EXHIBIT 4.7


 


____________________________________________________________________


GUARANTEE
AGREEMENT


Between


SILICON
VALLEY BANCSHARES


(as
Guarantor)


and


WILMINGTON
TRUST COMPANY


(as
Trustee)


dated
as of


________________, 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 ____________, 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 ____________, 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
$______________ aggregate Liquidation Amount (as defined in the Trust
Agreement) of its ____% 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 ____________, 2003, as supplemented
and amended between the Guarantor and Wilmington Trust Company, as trustee.


 


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


“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.


 


3

















 


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


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.


 


4

















 


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.


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.


 


5

















 


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 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


 


6

















 


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;


(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.


 


7

















 


(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
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.


 


8

















 


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.


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


9

















 


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.


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;


 


10

















 


(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 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.


 


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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 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.


 


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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, partnership or trust 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;


(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.


 


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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.


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


 


 


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(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


Facsimile
No.: (302) 636-6071


Attention:
Don MacKelcan


(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;


 


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(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 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 fast above written.


Silicon Valley Bancshares


By:                                                                                                


Name:


Title:


Wilmington Trust
Company


as Guarantee
Trustee


By:                                                                                                


Name:


Title: