Exhibit
4.16


 




 





 


GUARANTEE
AGREEMENT


 


Between


 


SILICON
VALLEY BANCSHARES

(as Guarantor)


 


 


and


 


 


WILMINGTON
TRUST COMPANY

(as Trustee)


 


 


dated
as of


 


October
30, 2003


 




 





 

















 


CROSS-REFERENCE
TABLE*


 


	
  Section of Trust Indenture Act of 1939 as

  amended

  	
   

  	
  Section of
  Guarantee Agreement

  
	
  310(a)

  	
   

  	
  4.1(a)

  
	
  310(b)

  	
   

  	
  4.1(c), 2.8

  
	
  310(c)

  	
   

  	
  Inapplicable

  
	
  311(a)

  	
   

  	
  2.2(b)

  
	
  311(b)

  	
   

  	
  2.2(b)

  
	
  311(c)

  	
   

  	
  Inapplicable

  
	
  312(a)

  	
   

  	
  2.2(a)

  
	
  312(b)

  	
   

  	
  2.2(b)

  
	
  313

  	
   

  	
  2.3

  
	
  314(a)

  	
   

  	
  2.4

  
	
  314(b)

  	
   

  	
  Inapplicable

  
	
  314(c)

  	
   

  	
  2.5

  
	
  314(d)

  	
   

  	
  Inapplicable

  
	
  314(e)

  	
   

  	
  1.1, 2.5, 3.2

  
	
  314(f)

  	
   

  	
  2.1, 3.2

  
	
  315(a)

  	
   

  	
  3.1(d)

  
	
  315(b)

  	
   

  	
  2.7

  
	
  315(c)

  	
   

  	
  3.1(c)

  
	
  315(d)

  	
   

  	
  3.1 (d)

  
	
  316(a)

  	
   

  	
  1.1, 2.6, 5.4

  
	
  316(b)

  	
   

  	
  5.3

  
	
  316(c)

  	
   

  	
  9.2

  
	
  317(a)

  	
   

  	
  Inapplicable

  
	
  317(b)

  	
   

  	
  Inapplicable

  
	
  318(a)

  	
   

  	
  2.1(b)

  
	
  318(b)

  	
   

  	
  2.1

  
	
  318(c)

  	
   

  	
  2.1(a)

  



 


 












* This Cross-Reference Table
does not constitute part of the Guarantee Agreement and shall not affect the
interpretation of any of its terms of provisions.


 

















 


GUARANTEE
AGREEMENT


 


This GUARANTEE AGREEMENT,
dated as of October 30, 2003, is executed and delivered by SILICON VALLEY
BANCSHARES, a Delaware corporation (the “Guarantor”) having its principal office at
3003 Tasman Drive, Santa Clara, California, 95054, and Wilmington Trust
Company, as trustee (the “Guarantee
Trustee”), for the benefit of the Holders from time to time of
the Preferred Securities (as defined herein) of SVB CAPITAL II, a Delaware
statutory trust (the “Trust”).


 


WHEREAS, pursuant to an
Amended and Restated Trust Agreement, dated as of October 30, 2003 (the “Trust Agreement”),
among the Guarantor, as Depositor, Wilmington Trust Company as Property
Trustee, Wilmington Trust Company, as Delaware Trustee, the Administrative
Trustees named therein and the Holders from time to time of undivided
beneficial interests in the assets of the Trust, the Trust issued $50,000,000
aggregate Liquidation Amount (as defined in the Trust Agreement) of its 7%
Cumulative Trust Preferred Securities, Liquidation Amount $25 per Trust
Preferred Security (the “Preferred
Securities”);


 


WHEREAS, the Preferred
Securities will be issued by the Trust and the proceeds thereof, together with
the proceeds from the issuance of the Trust’s Common Securities (as defined
below), will be used to purchase the Debentures (as defined in the Trust
Agreement) of the Guarantor which were deposited with Wilmington Trust Company,
as Property Trustee under the Trust Agreement, as trust assets;


 


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


 


NOW, THEREFORE, in
consideration of the purchase by each Holder of Preferred Securities, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor
executes and delivers this Guarantee Agreement and pursuant to Section 5.1
hereof extends the Guarantee for the benefit of the Holders from time to time
of the Preferred Securities.


 


ARTICLE I


 


DEFINITIONS


 


SECTION 1.1. Definitions.


