     other property relating to The System, to QUP within thirty (30) days of
     termination.

13.  Limited Warranty; Warranty Disclaimer; Limitation of Liability.
-------------------------------------------------------------------

          (a)  Limited Warranty. QUP warrants that is has full corporate power
               ----------------
     and authority to enter into this Agreement, and further warrants that all
     computer software included as part of The System is Year 2000 Compliant,
     which means that all such software will operate prior to, during, and after
     the calendar year 2000, A.D., and that the software will operate during
     each such time period without substantial error relating to date data,
     specifically including error relating to, or the product of, date data
     which represents or references different centuries or more than one
     century.

          (b)  Warranty Disclaimer. THE LIMITED WARRANTY SET FORTH IN
               -------------------
      SUBSECTION 13 (a) ABOVE IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
      IMPLIED, AND QUP EXPRESSLY CLAIMS ALL OTHER WARRANTIES, INCLUDING BUT NOT
      LIMITED TO WARRANTIES OF NON-INFRINGEMENT, FITNESS FOR A PARTICULAR
      PURPOSE OR MERCHANTABILITY WITH RESPECT THERETO.

          (c)  Sole Remedies. In the event that the magnetic media on which The
               -------------
     System is recorded is defective as to material or workmanship under normal
     at any time during the sixty (60) day period immediately following the date
     of installation of The System, QUP shall repair or replace any such
     defective magnetic media, at its sole option, upon receipt of notice of
     such defect from Client, provided that such notice is received within a
     reasonable time after such defect is or should have been known by Client.
     Client's sole and exclusive remedy for such defective magnetic media shall
     be its repair or replacement by QUP.
<PAGE>

Q-UP Systems In-Bank License Agreement                                    Page 3

          In the event that The System fails to substantially conform to either
     the operational guidelines discussed in Section 10 of this Agreement or to
     the Year 2000 limited warranty set out in Section 13 (a) at any time during
     the initial term of this Agreement QUP will, at its sole option upon
     receipt of written notice from Client received by QUP within a reasonable
     time after such failure is or should have been known by Client of such
     failure of The System to so substantially conform, either repair or replace
     The System so that it thereafter substantially conforms to such operational
     guidelines. In the event that QUP is unable to either so repair or replace
     The System within a reasonable period of time after QUP's receipt of
     written notice from the Client, QUP shall refund all amounts previously
     paid by Client pursuant to this Agreement, this Agreement shall thereupon
     terminate, and Client shall uninstall The System and return The System and
     all marketing, operating, procedural and other material information
     relating to The System to QUP within thirty (30) days of receiving said
     refund from QUP. QUP's repair or replacement of The System or, in the
     alternative, QUP's refund to Client of all funds paid pursuant to this
     Section 13, constitutes Client's sole and exclusive remedy for any
     applicable failure of The System to substantially conform to the
     operational guidelines for The System.

          (d)  Limitation of Damages. QUP SHALL NOT BE LIABLE TO CLIENT OR ANY
               ---------------------
     THIRD PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT
     DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, ARISING OUT OF THIS
     AGREEMENT, WHETHER OR NOT QUP HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
     DAMAGES, AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY
     LIMITED REMEDY. QUP'S LIABILITY UNDER THIS AGREEMENT FOR ANY AND ALL ACTS
     OR OMISSIONS SHALL NOT EXCEED THE AMOUNTS ACTUALLY PAID TO QUP UNDER THIS
     AGREEMENT. PROVIDED, HOWEVER, THE LIMITATION OF LIABILITY SHALL NOT APPLY
     TO QUP'S OBLIGATIONS PURSUANT TO SECTION 29 OF THIS AGREEMENT.

14.  Server Responsibility.
--------------------------

     QUP is responsible for the presence and continued operation of The System
     on Client's server.

          a)   FTP Requirements.  In the event that Client's server runs FTP, it
               ----------------
     is a security requirement that the FTP service be turned off. On occasion,
     a QUP representative will need to transfer files to Client, at which time
     the QUP representative will arrange a specific and fixed time for the FTP
     service to be turned on. The FTP session between QUP and Client will be
     password-controlled. At the end of any FTP session, the QUP representative
     will instruct Client to stop the FTP service.

15.  Network Security.
---------------------

     QUP agrees to secure the stand-alone Web server that is responsible for the
     storage of data received from the bank's core system. This stand-alone
     server is equipped with industry standard security measures to protect it
     from intrusion and corruption. If Client links the stand-alone server to
     any other of its networks or PC's, Client is fully responsible for the
     connection, configuration and security components involved with the
     additional connection(s).

     QUP SHALL NOT BE LIABLE TO CLIENT OR TO ANY THIRD PARTY FOR ANY BREACH OF
     SECURITY OR VIOLATION OF PRIVACY ISSUES THAT MAY OCCUR WITH RELATION TO THE
     SYSTEM. CLIENT SHALL DEFEND OR SETTLE, AT ITS OWN EXPENSE, ANY CLAIMS OR
     CAUSE OF ACTION OR PROCEEDING DUE TO A BREACH OF SECURITY OR VIOLATION OF
     PRIVACY.

16.  Confidentiality.
--------------------

     QUP and Client agree that this Agreement, and the relationship it
     represents, requires the exchange of confidential information over the
     course of normal business. QUP and Client further agree that this
     confidential information is to be communicated and handled in the strictest
     of confidence. QUP and Client agree not to disclose any information about
     the other to third parties that is not already readily available to the
     public. In short, QUP and Client agree to treat each other's confidential
     business data with the same sensitivity and propriety as they would their
     own.

17.  Electronic Bill Payment.
----------------------------

     Client agrees that for the life of this licensing agreement Client will not
     utilize any other software than The System for the settlement and
     disbursement of electronic bill payments as they originate from The System.
     Exclusive use of The System for originating, settling and disbursement of
     electronic bill payments originating from The System is a condition of this
     Agreement. All fees associated with Bill Payment are enumerated in Exhibit
     A. To activate Bill Payment, Client must execute the Bill Payer Activation
     Form- Attachment B, of this Agreement.

          a.)  Monthly Report and Fees.
               -----------------------

     QUP will record the number of users per month and bill Client as per the
     Bill Pay fees listed in Exhibit A. Client will be invoiced and remittance
     is due by the 10th of the following month.

18.  Annual License and Maintenance.
-----------------------------------

     An annual license fee is to be paid to QUP at the amount listed in Exhibit
     A. Client will receive thirty (30) days advance notice of any fee increase
     prior to its effective date. Fees may increase annually, but are guaranteed
     not to exceed 5% of the previous year's total.
<PAGE>

Q-UP Systems In-Bank License Agreement                                    Page 4

19.  Federal Compliance.
-----------------------

     QUP agrees to maintain compliance with any new federal regulations that may
     require programming changes to the System. These required changes are to be
     covered under Client's annual license and maintenance agreement. Client
     agrees to accept financial responsibility for any costs (both hardware and
     software) associated with conforming to Federal banking regulations, with
     the exception of the programming changes mention above.

20.  Copyrights and Trademarks.
------------------------------

     QUP has the sole right to copyright or trademark all components of The
     System, The System name and all logos associated with The System.

21.  Changes to The System.
--------------------------

     Requests by Client to modify The System will be taken and reviewed on a
     quarterly basis. QUP reserves the right to determine the schedule of
     changes for a given quarter.

22.  Jurisdiction.
-----------------

     The enforceability of this Agreement is subject to the laws of the State of
     Texas. Jurisdiction and venue for any action arising out of the
     relationship between QUP and Client shall exclusively be in state or
     federal court located in Travis County, Texas.

23.  Agreement.
--------------

     Once executed, this Agreement constitutes the complete understanding
     between Client and QUP as to the nature of their business relationship and
     thereon supercedes any previous agreements whether oral or written between
     the parties. This Agreement is executed when QUP receives the signed
     Agreement. This Agreement may be modified or supplemented only by a further
     execution of the change in writing by an authorized representative of both
     parties. This Agreement is binding on all heirs, successors and assignees
     of Client and QUP.

24.  Term and Renewal.
---------------------

     This Agreement extends to one year beyond the date named below (with
     signature). The Agreement renews automatically for additional one year
     periods unless either party notifies the other in writing of the desire to
     discontinue the Agreement sixty (60) days prior to the renewal date.

25.  Notices.
------------

     Please send notices to QUP Headquarters:
     Q-UP Systems
     8303 Mopac
     B 450
     Austin, Texas 78759

26.  Hold Period.
----------------

     QUP strongly recommends that after installation Client wait 30 days before
     introducing The System to its customer base in order to fully test and
     fine-tune the interface between The System and Client's core software
     system.

27.  Client Responsibilities for Check Imaging.
----------------------------------------------

     Client is fully responsible for providing the data interface program that
     transfers data between The System and Client's Host System, as well as all
     associated costs related to the interface.

     It is Client's responsibility, in conjunction with Client's check imaging
     vendor, to supply QUP with the required check image file format for images
     and indices, if available. QUP will write a check imaging interface to meet
     these file format specifications. In addition, Client, in conjunction with
     Client's check imaging vendor, is responsible for providing the application
     that retrieves and delivers the image files to the Web server, either
     through direct connection to the Web server or shared space on Client's
     Local Area Network (LAN).

28.  Web Site Fee Schedule.
--------------------------

     See Exhibit B for specifics on product and services to be provided by QUP.

29.  Indemnification.
--------------------

     QUP hereby agrees to indemnify Client and hold Client harmless, subject to
     the limitation of liability stated in Section 13(d) of this Agreement, from
     and against any claims of infringement of any copyright or trade secret
     protected under the laws of the United States, including reasonable legal
     fees and expenses. QUP's obligation to so indemnify and hold harmless
     Client is expressly conditioned on Client notifying QUP in writing promptly
     after Client becomes aware of any such claim, and Client will allow QUP to
     control the proceedings. Client will cooperate fully with QUP during such
     proceedings. In the event any permanent injunction is entered prohibiting
     Client from utilizing all or any part of The System, QUP may but shall not
     be obligated to replace, in whole or in part, the subject of the injunction
     with substantially compatible and functionally equivalent software and/or
     items, or modify such software or other items to avoid infringement.
<PAGE>

                                                                          Page 5

30. Signatures
--------------

     By signing this page, authorized parties of both Client and Q-UP agree to
     the terms and conditions set forth in the entire agreement.

Sage Systems, dba QUP Systems                    Pacific Mercantile Bank

By:        Mr. L. D. Martin                 By:       Mr. John P. Cronin
   ---------------------------------              -----------------------------
        (print or type name)                         Mr. Daniel L. Erickson
                                                  -----------------------------
                                                   (print or type name)

Title:        President                     Title:         EVP
      ------------------------------              --------------------------
                                                           EVP
                                                  --------------------------

Date:           1-28-99                     Date:           1-28-99
     -------------------------------             ---------------------------

                                                    /s/ John P. Cronin
                                                 ---------------------------

          /s/ L.D. Martin                           /s/ Daniel L. Erikson
     -------------------------------             ---------------------------
            Q-UP Signature                            Client Signature

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00004-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00004-of-00352.parquet"}]]