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EXHIBIT 4.1  

      

      

      

SILICON VALLEY BANCSHARES  

 ZERO COUPON CONVERTIBLE SUBORDINATED NOTES DUE JUNE 15, 2008  

 INDENTURE  

 DATED AS OF MAY 20, 2003  

 WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,

AS TRUSTEE  

       

      

      

  

 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	Page

	ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE	 	1
	 	

SECTION 1.1.	
 	

DEFINITIONS	
 	

1
	 	SECTION 1.2.	 	OTHER DEFINITIONS	 	6
	 	SECTION 1.3.	 	TRUST INDENTURE ACT PROVISIONS	 	6
	 	SECTION 1.4.	 	RULES OF CONSTRUCTION	 	7
	

ARTICLE 2 THE SECURITIES	
 	

7
	 	

SECTION 2.1.	
 	

FORM AND DATING	
 	

7
	 	SECTION 2.2.	 	EXECUTION AND AUTHENTICATION	 	8
	 	SECTION 2.3.	 	REGISTRAR, PAYING AGENT AND CONVERSION AGENT	 	9
	 	SECTION 2.4.	 	PAYING AGENT TO HOLD MONEY IN TRUST	 	9
	 	SECTION 2.5.	 	SECURITYHOLDER LISTS	 	10
	 	SECTION 2.6.	 	TRANSFER AND EXCHANGE	 	10
	 	SECTION 2.7.	 	REPLACEMENT SECURITIES	 	11
	 	SECTION 2.8.	 	OUTSTANDING SECURITIES	 	11
	 	SECTION 2.9.	 	TREASURY SECURITIES	 	11
	 	SECTION 2.10.	 	TEMPORARY SECURITIES	 	12
	 	SECTION 2.11.	 	CANCELLATION	 	12
	 	SECTION 2.12.	 	LEGEND; ADDITIONAL TRANSFER AND EXCHANGE REQUIREMENTS	 	12
	 	SECTION 2.13.	 	CUSIP NUMBERS	 	14
	

ARTICLE 3 REDEMPTION	
 	

14
	 	

SECTION 3.1.	
 	

NO REDEMPTION BY THE COMPANY	
 	

14
	

ARTICLE 4 CONVERSION	
 	

15
	 	

SECTION 4.1.	
 	

CONVERSION PRIVILEGE	
 	

15
	 	SECTION 4.2.	 	CONVERSION PROCEDURE	 	17
	 	SECTION 4.3.	 	FRACTIONAL SHARES	 	19
	 	SECTION 4.4.	 	TAXES ON CONVERSION	 	19
	 	SECTION 4.5.	 	COMPANY TO PROVIDE STOCK	 	19
	 	SECTION 4.6.	 	ADJUSTMENT OF CONVERSION PRICE	 	20
	 	SECTION 4.7.	 	NO ADJUSTMENT	 	24
	 	SECTION 4.8.	 	ADJUSTMENT FOR TAX PURPOSES	 	25
	 	SECTION 4.9.	 	NOTICE OF ADJUSTMENT	 	25
	 	SECTION 4.10.	 	NOTICE OF CERTAIN TRANSACTIONS	 	25
	 	SECTION 4.11.	 	EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE ON CONVERSION PRIVILEGE	 	25
	 	SECTION 4.12.	 	TRUSTEE'S DISCLAIMER	 	26
	 	SECTION 4.13.	 	VOLUNTARY REDUCTION	 	26
	 	 	 	 	 

i

 

	

ARTICLE 5 SUBORDINATION	
 	

27
	 	

SECTION 5.1.	
 	

AGREEMENT OF SUBORDINATION	
 	

27
	 	SECTION 5.2.	 	PAYMENTS TO HOLDERS	 	27
	 	SECTION 5.3.	 	SUBROGATION OF SECURITIES	 	29
	 	SECTION 5.4.	 	AUTHORIZATION TO EFFECT SUBORDINATION	 	30
	 	SECTION 5.5.	 	NOTICE TO TRUSTEE	 	30
	 	SECTION 5.6.	 	TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS	 	30
	 	SECTION 5.7.	 	NO IMPAIRMENT OF SUBORDINATION	 	31
	 	SECTION 5.8.	 	CERTAIN CONVERSIONS DEEMED PAYMENT	 	31
	 	SECTION 5.9.	 	ARTICLE APPLICABLE TO PAYING AGENTS	 	31
	 	SECTION 5.10.	 	SENIOR INDEBTEDNESS ENTITLED TO RELY	 	31
	

ARTICLE 6 COVENANTS	
 	

32
	 	

SECTION 6.1.	
 	

PAYMENT OF SECURITIES	
 	

32
	 	SECTION 6.2.	 	SEC REPORTS	 	32
	 	SECTION 6.3.	 	COMPLIANCE CERTIFICATES	 	32
	 	SECTION 6.4.	 	FURTHER INSTRUMENTS AND ACTS	 	33
	 	SECTION 6.5.	 	MAINTENANCE OF CORPORATE EXISTENCE	 	33
	 	SECTION 6.6.	 	RULE 144A INFORMATION REQUIREMENT	 	33
	 	SECTION 6.7.	 	STAY, EXTENSION AND USURY LAWS	 	33
	 	SECTION 6.8.	 	PAYMENT OF ADDITIONAL INTEREST	 	33
	

ARTICLE 7 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE	
 	

34
	 	

SECTION 7.1.	
 	

COMPANY MAY CONSOLIDATE, ETC, ONLY ON CERTAIN TERMS	
 	

34
	 	SECTION 7.2.	 	SUCCESSOR SUBSTITUTED	 	34
	

ARTICLE 8 DEFAULT AND REMEDIES	
 	

35
	 	

SECTION 8.1.	
 	

EVENTS OF DEFAULT	
 	

35
	 	SECTION 8.2.	 	ACCELERATION	 	35
	 	SECTION 8.3.	 	OTHER REMEDIES	 	36
	 	SECTION 8.4.	 	WAIVER OF DEFAULTS AND EVENTS OF DEFAULT	 	36
	 	SECTION 8.5.	 	CONTROL BY MAJORITY	 	36
	 	SECTION 8.6.	 	LIMITATIONS ON SUITS	 	36
	 	SECTION 8.7.	 	RIGHTS OF HOLDERS TO RECEIVE PAYMENT AND TO CONVERT	 	37
	 	SECTION 8.8.	 	COLLECTION SUIT BY TRUSTEE	 	37
	 	SECTION 8.9.	 	TRUSTEE MAY FILE PROOFS OF CLAIM	 	37
	 	SECTION 8.10.	 	PRIORITIES	 	37
	 	SECTION 8.11.	 	UNDERTAKING FOR COSTS	 	38
	 	 	 	 	 

ii

 

	

ARTICLE 9 TRUSTEE	
 	

38
	 	

SECTION 9.1.	
 	

DUTIES OF TRUSTEE	
 	

38
	 	SECTION 9.2.	 	RIGHTS OF TRUSTEE	 	39
	 	SECTION 9.3.	 	INDIVIDUAL RIGHTS OF TRUSTEE	 	40
	 	SECTION 9.4.	 	TRUSTEE'S DISCLAIMER	 	40
	 	SECTION 9.5.	 	NOTICE OF DEFAULT OR EVENTS OF DEFAULT	 	40
	 	SECTION 9.6.	 	REPORTS BY TRUSTEE TO HOLDERS	 	40
	 	SECTION 9.7.	 	COMPENSATION AND INDEMNITY	 	40
	 	SECTION 9.8.	 	REPLACEMENT OF TRUSTEE	 	41
	 	SECTION 9.9.	 	SUCCESSOR TRUSTEE BY MERGER, ETC	 	41
	 	SECTION 9.10.	 	ELIGIBILITY; DISQUALIFICATION	 	41
	 	SECTION 9.11.	 	PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY	 	42
	

ARTICLE 10 SATISFACTION AND DISCHARGE OF INDENTURE	
 	

42
	 	

SECTION 10.1.	
 	

SATISFACTION AND DISCHARGE OF INDENTURE	
 	

42
	 	SECTION 10.2.	 	APPLICATION OF TRUST MONEY	 	42
	 	SECTION 10.3.	 	REPAYMENT TO COMPANY	 	42
	 	SECTION 10.4.	 	REINSTATEMENT	 	43
	

ARTICLE 11 AMENDMENTS, SUPPLEMENTS AND WAIVERS	
 	

43
	 	

SECTION 11.1.	
 	

WITHOUT CONSENT OF HOLDERS	
 	

43
	 	SECTION 11.2.	 	WITH CONSENT OF HOLDERS	 	43
	 	SECTION 11.3.	 	COMPLIANCE WITH TRUST INDENTURE ACT	 	44
	 	SECTION 11.4.	 	REVOCATION AND EFFECT OF CONSENTS	 	44
	 	SECTION 11.5.	 	NOTATION ON OR EXCHANGE OF SECURITIES	 	44
	 	SECTION 11.6.	 	TRUSTEE TO SIGN AMENDMENTS, ETC	 	44
	 	SECTION 11.7.	 	EFFECT OF SUPPLEMENTAL INDENTURES.	 	45
	 	 	 	 	 

iii

 

	

ARTICLE 12 MISCELLANEOUS	
 	

45
	 	

SECTION 12.1.	
 	

TRUST INDENTURE ACT CONTROLS	
 	

45
	 	SECTION 12.2.	 	NOTICES	 	45
	 	SECTION 12.3.	 	COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS	 	45
	 	SECTION 12.4.	 	CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT	 	46
	 	SECTION 12.5.	 	RECORD DATE FOR VOTE OR CONSENT OF SECURITYHOLDERS	 	46
	 	SECTION 12.6.	 	RULES BY TRUSTEE, PAYING AGENT, REGISTRAR AND CONVERSION AGENT	 	46
	 	SECTION 12.7.	 	LEGAL HOLIDAYS	 	46
	 	SECTION 12.8.	 	GOVERNING LAW	 	46
	 	SECTION 12.9.	 	NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS	 	47
	 	SECTION 12.10.	 	NO RECOURSE AGAINST OTHERS	 	47
	 	SECTION 12.11.	 	SUCCESSORS	 	47
	 	SECTION 12.12.	 	MULTIPLE COUNTERPARTS	 	47
	 	SECTION 12.13.	 	SEPARABILITY	 	47
	 	SECTION 12.14.	 	TABLE OF CONTENTS, HEADINGS, ETC	 	47
	

EXHIBIT A	
 	

FORM OF SECURITY	
 	

 

iv

 
 

CROSS-REFERENCE TABLE*    
    

	TIA SECTION
 
	 	 
	 	INDENTURE SECTION
	 
	Section	 	310(a)(1)	 	9.10	 
	 	 	(a)(2)	 	9.10	 
	 	 	(a)(3)	 	N.A.**	 
	 	 	(a)(4)	 	N.A.	 
	 	 	(a)(5)	 	9.10	 
	 	 	(b)	 	9.8; 9.10	 
	 	 	(c)	 	N.A.	 
	Section	 	311(a)	 	9.11	 
	 	 	(b)	 	9.11	 
	 	 	(c)	 	N.A.	 
	Section	 	312(a)	 	2.5	 
	 	 	(b)	 	12.3	 
	 	 	(c)	 	12.3	 
	Section	 	313(a)	 	9.6	 
	 	 	(b)(1)	 	N.A.	 
	 	 	(b)(2)	 	9.6	 
	 	 	(c)	 	9.6; 12.2	 
	 	 	(d)	 	9.6	 
	Section	 	314(a)	 	6.2; 6.3; 12.2	 
	 	 	(b)	 	N.A.	 
	 	 	(c)(1)	 	12.4(a	)
	 	 	(c)(2)	 	12.4(a	)
	 	 	(c)(3)	 	N.A.	 
	 	 	(d)	 	N.A.	 
	 	 	(e)	 	12.4(b	)
	 	 	(f)	 	N.A.	 
	Section	 	315(a)	 	9.1(b	)
	 	 	(b)	 	9.5; 12.2	 
	 	 	(c)	 	9.1(a	)
	 	 	(d)	 	9.1(c	)
	 	 	(e)	 	8.11	 
	Section	 	316(a)(last sentence)	 	2.9	 
	 	 	(a)(1)(A)	 	8.5	 
	 	 	(a)(1)(B)	 	8.4	 
	 	 	(a)(2)	 	N.A.	 
	 	 	(b)	 	8.7	 
	 	 	(c)	 	12.5	 
	Section	 	317(a)(1)	 	8.8	 
	 	 	(a)(2)	 	8.9	 
	 	 	(b)	 	2.4	 

	*
	This
Cross-Reference Table shall not, for any purpose, be deemed a part of this Indenture.