 


As used in this Guarantee
Agreement, the terms set forth below shall, unless the context otherwise
requires, have the following meanings. 
Capitalized or otherwise defined terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Trust Agreement
and the Indenture (as defined herein), each as in effect on the date hereof.


 

















 


“Affiliate” of any
specified Person means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified
Person; provided, however, that an Affiliate of the Guarantor
shall not be deemed to be an Affiliate of the Trust.  For the purposes of this definition, “control” when used with respect to any specified Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms “controlling”
and “controlled” have meanings
correlative to the foregoing.


 


“Board of Directors”
means either the board of directors of the Guarantor or any committee of that
board duly authorized to act hereunder.


 


“Common Securities”
means the securities representing common undivided beneficial interests in the
assets of the Trust.


 


“Event of Default”
means a default by the Guarantor on any of its payment or other obligations
under this Guarantee Agreement; provided, however, that, except
with respect to a default in payment of any Guarantee Payments, the Guarantor
shall have received notice of default and shall not have cured such default
within 90 days after receipt of such notice.


 


“Guarantee “has the
meaning set forth in Section 5.1.


 


“Guarantee Payments”
means the following payments or distributions, without duplication, with
respect to the Preferred Securities, to the extent not paid or made by or on
behalf of the Trust:  (a) any accrued
and unpaid Distributions (as defined in the Trust Agreement) required to be
paid on the Preferred Securities, to the extent the Trust shall have funds on
hand available therefor at such time, (b) the applicable Redemption Price (as
defined in the Trust Agreement), to the extent the Trust shall have funds on
hand available therefor at such time, and (c) upon a voluntary or involuntary
termination, winding up or liquidation of the Trust, unless Debentures are
distributed to the Holders, the lesser of (i) the aggregate of the Liquidation
Distribution (as defined in the Trust Agreement) and (ii) the amount of assets
of the Trust remaining available for distribution to Holders of Preferred
Securities after satisfaction of liabilities to creditors of the Trust as
required by applicable law.


 


“Guarantee Trustee”
means Wilmington Trust Company, until a Successor Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of this
Guarantee Agreement, and thereafter means each such Successor Guarantee
Trustee.


 


“Holder” means any
holder, as registered on the books and records of the Trust, of any Preferred
Securities; provided, however, that in determining whether the
holders of the requisite percentage of Preferred Securities have given any
request, notice, consent or waiver hereunder, “Holder” shall not include the
Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.


 


“Indenture” means the
Junior Subordinated Indenture dated as of October 30, 2003, as supplemented and
amended between the Guarantor and Wilmington Trust Company, as trustee.


 


“List of Holders” has
the meaning specified in Section 2.2(a).


 


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“Majority in Liquidation Amount of
the Preferred Securities” means, subject to Section 316(a) of
the Trust Indenture Act, a vote by the Holder(s), voting separately as a class,
of more than 50% of the Liquidation Amount of all then outstanding Preferred
Securities issued by the Trust.


 


“Officers’ Certificate”
means, with respect to any Person, a certificate signed by the Chairman or a
Vice Chairman of the Board of Directors of such Person or the President, Chief
Executive Officer or a Vice President of such Person, and by the Chief
Financial Officer, the Secretary or an Assistant Secretary of such Person, and delivered
to the Guarantee Trustee.  Any Officers’
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:


 


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


 


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


 


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


 


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


 


“Other Guarantees”
means any guarantees similar to the Guarantee issued, from time to time, by the
Guarantor on behalf of holders of one or more series of Preferred Securities
issued by any SVB Trust (as defined in the Indenture) other than the Trust.


 


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


 


“Responsible Officer”
means, with respect to the Guarantee Trustee, any officer of the Corporate
Trust Department of the Guarantee Trustee and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer’s knowledge of and familiarity with the
particular subject.


 


“Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, as in effect from time to time.


 


“Successor Guarantee Trustee”
means a successor Guarantee Trustee possessing the qualifications to act as
Guarantee Trustee under Section 4.1.


 


“Trust Indenture Act”
means the Trust Indenture Act of 1939, as amended.


 


3

















 


ARTICLE II


 


TRUST INDENTURE ACT


 


SECTION 2.1. Trust Indenture Act; Application.


