GREATER BAY BANCORP
LETTER AMENDMENT AND REVOLVING LINE OF CREDIT NOTE
<DOCUMENT>
<TYPE>EX-10.16.2
<SEQUENCE>11
<FILENAME>0011.txt
<DESCRIPTION>LETTER AMENDMENT AND REVOLVING LINE OF CREDIT NOTE
<TEXT>

<PAGE>

                                                                 Exhibit 10.16.2


                                                     September 30, 2000



Greater Bay Bancorp
2860 W. Bayshore Road
Palo Alto, CA 94303
Attention: Kamran Husain

Dear Mr. Husain:


          This letter amendment (this "Amendment") is to confirm the changes
agreed upon between Wells Fargo Bank, National Association ("Bank") and Greater
Bay Bancorp ("Borrower") to the terms and conditions of that certain letter
agreement between Bank and Borrower dated as of November 4, 1999, as amended
from time to time (the "Agreement").  For valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Bank and Borrower hereby agree
that the Agreement shall be amended as follows to reflect said changes.

          1.   The Agreement is hereby amended (a) by deleting "November 2,
               2000" as the last day on which Bank will make advances under the
               Line of Credit, and by substituting for said date "October 30,
               2001," and (b) by deleting "Twenty Five Million Dollars
               ($25,000,000.00)" as the maximum principal amount available to
               Borrower under the Line of Credit, and by substituting for said
               amount "Forty Million Dollars ($40,000,000.00)," with such
               changes to be effective upon the execution and delivery to Bank
               of a promissory note substantially in the form of Exhibit A
               attached hereto (which promissory note shall replace and be
               deemed the Line of Credit Note defined in and made pursuant to
               the Agreement) and all other contracts, instruments and documents
               required by Bank to evidence such change. In no event shall
               proceeds of the Line of Credit be used to finance acquisitions.

          2.   Section 1.1(b) is hereby amended to read as follows:

               "(b) Borrowing and Repayment. Borrower may from time to time
                    -----------------------
               during the term of the Line of Credit borrow, partially or wholly
               repay its outstanding borrowings, and reborrow, subject to all of
               the limitations, terms and conditions contained herein or in the
               Line of Credit Note; provided however, that (i) the total
               outstanding borrowings under the Line of Credit shall not at any
               time exceed the maximum principal amount available thereunder, as
               set forth above, and that (ii) Borrower shall maintain a zero
               balance on the Line of Credit for a period of 30 consecutive
               calendar days during the term of the Line of Credit."

          3.   Section V.3(a) is hereby amended to read as follows:

               "(a) not later than 95 days after and as of the end of each
               fiscal year, an audited consolidated financial statement of
               Borrower, prepared by independent certified public accountants
               acceptable to Bank, and an unconsolidated financial statement of
               Borrower, prepared by Borrower, in all cases to include balance
<PAGE>

               sheet, income statement, and statement of cash flows, together
               with, for the audited statements, an unqualified opinion;"

          4.   The introductory paragraph of Section V.9 is hereby amended to
               read as follows:

               9.   Financial Condition. Maintain Borrower's financial condition
                    -------------------
               (and, with respect to paragraphs (c) and (d) below, cause all of
               Borrower's subsidiaries or Bank Subsidiaries (as applicable) to
               maintain their combined financial condition) as follows using
               generally accepted accounting principles consistently applied and
               used consistently with prior practices (except to the extent
               modified by the definitions herein), with compliance determined
               commencing with Borrower's financial statements for the period
               ending September 30, 1999:

          5.   The following is hereby added to the Agreement as Paragraph
               V.9(d):

               (d)  Non-Performing Assets not greater than one and fifteen
               hundredths percent (1.15%) of all Bank Subsidiaries' total loans
               and OREO, determined as of the end of each fiscal quarter, with
               Non-Performing Assets defined as the sum of all Bank
               Subsidiaries' non-performing loans and OREO, and with OREO
               defined as other real estate owned.

          6.   Section V.10 (Other Indebtedness) is hereby deleted.

          7.   Section V.14 (Year 2000 Compliance) is hereby deleted.

          8.   In consideration of the changes set forth herein and as a
               condition to the effectiveness hereof, immediately upon signing
               this Amendment Borrower shall pay to Bank a non-refundable fee of
               $40,000.00.

          9.   Except as specifically provided herein, all terms and conditions
               of the Agreement remain in full force and effect, without waiver
               or modification. All terms defined in the Agreement shall have
               the same meaning when used herein. This Amendment and the
               Agreement shall be read together, as one document.

          10.  Borrower hereby remakes all representations and warranties
               contained in the Agreement and reaffirms all covenants set forth
               therein. Borrower further certifies that as of the date of
               Borrower's acknowledgment set forth below there exists no default
               or defined event of default under the Agreement or any promissory
               note or other contract, instrument or document executed in
               connection therewith, nor any condition, act or event which with
               the giving of notice or the passage of time or both would
               constitute such a default or defined event of default.

          11.  The effective date of this Amendment shall be October 19, 2000.
<PAGE>

     Your acknowledgment of this Amendment shall constitute acceptance of the
foregoing terms and conditions. If not acknowledged on or before October 31,
2000, Bank agreements herein shall be null and void.

                                    Sincerely,

                                    WELLS FARGO BANK,
                                      NATIONAL ASSOCIATION


                                    By: /s/ Julius L. Young Jr.

                                    Title: Vice President


Acknowledged and accepted as of September 30, 2000:


GREATER BAY BANCORP

By: /s/ Steven C. Smith

Title: Executive Vice President, Chief Administrative Officer and Chief
Financial Officer

By: /s/ Kamrain F. Husain

Title: Senior Vice President, Finance & Risk Management
<PAGE>

                         REVOLVING LINE OF CREDIT NOTE


$40,000,000.00                                         San Francisco, California
                                                       October 19, 2000

     FOR VALUE RECEIVED, the undersigned GREATER BAY BANCORP ("Borrower")
promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank")
at its office at 420 Montgomery, San Francisco, California, or at such other
place as the holder hereof may designate, in lawful money of the United States
of America and in immediately available funds, the principal sum of Forty
Million Dollars ($40,000,000.00), or so much thereof as may be advanced and be
outstanding, with interest thereon, to be computed on each advance from the date
of its disbursement as set forth herein.

DEFINITIONS:

     As used herein, the following terms shall have the meanings set forth after
each, and any other term defined in this Note shall have the meaning set forth
at the place defined:

     (a) "Business Day" means any day except a Saturday, Sunday or any other day
on which commercial banks in California are authorized or required by law to
close.

     (b) "Fixed Rate Term" means, for each advance requested hereunder, a period
of three (3) months commencing initially on the Business Day on which such
advance is made, and automatically renewing for a period of 3 months at the end
of each such 3 month period (or renewed period), during which the outstanding
principal amount under this Note related to such advance bears interest
determined in relation to LIBOR as in effect on the first Business Day of the
applicable 3 month period; provided however, that no Fixed Rate Term shall
extend beyond the scheduled maturity date hereof.  If any Fixed Rate Term would
end on a day that is not a Business Day, then such Fixed Rate Term shall be
extended to the next succeeding Business Day.

     (c) "LIBOR" means the rate per annum (rounded upward, if necessary, to the
nearest whole 1/8 of 1%) and determined pursuant to the following formula:

     LIBOR =           Base LIBOR
                -----------------

                100% - LIBOR Reserve Percentage

"Base LIBOR" means the rate per annum for United States dollar deposits quoted
by Bank as the Inter-Bank Market Offered Rate, with the understanding that such
rate is quoted by Bank for the purpose of calculating effective rates of
interest for loans making reference thereto, on the first day of a Fixed Rate
Term for delivery of funds on said date for a period of time approximately equal
to the number of days in such Fixed Rate Term and in an amount approximately
equal to the principal amount to which such Fixed Rate Term applies.  Borrower
understands and agrees that Bank may base its quotation of the Inter-Bank Market
Offered Rate upon such offers or other market indicators of the Inter-Bank
Market as Bank in its discretion deems appropriate including, but not limited
to, the rate offered for U.S. dollar deposits on the London Inter-Bank Market.

  (ii) "LIBOR Reserve Percentage" means the reserve percentage prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
"Eurocurrency Liabilities" (as defined in Regulation D of the Federal Reserve
Board, as amended), adjusted by Bank for expected changes in such reserve
percentage during the applicable Fixed Rate Term.
<PAGE>

     (d) "Prime Rate" means at any time the rate of interest most recently
announced within Bank at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of Bank's base rates and serves as the
basis upon which effective rates of interest are calculated for those loans
making reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may designate.

INTEREST:

     (a) Interest.  The outstanding principal balance of this Note shall bear
         --------
interest (computed on the basis of a 360-day year, actual days elapsed) at a
fixed rate per annum determined by Bank to be two fifths percent (0.40%) above
LIBOR in effect on the first day of the applicable Fixed Rate Term. Bank is
hereby authorized to note the interest rate applicable to this Note during the
term hereof and any payments made thereon on Bank's books and records (either
manually or by electronic entry) and/or on any schedule attached to this Note,
which notations shall be prima facie evidence of the accuracy of the information
noted.

     (b)  Additional LIBOR Provisions.
          ---------------------------

     (i) If Bank at any time shall determine that for any reason adequate and
reasonable means do not exist for ascertaining LIBOR, then Bank shall promptly
give notice thereof to Borrower.  If such notice is given and until such notice
has been withdrawn by Bank, then the outstanding principal balance hereof,
subsequent to the end of the Fixed Rate Term applicable thereto, shall bear
interest determined in relation to the Prime Rate.