	**
	N.A.
means Not Applicable. 

  

        THIS INDENTURE dated as of May 20, 2003 is between Silicon Valley Bancshares, a corporation duly organized under the laws of the State of Delaware (the "Company"), and Wells Fargo
Bank Minnesota, National Association, a national banking association organized and existing under the laws of the United States, as Trustee (the "Trustee"). 

        In
consideration of the premises and the purchase of the Securities by the Holders thereof, both parties agree as follows for the benefit of the other and for the equal and ratable
benefit of the registered Holders of the Company's Zero Coupon Convertible Subordinated Notes due June 15, 2008. 

 
 

ARTICLE 1    
    
    DEFINITIONS AND INCORPORATION BY REFERENCE    
    

        SECTION 1.1.    DEFINITIONS.    

        "Additional
Interest" has the meaning specified in Section 5 of the Registration Rights Agreement. All references herein to interest accrued or payable as of any date shall
include any Additional Interest accrued or payable as of such date as provided in the Registration Rights Agreement. 

        "Additional
Interest Payment Date" means each June 15 and December 15 of each year, as provided in the Registration Rights Agreement. 

        "Affiliate"
means, with respect to any specified person, any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such
specified person. For the purposes of this definition, "control" when used with respect to any 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. 

        "Agent"
means any Registrar, Paying Agent or Conversion Agent. 

        "Applicable
Procedures" means, with respect to any transfer or exchange of beneficial ownership interests in a Global Security, the rules and procedures of the Depositary, in each case
to the extent applicable to such transfer or exchange. 

        "Board
of Directors" means either the board of directors of the Company or any committee of the Board of Directors authorized to act for it with respect to this Indenture. 

        "Business
Day" means each day that is not a Legal Holiday. 

        "Capital
Stock" or "capital stock" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in
(however designated) equity of such Person, but excluding any debt securities convertible into such equity. 

        "Cash"
or "cash" means such coin or currency of the United States as at any time of payment is legal tender for the payment of public and private debts. 

        "Certificated
Security" means a Security that is in substantially the form attached hereto as Exhibit A and that does not include the information or the schedule called for by
footnotes 1, 3 and 4 thereof. 

        "Common
Stock" means the common stock of the Company, $0.001 par value per share, as it exists on the date of this Indenture and any shares of any class or classes of capital stock of
the Company resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and which are not subject to redemption by the Company; provided,  however, that if at any time there
shall be more than one such resulting class, the shares of each such class then so issuable on conversion of
Securities shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications. 

        "Company"
means the party named as such in the first paragraph of this Indenture until a successor replaces it pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Company. 

1

 

        "Conversion
Rate" means the number of shares of Common Stock into which each Security is convertible, and shall equal the quotient obtained by dividing $1,000 by the then current
Conversion Price. 

        A
"Corporate Event" will be deemed to have occurred if any of the following occurs: (i) any "person" (as defined in this paragraph) or "group" (as defined in this paragraph)
becomes the "beneficial owner" (as defined in this paragraph), directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of shares of Voting Stock
of the Company entitling the person to exercise 50% or more of the total voting power of all outstanding Voting Stock of the Company or has the power, directly or indirectly, to elect a majority of
the members of the Company's board of directors, other than an acquisition by the Company, any of its Subsidiaries or any of its employee benefit plans; or (ii) the Company merges with or into
or consolidates with any Person, any Person consolidates with or merges with or into the Company, or the Company conveys, sells, assigns, transfers, leases or otherwise conveys all or substantially
all of the assets of the Company to another Person other than to one or more of the Company's wholly-owned subsidiaries, unless after such a transaction the Persons that "beneficially owned" (as
defined in this paragraph), directly or indirectly, shares of Voting Stock of the Company immediately prior to such transaction have the entitlement to exercise, directly or indirectly, voting power
with respect to shares of Voting Stock representing 50% or more of the total voting power of all outstanding Voting Stock entitled to vote generally in the election of directors of the continuing,
surviving or transferee Person or the direct or indirect Parent of such Person immediately after such transaction; or (iii) the holders of the Company's Capital Stock approve any plan or
proposal for the liquidation or dissolution of the Company, whether or not in compliance with the terms hereof; provided,  however, that a Corporate Event
will not be deemed to have occurred if either: (x) the Closing Price (determined in accordance with
Section 4.6(e) of this Indenture) of the Common Stock for any five Trading Days within the period of ten consecutive Trading Days ending immediately before the Corporate Event equals or exceeds
105% of the Conversion Price in effect on each of those five Trading Days; or (y) in the case of a merger or consolidation otherwise constituting a Corporate Event, all of the consideration,
excluding cash payments for fractional shares and cash payments made pursuant to dissenters' appraisal rights, in such merger or consolidation consists of shares of common stock, American Depository
Shares or other certificates representing common equity interests traded on a national securities exchange or quoted on the NNM, or will be so traded or quoted when issued or exchanged in connection
with such merger or consolidation, and as a result of such merger or consolidation the Securities become convertible solely into such common stock, American Depository Shares or other certificates
representing common equity interests. For the purpose of the definition of "Corporate Event," (i) "person" has the meaning given such term under Section 13(d) and Section 14(d) of
the Exchange Act or any successor provision to such provisions and includes any syndicate or group which would be deemed to be a "person" under Section 13(d)(3) and 14(d)(2) of the Exchange Act
or any successor provisions, and the term "group" includes any group acting for the purpose of acquiring, holding or disposing of securities within the meaning of Rule 13d-5(b)(1)
under the Exchange Act or any successor provision, and (ii) a "beneficial owner" shall be determined in accordance with Rule 13d-3 under the Exchange Act, as in effect on the
date of this Indenture, except that the number of shares of Voting Stock of the Company shall be deemed to include, in addition to all outstanding shares of Voting Stock of the Company and Unissued
Shares deemed to be held by the "person" (as such term is defined in this paragraph) or "group" (as such term is defined in this paragraph) or other Person with respect to which the Corporate Event
determination is being made, all Unissued Shares deemed to be held by all other Persons. The term "Unissued Shares" means shares of Voting Stock not outstanding that are subject to options, warrants,
rights to purchase or conversion privileges exercisable within 60 days of the date of determination of a Corporate Event. 

        "Corporate
Trust Office" means the principal office of the Trustee at which at any particular time its corporate trust business shall be administered which office at the date of the
execution of this Indenture is located at MAC N9303-110, Sixth and Marquette Avenue, Minneapolis, MN 55479, Attention: Michael T. Lechner (Silicon Valley Bancshares—Zero Coupon
Convertible Subordinated Notes due June 15, 2008) or at any other time at such other address as the Trustee may designate from time to time by notice to the Company. 

        "Default"
or "default" means, when used with respect to the Securities, any event which is or, after notice or passage of time or both, would be an Event of Default. 

        "Exchange
Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as in effect from time to time. 

2

 

        "Federal
Reserve" means the Board of Governors of the Federal Reserve System. 

        "Final
Maturity Date" means June 15, 2008. 

        "GAAP"
means generally accepted accounting principles in the United States of America as in effect as of the date of this Indenture, including those set forth in (1) the opinions
and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, (2) the statements and pronouncements of the Financial Accounting Standards
Board, (3) such other statements by such other entity as approved by a significant segment of the accounting profession and (4) the rules and regulations of the SEC governing the
inclusion of financial statements (including pro forma financial statements) in registration statements filed under the Securities Act and periodic reports required to be filed pursuant to
Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC. 

        "Global
Security" means a permanent Global Security that is in substantially the form attached hereto as Exhibit A and that
includes the information and schedule called for by footnotes 1, 3 and 4 thereof and which is deposited with the Depositary or its custodian and registered in the name of the Depositary or its
nominee. 

        "Holder"
or "Securityholder" means the person in whose name a Security is registered on the Primary Registrar's books. 

        "Indebtedness"
means, with respect to any Person, without duplication, (a) all indebtedness, obligations and other liabilities (contingent or otherwise) of such Person
(i) for borrowed money (including obligations of such Person in respect of overdrafts, foreign exchange contracts, currency exchange agreements, interest rate protection agreements, and any
loans or advances from banks, whether or not evidenced by notes or similar instruments) or (ii) evidenced by credit or loan agreements, bonds, debentures, repurchase agreements, notes or
similar instruments or agreements, (b) all reimbursement obligations and other liabilities (contingent or otherwise) of such Person with respect to letters of credit, bank guarantees or
bankers' acceptances, (c) all obligations and liabilities (contingent or otherwise) of such Person (i) in respect of leases of such Person required, in conformity with GAAP, to be
accounted for as capitalized lease obligations on the balance sheet of such Person (as determined by such Person), or (ii) under any lease or related document (including a purchase agreement,
conditional sale or other title retention agreement) in connection with the lease of real property or improvements thereon (or any personal property included as part of any such lease) which provides
that such Person is contractually obligated to purchase or cause a third party to purchase the leased
property or pay an agreed upon residual value of the leased property, including the obligation under such lease or related document to purchase or cause a third party to purchase such leased property
or pay an agreed upon residual value of the leased property to the lessor (whether or not such lease transaction is characterized as an operating lease or a capitalized lease in accordance with GAAP),
(d) all obligations (contingent or otherwise) of such Person with respect to any interest rate or other swap, cap, floor or collar agreement, hedge agreement, forward contract, or other similar
instrument or agreement or foreign currency hedge, exchange, purchase or similar instrument or agreement, (e) all direct or indirect guarantees or similar agreements by such Person in respect
of, and obligations or liabilities of such Person to purchase or otherwise acquire or otherwise assure a creditor against loss in respect of, indebtedness, obligations or liabilities of another Person
of the kinds described in clauses (a) through (d), and (f) any and all deferrals, renewals, extensions, refinancings and refundings of, or amendments, modifications or supplements to,
any indebtedness, obligation or liability of the kinds described in clauses (a) through (e). 

        "Indenture"
means this Indenture as amended or supplemented from time to time pursuant to the terms of this Indenture. 

        "Initial
Purchaser" means Credit Suisse First Boston LLC. 

        "Non-U.S.
Person" means a Person who is not a U.S. Person, as defined in Regulation S. 

        "Officer"
means the Chairman or any Co-Chairman of the Board, any Vice Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller, the Secretary or any Assistant Treasurer, Assistant Controller or Assistant Secretary of the Company. 

3

 

        "Officers'
Certificate" means a certificate signed by two Officers; provided, however,
that for purposes of Sections 4.11 and 6.3, "Officers' Certificate" means a certificate signed by the principal executive officer, principal financial officer or principal accounting officer of the
Company and by one other Officer. 

        "offshore
transaction" has the meaning given such term in Regulation S. 

        "Opinion
of Counsel" means a written opinion from legal counsel. The counsel may be an employee of or counsel to the Company or the Trustee. 

        "Parent"
means in respect of any Person, any corporation which controls, directly or indirectly (through, or in combination with, one or more Subsidiaries), more than 50% of the Voting
Stock of such Person. 

        "Person"
or "person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity. 

        "Principal"
or "principal" of a debt security, including the Securities, means the principal of the security. 

        "Record
Date" for Additional Interest, if any, payable on any Additional Interest Payment Date as provided in the Registration Rights Agreement, means June 1 or December 1
(whether or not a Business Day) next preceding such Additional Interest Payment Date. 

        "Registration
Rights Agreement" means the Registration Rights Agreement dated May 20, 2003, between the Company and the Initial Purchaser. 

        "Regulation
S" means Regulation S under the Securities Act or any successor for such Regulation. 