 


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


 


(b)      If and to the extent that
any provision of this Guarantee Agreement limits, qualifies or conflicts with
the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture
Act, such imposed duties shall control.


 


SECTION 2.2. List of Holders.


 


(a)       The Guarantor shall furnish
or cause to be furnished to the Guarantee Trustee (i) semiannually, on or
before January 15 and July 15 of each year, a list, in such form as the
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders (“List of
Holders”) as of a date not more than 15 days prior to the
delivery thereof, and (ii) at such other times as the Guarantee Trustee may
request in writing, within 30 days after the receipt by the Guarantor of any
such request, a List of Holders as of a date not more than 15 days prior to the
time such list is furnished, in each case to the extent such information is in
the possession or control of the Guarantor and is not identical to a previously
supplied list of Holders or has not otherwise been received by the Guarantee
Trustee in its capacity as such.  The
Guarantee Trustee shall preserve, in as current form as is reasonably
practicable, the names and addresses of the Holders contained in the most
recent List of Holders furnished to the Guarantee Trustee. The Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.


 


(b)      The Guarantee Trustee shall
comply with its obligations under Section 311(a), Section 311(b) and Section
312(b) of the Trust Indenture Act.


 


SECTION 2.3. Reports by the Guarantee Trustee.


 


Not later than March 31
of each year, commencing on the year beginning January l, 2004, the Guarantee
Trustee shall provide to the Holders 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 Guarantee Trustee shall also comply with the requirements of Section
313(d) of the Trust Indenture Act.


 


SECTION 2.4. Periodic Reports to the Guarantee Trustee.


 


The Guarantor shall
provide to the Guarantee Trustee, the Commission and the Holders such
documents, reports and information, if any, as required by Section 314(a) of
the Trust Indenture Act and the compliance certificate required by Section
314(a)(4) of the Trust Indenture Act, in the form, in the manner and at the
times required by Section 314(a) of the Trust Indenture Act.


 


4

















 


SECTION 2.5. Evidence of Compliance with Conditions Precedent.


 


The Guarantor shall
provide to the Guarantee Trustee, on an annual basis, such evidence of compliance
with such conditions precedent, if any, provided for in this Guarantee
Agreement 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. Events of Default; Waiver.


 


The Holders of a Majority
in Liquidation Amount of the Preferred Securities may, by vote, on behalf of
the Holders, 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 Guarantee Agreement, but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent therefrom.


 


SECTION 2.7. Event of Default; Notice.


 


(a)       The Guarantee Trustee
shall, within 90 days after the occurrence of a default which with notice or
the passage of time, or both, could become an Event of Default, transmit by
mail, first class postage prepaid, to the Holders, notices of all such defaults
known to the Guarantee Trustee, unless such defaults have been cured before the
giving of such notice, provided, that, except in the case of a
default in the payment of a Guarantee Payment, the Guarantee Trustee shall be
protected in withholding such notice if and so long as the Board of Directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders.


 


(b)      The Guarantee Trustee shall
not be deemed to have knowledge of any such default unless the Guarantee
Trustee shall have received written notice, or a Responsible Officer charged
with the administration of this Guarantee Agreement shall have obtained written
notice, of such default.


 


SECTION 2.8. Conflicting Interests.


 


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


 


ARTICLE III


 


POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE


 


SECTION 3.1. Powers and Duties of the Guarantee Trustee.


 


(a)       This Guarantee shall be
held by the Guarantee Trustee for the benefit of the Holders, and the Guarantee
Trustee shall not transfer this Guarantee to any Person except to a 


 


5

















 


Holder exercising his or her rights pursuant to
Section 5.4(d) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee.  The right, title and interest
of the Guarantee Trustee shall automatically vest in any Successor Guarantee
Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment
hereunder, and such vesting and cessation of title shall be effective whether
or not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.


 


(b)      If an Event of Default has
occurred and is continuing, the Guarantee Trustee shall enforce this Guarantee
for the benefit of the Holders.


 


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


 


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


 


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


 


(A)          the duties and
obligations of the Guarantee Trustee shall be determined solely by the express
provisions of this Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Guarantee Agreement; and


 


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


 


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


 


6

















 


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


 


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


 


SECTION 3.2. Certain Rights of Guarantee Trustee.