     (ii) If any law, treaty, rule, regulation or determination of a court or
governmental authority or any change therein or in the interpretation or
application thereof (each, a "Change in Law") shall make it unlawful for Bank to
maintain interest rates based on LIBOR, then any such unlawful LIBOR-based loans
then outstanding shall be converted, at Bank's option, so that interest on the
portion of the outstanding principal balance subject thereto is determined in
relation to the Prime Rate; provided however, that if any such Change in Law
shall permit any LIBOR-based loans to remain in effect until the expiration of
the Fixed Rate Term applicable thereto, then such permitted LIBOR-based loans
shall continue in effect until the expiration of such Fixed Rate Term. Upon the
occurrence of any of the foregoing events, Borrower shall pay to Bank
immediately upon demand such amounts as may be necessary to compensate Bank for
any fines, fees, charges, penalties or other costs incurred or payable by Bank
as a result thereof and which are attributable to any LIBOR based interest loans
made available to Borrower hereunder, and, absent manifest error, any reasonable
allocation made by Bank among its operations shall be conclusive and binding
upon Borrower.

  (iii)  If any Change in Law or compliance by Bank with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority shall:

     (A)  subject Bank to any tax, duty or other charge with respect to making
          any LIBOR based loans, or change the basis of taxation of payments to
          Bank of principal, interest, fees or any other amount payable
          hereunder (except for changes in the rate of tax on the overall net
          income of Bank); or

     (B)  impose, modify or hold applicable any reserve, special deposit,
          compulsory loan or similar requirement against assets held by,
          deposits or other liabilities in or for the account of, advances or
          loans by, or any other acquisition of funds by any office of Bank; or
<PAGE>

     (C)  impose on Bank any other condition;

and the result of any of the foregoing is to increase the cost to Bank of
making, renewing or maintaining any LIBOR based loans hereunder and/or to reduce
any amount receivable by Bank in connection therewith, then in any such case,
Borrower shall pay to Bank immediately upon demand such amounts as may be
necessary to compensate Bank for any additional costs incurred by Bank and/or
reductions in amounts received by Bank which are attributable to such LIBOR
based loans.  In determining which costs incurred by Bank and/or reductions in
amounts received by Bank are attributable to any LIBOR based loans made
available to Borrower hereunder, any reasonable allocation made by Bank among
its operations shall be conclusive and binding upon Borrower.

     (d) Payment of Interest.  Interest accrued on this Note shall be payable on
         -------------------
the last day of each month, commencing November 30, 2000 and on the maturity
date of this Note.

     (e) Default Interest.  From and after the maturity date of this Note, or
         ----------------
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to four percent (4%) above
the rate of interest from time to time applicable to this Note.

BORROWING AND REPAYMENT:

     (a) Borrowing and Repayment.  Borrower may from time to time during the
         -----------------------
term of this Note borrow, partially or wholly repay its outstanding borrowings,
and reborrow, subject to all of the limitations, terms and conditions of this
Note and of any document executed in connection with or governing this Note;
provided however, that the total outstanding borrowings under this Note shall
not at any time exceed the principal amount stated above.  The unpaid principal
balance of this obligation at any time shall be the total amounts advanced
hereunder by the holder hereof less the amount of principal payments made hereon
by or for Borrower, which balance may be endorsed hereon from time to time by
the holder.  The outstanding principal balance of this Note shall be due and
payable in full on October 30, 2001.

     (b) Advances.  Advances hereunder, to the total amount of the principal sum
         --------
stated above, may be made by the holder at the oral or written request of (i)
Kamran Husain, Steven Smith, Shawn Saunders or Mark Eschen, any one acting
alone, who are authorized to request advances and direct the disposition of any
advances until written notice of the revocation of such authority is received by
the holder at the office designated above, or (ii) any person, with respect to
advances deposited to the credit of any account of Borrower with the holder,
which advances, when so deposited, shall be conclusively presumed to have been
made to or for the benefit of Borrower regardless of the fact that persons other
than those authorized to request advances may have authority to draw against
such account.  The holder shall have no obligation to determine whether any
person requesting an advance is or has been authorized by Borrower.

     (c) Application of Payments.  Each payment made on this Note shall be
         -----------------------
credited first, to any interest then due and second, to the outstanding
principal balance hereof, with such payments applied to the oldest Fixed Rate
Term first.