        "Representative"
means the (a) indenture trustee or other trustee, agent or representative for any Senior Indebtedness or (b) with respect to any Senior Indebtedness that
does not have any such trustee, agent or other representative, (i) in the case of such Senior Indebtedness issued pursuant to an agreement providing for voting arrangements as among the holders
or owners of such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting with the consent of the required persons necessary to bind such holders or owners of such Senior
Indebtedness and (ii) in the case of all other such Senior Indebtedness, the holder or owner of such Senior Indebtedness. 

        "Restricted
Global Security" means a Global Security that is a Restricted Security. 

        "Restricted
Security" means a Security required to bear the restricted legend set forth in the form of Security set forth in  Exhibit A of this Indenture. 

        "Rule 144"
means Rule 144 under the Securities Act or any successor to such Rule. 

        "Rule 144A"
means Rule 144A under the Securities Act or any successor to such Rule. 

        "SEC"
means the Securities and Exchange Commission. 

        "Securities"
means the Zero Coupon Convertible Subordinated Notes due June 15, 2008 or any of them (each, a "Security"), as amended or supplemented from time to time, that are
issued under this Indenture. 

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

        "Securities
Custodian" means the Trustee, as custodian with respect to the Securities in global form, or any successor thereto. 

        "Senior
Indebtedness" means the principal of, premium, if any, interest (including all interest accruing subsequent to the commencement of any bankruptcy or similar proceeding, whether
or not a claim for post-petition interest is allowed as a claim in any such proceeding) and rent payable on or in connection with, and all fees, costs, expenses and other amounts accrued
or due on or in connection with, Indebtedness of the Company, whether secured or unsecured, absolute or contingent, due or to become due, outstanding on the date of this Indenture or thereafter
created, incurred, assumed, guaranteed or in effect guaranteed by the Company (including all deferrals, renewals, extensions or refundings of, or amendments, modifications or supplements to, the
foregoing), unless in the case of any particular Indebtedness the instrument creating or evidencing the same or the assumption or guarantee thereof expressly provides that such Indebtedness shall not
be senior in right of payment to the Securities or expressly provides that such Indebtedness is "pari passu" or "junior" to the Securities. Notwithstanding the foregoing, the term Senior Indebtedness
shall not 

4

 

include
(i) the Company's obligations with respect to the Trust Preferred Securities, or (ii) the Securities. If any payment made to any holder of any Senior Indebtedness or its
Representative with respect to such Senior Indebtedness is rescinded or must otherwise be returned by such holder or Representative upon the insolvency, bankruptcy or reorganization of the Company or
otherwise, the reinstated Indebtedness of the Company arising as a result of such rescission or return shall constitute Senior Indebtedness effective as of the date of such rescission or return. 

        "Subsidiary"
means, in respect of any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital
Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, general partners or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one or more
Subsidiaries of such Person. 

        "TIA"
means the Trust Indenture Act of 1939, as amended, and the rules and regulations thereunder as in effect on the date of this Indenture, except as provided in Section 11.3,
and except to the extent any amendment to the Trust Indenture Act expressly provides for application of the Trust Indenture Act as in effect on another date. 

        "Trading
Day" means a day during which trading in securities generally occurs on the NNM (or, if the Common Stock is not quoted on the NNM, on the principal other market on which the
Common Stock is then traded), other than a day on which a material suspension of or limitation on trading is imposed that affects either the NNM (or, if applicable, such other market) in its entirety
or only the shares of Common Stock (by reason of movements in price exceeding limits permitted by the relevant market on which the shares are traded or otherwise) or on which the NNM (or, if
applicable, such other market) cannot clear the transfer of shares due to an event beyond the Company's control. 

        "Trustee"
means the party named as such in the first paragraph of this Indenture until a successor replaces it in accordance with the provisions of this Indenture, and thereafter means
the successor. 

        "Trust
Officer" means, with respect to the Trustee, any officer assigned to the Corporate Trust Office, and also, with respect to a particular matter, any other officer to whom such
matter is referred because of such officer's knowledge of and familiarity with the particular subject. 

        "Trust
Preferred Securities" means the 8.25% Cumulative Trust Preferred Securities of SVB Capital I, a statutory business trust formed under the laws of the State of Delaware. 

        "Unrestricted
Certificated Security" means a Certificated Security that is not a Restricted Security. 

        "Unrestricted
Global Security" means a Global Security that is not a Restricted Security. 

        "Vice
President" when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title
"vice president." 

        "Volume
Weighted Average Price" means, with respect to one share of Common Stock on any Trading Day, the volume weighted average prices as displayed under the heading "Bloomberg VWAP" on
Bloomberg Page SIVB <equity> AQR in respect of the period from 9:30 a.m. to 4:00 p.m. (New York City time) on that Trading Day (or if such volume weighted average price is not
available, the market value of one share of Common Stock on such Trading Day as the Company determines in good faith using a volume weighted method). 

        "Voting
Stock" of a Person means all classes of Capital Stock or other interests (including partnership interests) of such Person then outstanding and normally entitled (without regard
to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof. 

5

 

        SECTION 1.2.    OTHER DEFINITIONS.    

	Term
 
	 	Defined in Section
	 
	"Agent Members"	 	2.1	(b)
	"Bankruptcy Law"	 	8.1	 
	"Cash Settlement	 	4.2	(a)
	"Cash Settlement Averaging Period"	 	4.2	(b)
	"Closing Price"	 	4.6	(e)
	"Combined Settlement"	 	4.2	(a)
	"Company Order"	 	2.2	 
	"Conversion Agent"	 	2.3	 
	"Conversion Date"	 	4.2	 
	"Conversion Obligation"	 	4.2	(b)
	"Conversion Price"	 	4.6	 
	"Conversion Retraction Period"	 	4.2	(c)
	"Conversion Settlement Election Notice"	 	4.2	(d)
	"Conversion Value"	 	4.1	 
	"Current Market Price"	 	4.6	(e)
	"Custodian"	 	8.1	 
	"DTC"	 	2.1	 
	"Depositary"	 	2.1	 
	"Determination Date"	 	4.6	(d)
	"Distribution Notice"	 	4.1	(a)
	"Event of Default"	 	8.1	 
	"Expiration Date"	 	4.6	(d)
	"Expiration Time"	 	4.6	(d)
	"Legal Holiday"	 	12.7	 
	"Legend"	 	2.12	 
	"Merger Notice"	 	4.1	(a)
	"NNM"	 	4.6	(e)
	"Partial Cash Amount"	 	4.2	(b)
	"Paying Agent"	 	2.3	 
	"Primary Registrar"	 	2.3	 
	"Purchase Agreement"	 	2.1	 
	"Purchased Shares"	 	4.6	(d)
	"QIB"	 	2.1	 
	"Registrar"	 	2.3	 
	"Rights Plan"	 	4.6	(c)
	"Settlement Notice Period"	 	4.2	(c)
	"Share Settlement"	 	4.2	(a)
	"Trading Price"	 	4.1	 
	"Triggering Distribution"	 	4.6	(d)
	"Trigger Event"	 	4.6	(c)

        SECTION 1.3.    TRUST INDENTURE ACT PROVISIONS.    

        Whenever
this Indenture refers to a provision of the TIA, that provision is incorporated by reference in and made a part of this Indenture. The Indenture shall also include those
provisions of the TIA required to be included herein by the provisions of the Trust Indenture Reform Act of 1990. The following TIA terms used in this Indenture have the following meanings: 

        "indenture
securities" means the Securities; 

        "indenture
security holder" means a Securityholder; 

        "indenture
to be qualified" means this Indenture; 

        "indenture
trustee" or "institutional trustee" means the Trustee; and "obligor" on the indenture securities means the Company or any other obligor on the Securities. 

6

 

        All
other terms used in this Indenture that are defined in the TIA, defined by TIA reference to another statute or defined by any SEC rule and not otherwise defined herein have the
meanings assigned to them therein. 

        SECTION 1.4.    RULES OF CONSTRUCTION.    

        Unless
the context otherwise requires: 

        (A)  a
term has the meaning assigned to it; 

        (B)  an
accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; 

        (C)  words
in the singular include the plural, and words in the plural include the singular; 

        (D)  provisions
apply to successive events and transactions; 

        (E)  the
term "merger" includes a statutory share exchange and the term "merged" has a correlative meaning; 

        (F)  the
masculine gender includes the feminine and the neuter; 

        (G)  references
to agreements and other instruments include subsequent amendments thereto; and 

        (H)  "herein,"
"hereof" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. 

 
 

ARTICLE 2    
    
    THE SECURITIES    
    

        SECTION 2.1.    FORM AND DATING.    

        The
Securities and the Trustee's certificate of authentication shall be substantially in the respective forms set forth in  Exhibit A, which Exhibit is incorporated in and made part of this Indenture.
The Securities may have notations, legends or endorsements required
by law, stock exchange rule or usage. The Company shall provide any such notations, legends or endorsements to the Trustee in writing. Each Security shall be dated the date of its authentication. The
Securities are being offered and sold by the Company pursuant to a Purchase Agreement, dated May 15, 2003 (the "Purchase Agreement"), between the Company and the Initial Purchaser, in
transactions exempt from, or not subject to, the registration requirements of the Securities Act. 

        (a)    Restricted Global Securities.    All of the Securities are initially being offered and sold to qualified
institutional buyers as defined in Rule 144A (collectively, "QIBs" or individually, each a "QIB") in reliance on Rule 144A and to Non-U.S. Persons in offshore transactions
pursuant to Regulation S and shall be issued initially in the form of one or more Restricted Global Securities, which shall be deposited on behalf of the purchasers of the Securities
represented thereby with the Trustee, at its Corporate Trust Office, as custodian for the depositary, The Depository Trust Company ("DTC") (such depositary, or any successor thereto, being hereinafter
referred to as the "Depositary"), and registered in the name of its nominee, Cede & Co., duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Restricted Global Securities may from time to time be increased or decreased by adjustments made on the records of the Securities Custodian as hereinafter provided, subject in
each case to compliance with the Applicable Procedures. 

        (b)    Global Securities In General.    Each Global Security shall represent such of the outstanding Securities as
shall be specified therein and each shall provide that it shall represent the aggregate amount of outstanding Securities from time to time endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time be reduced or increased, as appropriate, to reflect replacements, exchanges, purchases or conversions of such Securities. Any adjustment of the
aggregate principal amount of a Global Security to reflect the amount of any increase or decrease in the amount of outstanding Securities represented thereby shall be made by the Trustee in accordance
with instructions given by the Holder thereof as required by Section 2.12 hereof and shall be made on the records of the Trustee and the Depositary. 

7

 

        Members
of, or participants in, the Depositary ("Agent Members") shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary or
under the Global Security, and the Depositary (including, for this purpose, its nominee) may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner
and Holder of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall (A) prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or (B) impair, as between the Depositary and its Agent Members, the operation
of customary practices governing the exercise of the rights of a Holder of any Security. 

        (c)    Book Entry Provisions.    The Company shall execute and the Trustee shall, in accordance with this
Section 2.1(c), authenticate and deliver initially one or more Global Securities that (i) shall be registered in the name of the Depositary or its nominee, (ii) shall be delivered
by the Trustee to the Depositary or pursuant to the Depositary's instructions and (iii) shall bear legends substantially to the following effect: 

"UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO SILICON VALLEY BANCSHARES (THE "COMPANY") OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY." 

        SECTION 2.2.    EXECUTION AND AUTHENTICATION.    

        An
Officer shall sign the Securities for the Company by manual or facsimile signature attested by the manual or facsimile signature of the Secretary or an Assistant Secretary of the
Company. Typographic and other minor errors or defects in any such facsimile signature shall not affect the validity or enforceability of any Security which has been authenticated and delivered by the
Trustee. 

        If
an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless. 

8

  

        A Security shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Security. The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture. 

        The
Trustee shall authenticate and make available for delivery Securities for original issue in the aggregate principal amount of up to $150,000,000 upon receipt of a written order or
orders of the Company signed by two Officers of the Company (a "Company Order"). The Company Order shall specify the amount of Securities to be authenticated, shall provide that all such Securities
will be represented by a Restricted Global Security and the date on which each original issue of Securities is to be authenticated. The aggregate principal amount of Securities outstanding at any time
may not exceed $150,000,000 except as provided in Section 2.7. 

        The
Trustee shall act as the initial authenticating agent. Thereafter, the Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. An
authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An
authenticating agent shall have the same rights as an Agent to deal with the Company or an Affiliate of the Company. 