 


(a)       Subject to the provisions
of Section 3.1:


 


(i)            The Guarantee Trustee
may 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 reasonably believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.


 


(ii)           Any direction or act of
the Guarantor contemplated by this Guarantee Agreement shall be sufficiently
evidenced by an Officers’ Certificate unless otherwise prescribed herein.


 


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


 


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


 


(v)           The Guarantee Trustee
shall be under no obligation to exercise any of the rights or powers vested in
it by this Guarantee Agreement at the request or direction of any Holder,
unless such Holder shall have provided to the Guarantee Trustee such adequate
security and


 


7

















 


indemnity as would satisfy a reasonable person in the
position of the Guarantee Trustee, against the costs, expenses (including
attorneys’ fees and expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable advances as
may be requested by the Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(v) shall be taken to relieve the Guarantee Trustee, upon
the occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Guarantee Agreement.


 


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


 


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


 


(viii)        Whenever in the
administration of this Guarantee Agreement the Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy or right
or taking any other action hereunder, the Guarantee Trustee (A) may request
instructions from the Holders, (B) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and (C)
shall be protected in acting in accordance with such instructions.


 


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


 


SECTION 3.3. Indemnity.


 


The Guarantor agrees to
indemnify the Guarantee Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on the part of
the Guarantee Trustee, arising out of or in connection with the acceptance or
administration of this Guarantee Agreement, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.


 


8

















 


ARTICLE IV


 


GUARANTEE TRUSTEE


 


SECTION 4.1. Guarantee Trustee: Eligibility.


 


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


 


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


 


(ii)           be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000, and shall be a corporation meeting
the requirements of Section 310(a) of the Trust Indenture Act.  If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the or
for the of this Section and to supervising examining authority, then, purposes
4.1(a)(ii) 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.


 


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


 


(c)       If the Guarantee Trustee
has or shall acquire any “conflicting interest” within the meaning of Section
310(b) of the Trust Indenture Act, the Guarantee Trustee 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 the Guarantee
Trustee.


 


(a)       Subject to Section 4.2(b),
the Guarantee Trustee may be appointed or removed without cause at any time by
the Guarantor.


 


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


 


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


 


(d)      If no Successor Guarantee
Trustee shall have been appointed and accepted appointment as provided in this
Section 4.2 within 60 days after delivery to the Guarantor of an instrument of
resignation, the resigning Guarantee Trustee may petition, at the expense of
the Guarantor, any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee.


 


9

















 


Such court may thereupon,
after prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.


 


ARTICLE V


 


GUARANTEE


 


SECTION 5.1. Guarantee.


 


The Guarantor irrevocably
and unconditionally agrees to pay in full on a subordinated basis to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by or on behalf of the Trust), as and when due, regardless of any defense,
right of set-off or counterclaim which the Trust may have or assert other than
the defense of payment (the “Guarantee”).  The
Guarantee is a continuing guarantee, and the Guarantor fully, knowingly and
unconditionally waives any right the Guarantor may have to revoke the Guarantee
as to any future transactions 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 Trust to
pay such amounts to the Holders.


 


SECTION 5.2. Waiver of Notice and Demand.


 


The Guarantor hereby
waives notice of acceptance of the 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 Guarantee Trustee, Trust 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 Guarantee
Agreement 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 Trust of
any express or implied agreement, covenant, term or condition relating to the
Preferred Securities to be performed or observed by the Trust;


 


(b)      the extension of time for
the payment by the Trust of all or any portion of the Distributions (other than
an extension of time for payment of Distributions that results from the
extension of any interest payment period on the Debentures as provided in the
Indenture), Redemption Price, Liquidation Distribution or any other sums
payable under the terms of the Preferred Securities or the extension of time
for the performance of any other obligation under, arising out of, or in connection
with, the Preferred 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


 


10

















 


to the terms of the Preferred Securities, or any
action on the part of the Trust 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 Trust or any of the assets of the Trust;


 


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


 


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


 


(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 5.3 that the
obligations of the Guarantor hereunder shall be absolute and unconditional
under any and all circumstances.  There
shall be no obligation of the Holders to give notice to, or obtain the consent
of, the Guarantor with respect to the happening of any of the foregoing.  In addition to the foregoing provisions of
this Section 5.3 and Section 5.2, Guarantor waives all rights and defenses
arising out of an election of remedies by Guarantee Trustee or Holders, even
though that election of remedies has destroyed the Guarantor’s rights of
subrogation and reimbursement against the principal by operation of Section
580d of the California Code of Civil Procedure or otherwise.