PREPAYMENT:

     (a) Borrower may prepay principal on any portion of this Note at any time
and in any amount.  In consideration of Bank providing this prepayment option to
Borrower, or if this Note
<PAGE>

shall become due and payable at any time prior to the last day of the Fixed Rate
Term applicable thereto by acceleration or otherwise, Borrower shall pay to Bank
immediately upon demand a fee which is the sum of the discounted monthly
differences for each month from the month of prepayment through the month in
which such Fixed Rate Term matures, calculated as follows for each such month:

     (i)    Determine the amount of interest which would have accrued each month
            ---------
            on the amount prepaid at the interest rate applicable to such amount
            had it remained outstanding until the last day of the Fixed Rate
            Term applicable thereto.

     (ii)   Subtract from the amount determined in (i) above the amount of
            --------
            interest which would have accrued for the same month on the amount
            prepaid for the remaining term of such Fixed Rate Term at LIBOR in
            effect on the date of prepayment for new loans made for such term
            and in a principal amount equal to the amount prepaid.

     (iii)  If the result obtained in (ii) for any month is greater than zero,
            discount that difference by LIBOR used in (ii) above.

Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Borrower, therefore, agrees to pay the above-described prepayment
fee and agrees that said amount represents a reasonable estimate of the
prepayment costs, expenses and/or liabilities of Bank.  If Borrower fails to pay
any prepayment fee when due, the amount of such prepayment fee shall thereafter
bear interest until paid at a rate per annum two percent (2%) above the Prime
Rate in effect from time to time (computed on the basis of a 360-day year,
actual days elapsed).  Each change in the rate of interest on any such past due
prepayment fee shall become effective on the date each Prime Rate change is
announced within Bank.

EVENTS OF DEFAULT:


     The occurrence of any of the following shall constitute an "Event of
Default" under this Note:

          (a) The failure to pay, within 5 calendar days after the due date, any
          principal, interest, fees or other charges hereunder or under any
          contract, instrument or document executed in connection with this
          Note; provided however, that with respect to interest, fees or other
          charges, no Event of Default shall be deemed to have occurred if the
          same are paid later than the fifth day after the applicable due date
          but within 30 days after the applicable due date no more than two
          times during the term of this Note.

     (b)  The filing of a petition by or against Borrower under any provisions
of the Bankruptcy Reform Act, Title 11 of the United States Code, as amended or
recodified from time to time, or under any similar or other law relating to
bankruptcy, insolvency, reorganization or other relief for debtors (and, if
                                                                    ---
filed against Borrower, the proceeding in question is not dismissed within 60
days after its filing, provided further, that Bank shall not be required to make
advances during such 60 day period); the appointment of a receiver, trustee,
custodian or liquidator of or for any part of the assets or property of
Borrower; Borrower becomes insolvent, makes a general assignment for the benefit
of creditors or is generally not paying its debts as
<PAGE>

they become due; or any attachment or like levy on any property of Borrower with
a book value of $5,000,000.00 or more.

     (c)     The dissolution or liquidation of Borrower.

     (d)  Any default in the payment or performance of any obligation, or any
defined event of default, under any provisions of any contract, instrument or
document pursuant to which Borrower has incurred (i) any obligation for borrowed
money, (ii) any purchase obligation, or (iii) any other liability of any kind to
any person or entity, including the holder, and, in the cases of (ii) or (iii)
                                            ---
the obligation or other liability exceeds $5,000,000.00, and, in the cases of
                                                         ---
(i), (ii) or (iii), the creditor has taken action(s) with respect to such
default, which action may consist solely of the sending of a notice of default.

     (e)  Any financial statement provided by Borrower to Bank proves to be
incorrect, false or misleading in any material respect.

     (f)     Any violation or breach of any provision of, or any defined event
of default under, any addendum to this Note or any loan agreement, guaranty,
security agreement, deed of trust, mortgage or other document executed in
connection with or securing this Note, and, if such violation or breach is by
                                       ---
its nature susceptible of being cured, the same is not cured within 30 days
after the date Borrower first knew (or, using reasonable due diligence, should
have known) thereof.

MISCELLANEOUS:

     (a)     Remedies. Upon the occurrence of any Event of Default, the holder
             --------
of this Note, at the holder's option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Borrower shall pay to the holder immediately
upon demand the full amount of all payments, advances, charges, costs and
expenses, including reasonable attorneys' fees (to include outside counsel fees
and all allocated costs of the holder's in-house counsel), expended or incurred
by the holder in connection with the enforcement of the holder's rights and/or
the collection of any amounts which become due to the holder under this Note,
and the prosecution or defense of any action in any way related to this Note,
including without limitation, any action for declaratory relief, whether
incurred at the trial or appellate level, in an arbitration proceeding or
otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to
Borrower or any other person or entity.

     (b)     Governing Law.  This Note shall be governed by and construed in
             -------------
accordance with the laws of the State of California.
<PAGE>

     IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first written above.

GREATER BAY BANCORP

By: /s/ Steven C. Smith
Title: EVP, CFO & CAO

By: /s/ Kamran F. Husain
Title: SVP, Finance & Risk Management
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