        The
Securities shall be issuable only in registered form without coupons and only in denominations of $1,000 principal amount and any integral multiple thereof. 

        SECTION 2.3.    REGISTRAR, PAYING AGENT AND CONVERSION AGENT.    

        The
Company shall maintain one or more offices or agencies where Securities may be presented for registration of transfer or for exchange (each, a "Registrar"), one or more offices or
agencies where Securities may be presented for payment (each, a "Paying Agent"), one or more offices or agencies where Securities may be presented for conversion (each, a "Conversion Agent") and one
or more offices or agencies where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company will at all times maintain a Paying Agent,
Conversion Agent, Registrar and an office or agency where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served in the Borough of Manhattan, The City
of New York. One of the Registrars (the "Primary Registrar") shall keep a register of the Securities and of their transfer and exchange. 

        The
Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to
such Agent. The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture. If the Company fails to maintain a Registrar, Paying Agent, Conversion Agent or
agent for service of notices and demands in any place required by this Indenture, or fails to give the foregoing notice, the Trustee shall act as such. The Company or any Affiliate of the Company may
act as Paying Agent (except for the purposes of Section 6.1 and Article 10). 

        The
Company hereby initially designates the Trustee as Paying Agent, Registrar, Securities Custodian and Conversion Agent, and each of the Corporate Trust Office of the Trustee and the
office or agency of the Trustee in the Borough of Manhattan, The City of New York (which shall initially be located at 45 Broadway, 12th Floor, New York, NY 10002 (Silicon Valley
Bancshares—Zero Coupon Convertible Subordinated Notes due June 15, 2008)), one such office or agency of the Company for each of the aforesaid purposes. 

        SECTION 2.4.    PAYING AGENT TO HOLD MONEY IN TRUST.    

        Prior
to 11:00 a.m., New York City time, on each due date of the principal of, or Additional Interest, if any, on, any Securities, the Company shall deposit with a Paying Agent a
sum sufficient to pay such principal or Additional Interest, if any, so becoming due. Subject to Section 5.2, a Paying Agent shall hold in trust for the benefit of Securityholders or the
Trustee all money held by the Paying 

9

 

Agent
for the payment of principal of or Additional Interest, if any, on the Securities, and shall notify the Trustee of any default by the Company (or any other obligor on the Securities) in making
any such payment. If the Company or an Affiliate of the Company acts as Paying Agent, it shall, before 11:00 a.m., New York City time, on each due date of the principal of or Additional
Interest, if any, on any Securities, segregate the money and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee, and the
Trustee may at any time during the continuance of any default, upon written request to a Paying Agent, require such Paying Agent to pay forthwith to the Trustee all sums so held in trust by such
Paying Agent. Upon doing so, the Paying Agent (other than the Company) shall have no further liability for the money. 

        SECTION 2.5.    SECURITYHOLDER LISTS.    

        The
Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the
Primary Registrar, the Company shall furnish to the Trustee on or before any Additional Interest Payment Date and at such times as the Trustee may request in writing, a list in such form and as of
such date as the Trustee may reasonably require of the names and addresses of Securityholders, provided that in
connection with an Additional Interest Payment Date, such list shall be limited to those Securityholders to whom any Additional Interest shall be payable. 

        SECTION 2.6.    TRANSFER AND EXCHANGE.    

        (a)   Subject
to compliance with any applicable additional requirements contained in Section 2.12, when a Security is presented to a Registrar with a request to
register a transfer thereof or to exchange such Security for an equal principal amount of Securities of other authorized denominations, the Registrar shall register the transfer or make the exchange
as requested; provided, however, that every Security presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by an assignment form and, if applicable, a transfer certificate each in the form included in  Exhibit A, and in form satisfactory to the
Registrar duly executed by the Holder thereof or its attorney duly authorized in writing. To permit
registration of transfers and exchanges, upon surrender of any Security for registration of transfer or exchange at an office or agency maintained pursuant to Section 2.3, the Company shall
execute and the Trustee shall authenticate Securities of a like aggregate principal amount at the Registrar's request. Any exchange or transfer shall be without charge, except that the Company or the
Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto, and provided,  that
this sentence shall not apply to any exchange pursuant to Section 2.10, 2.12(a), 4.2 (last paragraph) or 11.5. 

        All
Securities issued upon any transfer or exchange of Securities shall be valid obligations of the Company, evidencing the same debt and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such transfer or exchange. 

        (b)   Any
Registrar appointed pursuant to Section 2.3 hereof shall provide to the Trustee such information as the Trustee may reasonably require in connection with the
delivery by such Registrar of Securities upon transfer or exchange of Securities. 

        (c)   Each
Holder of a Security agrees to indemnify the Company and the Trustee against any liability that may result from the transfer, exchange or assignment of such
Holder's Security in violation of any provision of this Indenture and/or applicable United States federal or state securities law. 

        The
Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with
respect to any transfer of any interest in any Security (including any transfers between or among Agent Members or other beneficial owners of interests in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when 

10

 

expressly
required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof. 

        SECTION 2.7.    REPLACEMENT SECURITIES.    

        If
any mutilated Security is surrendered to the Company, a Registrar or the Trustee, or the Company, a Registrar and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the Company, the applicable Registrar and the Trustee such security or indemnity as will be required by them to save each of them
harmless, then, in the absence of notice to the Company, such Registrar or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute, and upon its written
request the Trustee shall authenticate and deliver, in exchange for any such mutilated Security or in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, bearing a number not contemporaneously outstanding. 

        In
case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay
the amounts due with respect to such Security. 

        Upon
the issuance of any new Securities under this Section 2.7, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other reasonable expenses (including the reasonable fees and expenses of the Trustee or the Registrar) in connection therewith. 

        Every
new Security issued pursuant to this Section 2.7 in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation
of the Company, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder. 

        The
provisions of this Section 2.7 are (to the extent lawful) exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities. 

        SECTION 2.8.    OUTSTANDING SECURITIES.    

        Securities
outstanding at any time are all Securities authenticated by the Trustee, except for those canceled by it, those converted pursuant to Article 4, those delivered to it
for cancellation or surrendered for transfer or exchange and those described in this Section 2.8 as not outstanding. 