 


SECTION 5.4. Rights of Holders.


 


The Guarantor expressly
acknowledges that: (a) this Guarantee will be deposited with the Guarantee
Trustee to be held for the benefit of the Holders; (b) the Guarantee Trustee
has the right to enforce this Guarantee on behalf of the Holders; (c) the
Holders of a Majority in Liquidation Amount of the Preferred Securities have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Guarantee Trustee in respect of this Guarantee
Agreement or exercising any trust or power conferred upon the Guarantee Trustee
under this Guarantee Agreement; and (d) any Holder may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Guarantee Agreement, without first instituting a legal proceeding against the
Guarantee Trustee, the Trust or any other Person.


 


SECTION 5.5. Guarantee of Payment.


 


This Guarantee creates a
guarantee of payment and not of collection. 
This Guarantee will not be discharged except by payment of the Guarantee
Payments in full (without duplication of amounts theretofore paid by the Trust)
or upon distribution of Debentures to Holders as provided in the Trust
Agreement.


 


SECTION 5.6. Subrogation.


 


The Guarantor shall be
subrogated to all (if any) rights of the Holders against the Trust in respect
of any amounts paid to the Holders by the Guarantor under this Guarantee
Agreement and shall have the right to waive payment by the Trust pursuant to
Section 5.1; provided, however, that


 


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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 Guarantee, if, at the
time of any such payment, any amounts are due and unpaid under this
Guarantee.  If any amount shall be paid
to the Guarantor in violation of the preceding sentence, the Guarantor agrees
to hold such amount in trust for the Holders and to pay over such amount to the
Holders.


 


SECTION 5.7. Independent Obligations.


 


The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Trust with respect to the Preferred Securities and that the Guarantor
shall be liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 5.3 hereof.


 


ARTICLE VI


 


COVENANTS AND SUBORDINATION


 


SECTION 6.1. Subordination.


 


The obligations of the
Guarantor under this Guarantee will constitute unsecured obligations of the
Guarantor and will rank subordinate and junior in right of payment to all
Senior Debt in the same manner as Debentures.


 


SECTION 6.2. Pari Passu Guarantees.


 


The obligations of the
Guarantor under this Guarantee shall rank pari passu with the obligations of
the Guarantor under all Other Guarantees.


 


ARTICLE VII


 


CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE


 


SECTION 7.1. Guarantor May Consolidate, Etc., Only on Certain
Terms.


 


The Guarantor shall not
consolidate with or merge into any other Person (in a transaction in which the
Guarantor is not the surviving corporation) or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, unless:


 


(a)           in case the Guarantor
shall consolidate with or merge into another Person or convey, transfer or
lease its properties and assets substantially as an entirety to any Person, the
Person formed by such consolidation or into which the Guarantor is merged or
the Person which acquires by conveyance or transfer, or which leases, the
properties and assets of the Guarantor substantially as an entirety shall be a corporation,
limited liability company, partnership, trust or other business entity
organized and existing under the laws of the United States of America or any
State or the District of Columbia, and shall expressly assume the Guarantor’s
obligations under this Guarantee;


 


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(b)           immediately after
giving effect thereto, no Event of Default, and no event which, after notice or
lapse of time, or both, would become an Event of Default, shall have happened
and be continuing;


 


(c)           such consolidation,
merger, conveyance, transfer or lease is permitted under the Trust Agreement
and the Indenture and does not give rise to any breach or violation of the
Trust Agreement or the Indenture; and


 


(d)           the Guarantor has delivered
to the Guarantee Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that such consolidation, merger, conveyance, transfer or lease and
assumption of the Guarantor’s obligations under this Guarantee Agreement comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with; and the Guarantee
Trustee, subject to Section 3.1 hereof, may rely upon such Officers’
Certificate and Opinion of Counsel as conclusive evidence that such transaction
complies with this Section 7.1.


 


SECTION 7.2. Successor Guarantor Substituted.


 


Upon any consolidation or
merger by the Guarantor with or into any other Person, or any conveyance,
transfer or lease by the Guarantor of its properties and assets substantially
as an entirety to any Person in accordance with Section 7.1, the successor
Person formed by such consolidation or into which the Guarantor is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Guarantor under this
Guarantee Agreement with the same effect as if such successor Person had been
named as the Guarantor herein; and in the event of any such conveyance,
transfer or lease the Guarantor shall be discharged from all obligations and
covenants under this Guarantee Agreement.


 


ARTICLE VIII


 


TERMINATION


 


SECTION 8.1.        Termination.


 


This Guarantee Agreement
shall terminate and be of no further force and effect upon the earliest of (a) full
payment of the applicable Redemption Price of all Preferred Securities, (b) the
distribution of Debentures to the Holders in exchange for all of the Preferred
Securities or (c) full payment of the amounts payable in accordance with the
Trust Agreement upon liquidation of the Trust. 
Notwithstanding the foregoing clauses (a) through (c), this Guarantee
Agreement will continue to be effective or will be reinstated if it has been
terminated pursuant to one of such clauses (a) through (c), as the case may be,
if at any time any Holder must restore payment of any sums paid with respect to
Preferred Securities or this Guarantee Agreement.


 


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ARTICLE IX


 


MISCELLANEOUS


 


SECTION 9.1. Successors and Assigns.


 


All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding.  Except in connection with
a consolidation, merger or sale involving the Guarantor that is permitted under
Article VII hereof and Article VIII of the Indenture, the Guarantor shall not
assign its obligations hereunder.


 


SECTION 9.2. Amendments.


 


Except with respect to
any changes which do not adversely affect the rights of the Holders in any
material respect (in which case no vote will be required), this Guarantee
Agreement may not be amended without the prior approval of the Holders of not
less than a Majority in Liquidation Amount of the Preferred Securities.  The provisions of Article VI of the Trust
Agreement concerning meetings of the Holders shall apply to the giving of such
approval.


 


SECTION 9.3. Notices.


 


Any notice, request or
other communication required or permitted to be given hereunder shall be in
writing, duly signed by the party giving such notice, and delivered, telecopied
or mailed by first class mail as follows:


 


(a)       if given to the Guarantor,
to the address set forth below or such other address, facsimile number or to
the attention of such other Person as the Guarantor may give notice to the
Holders:


 


Silicon Valley Bancshares


3003 Tasman Drive


Santa Clara, California
95054


Facsimile No.: (408)
496-2405


Attention: Chief
Financial Officer


 


(b)      if given to the Trust, in
care of the Guarantee Trustee, at the Trust’s (and the Guarantee Trustee’s)
address set forth below or such other address as the Guarantee Trustee on
behalf of the Trust may give notice to the Holders:


 


SVB Capital II


c/o Silicon Valley
Bancshares


3003 Tasman Drive


Santa Clara, California
95054


Facsimile No.: (408)
496-2405


Attention: Chief
Financial Officer


 


with a copy to:


 


Wilmington Trust Company


Rodney Square North


1100 North Market Street


Wilmington, Delaware
19890


 


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Facsimile No.: (302)
636-6071


Attention: Don MacKelean


 


(c)       if given to any Holder, at
the address set forth on the books and records of the Trust.


 


All notices hereunder
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 Guarantee is solely
for the benefit of the Holders and is not separately transferable from the
Preferred Securities.


 


SECTION 9.5. Interpretation.


 


In this Guarantee
Agreement, unless the context otherwise requires:


 


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


 


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


 


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


 


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


 


(e)       a term defined in the Trust
Indenture Act has the same meaning when used in this Guarantee Agreement unless
otherwise defined in this Guarantee Agreement or unless the context otherwise
requires;


 


(f)       a reference to the singular
includes the plural and vice versa; and


 


(g)      the masculine, feminine or
neuter genders used herein shall include the masculine, feminine and neuter
genders.


 


SECTION 9.6. Governing Law.


 


THIS
GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE


 


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STATE OF
CALIFORNIA WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.


 


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


 


	
   

  	
  Silicon Valley
  Bancshares

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth P. Wilcox

  	
   

  
	
   

  	
  Name: Kenneth P.
  Wilcox

  
	
   

  	
  Title:   President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Wilmington Trust
  Company,

  as Guarantee Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Denise M. Geran

  	
   

  
	
   

  	
  Name: Denise M.
  Geran

  
	
   

  	
  Title:   Vice
  President