        If
a Security is replaced pursuant to Section 2.7, it ceases to be outstanding unless the Company receives proof satisfactory to it that the replaced Security is held by a bona
fide purchaser. 

        If
a Paying Agent (other than the Company or an Affiliate of the Company) holds on the Final Maturity Date money sufficient to pay the principal of (including premium, if any) and
Additional Interest, if any, on Securities (or portions thereof) payable on that date, then on and after the Final Maturity Date, such Securities (or portions thereof, as the case may be) shall cease
to be outstanding and Additional Interest, if any, on them shall cease to accrue. 

        Subject
to the restrictions contained in Section 2.9, a Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security. 

        SECTION 2.9.    TREASURY SECURITIES.    

        In
determining whether the Holders of the required principal amount of Securities have concurred in any notice, direction, waiver or consent, Securities owned by the Company or any other
obligor on the Securities or by any Affiliate of the Company or of such other obligor shall be disregarded, except 

11

 

that,
for purposes of determining whether the Trustee shall be protected in relying on any such notice, direction, waiver or consent, only Securities which a Trust Officer of the Trustee actually
knows are so owned shall be so disregarded. Securities so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to the Securities and that the pledgee is not the Company or any other obligor on the Securities or any Affiliate of the Company or of such other obligor. 

        SECTION 2.10.    TEMPORARY SECURITIES.    

        Until
definitive Securities are ready for delivery, the Company may prepare and execute, and, upon receipt of a Company Order, the Trustee shall authenticate and deliver, temporary
Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company with the consent of the Trustee considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate and deliver definitive Securities in exchange for temporary Securities. 

        SECTION 2.11.    CANCELLATION.    

        The
Company at any time may deliver Securities to the Trustee for cancellation. The Registrar, the Paying Agent and the Conversion Agent shall forward to the Trustee or its agent any
Securities surrendered to them for transfer, exchange, payment or conversion. The Trustee and no one else shall promptly cancel, in accordance with its standard procedures, all Securities surrendered
for transfer, exchange, payment, conversion or cancellation and shall deliver, in accordance with its standard procedures, the canceled Securities to the Company. All Securities which are purchased or
otherwise acquired by the Company or any of its Subsidiaries prior to the Final Maturity Date shall be delivered to the Trustee for cancellation, and the Company may not hold or resell such Securities
or issue any new Securities to replace any such Securities or any Securities that any Holder has converted pursuant to Article 4. 

        SECTION 2.12.    LEGEND; ADDITIONAL TRANSFER AND EXCHANGE REQUIREMENTS.    

        (a)   If
Securities are issued upon the transfer, exchange or replacement of Securities subject to restrictions on transfer and bearing the legends set forth on the forms of
Securities attached hereto as Exhibit A (collectively, the "Legend"), or if a request is made to remove the Legend on a Security, the Securities
so issued shall bear the Legend, or the Legend shall not be removed, as the case may be, unless there is delivered to the Company and the Registrar such satisfactory evidence, which shall include an
opinion of counsel if requested by the Company or such Registrar, as may be reasonably required by the Company and the Registrar, that neither the Legend nor the restrictions on transfer set forth
therein are required to ensure that transfers thereof comply with the provisions of Rule 144A, Rule 144 or Regulation S or that such Securities are not "restricted" within the
meaning of Rule 144 under the Securities Act; provided that no such evidence need be supplied in connection with the sale of such Security
pursuant to a registration statement that is effective at the time of such sale. Upon (i) provision of such satisfactory evidence if requested, or (ii) notification by the Company to the
Trustee and Registrar of the sale of such Security pursuant to a registration statement that is effective at the time of such sale, the Trustee, at the written direction of the Company, shall
authenticate and deliver a Security that does not bear the Legend. If the Legend is removed from the face of a Security and the Security is subsequently held by an Affiliate of the Company, the Legend
shall be reinstated. 

        (b)   A
Global Security may not be transferred, in whole or in part, to any Person other than the Depositary or a nominee or any successor thereof, and no such transfer to any
such other Person may be registered; provided that the foregoing shall not prohibit any transfer of a Security that is issued in exchange for a Global
Security but is not itself a Global Security. No transfer of a Security to any Person shall be effective under this Indenture or the Securities unless and until such Security has been registered in
the name of such Person. Notwithstanding any other provisions of this Indenture or the 

12

 

Securities,
transfers of a Global Security, in whole or in part, shall be made only in accordance with this Section 2.12. 

        (c)   Subject
to the succeeding paragraph, every Security shall be subject to the restrictions on transfer provided in the Legend other than a Restricted Global Security.
Whenever any Restricted Security other than a Restricted Global Security is presented or surrendered for registration of transfer or for exchange for a Security registered in a name other than that of
the Holder, such Security must be accompanied by a certificate in substantially the form set forth in Exhibit A, dated the date of such surrender
and signed by the Holder of such Security, as to compliance with such restrictions on transfer. The Registrar shall not be required to accept for such registration of transfer or exchange any Security
not so accompanied by a properly completed certificate. 

        (d)   The
restrictions imposed by the Legend upon the transferability of any Security shall cease and terminate when such Security has been sold pursuant to an effective
registration statement under the Securities Act or transferred in compliance with Rule 144 under the Securities Act (or any successor provision thereto) or, if earlier, upon the expiration of
the holding period applicable to sales thereof under Rule 144(k) under the Securities Act (or any successor provision). Any Security as to which such restrictions on transfer shall have expired
in accordance with their terms or shall have terminated may, upon a surrender of such Security for exchange to the Registrar in accordance with the provisions of this Section 2.12 (accompanied,
in the event that such restrictions on transfer have terminated by reason of a transfer in compliance with Rule 144 or any successor provision, by, if requested by the Company or the Registrar,
an opinion of counsel in form reasonably acceptable to the Company and addressed to the Company, to the effect that the transfer of such Security has been made in compliance with Rule 144 or
such successor provision), be exchanged for a new Security, of like tenor and aggregate principal amount, which shall not bear the restrictive Legend. The Company shall inform the Trustee of the
effective date of any registration statement registering the Securities under the Securities Act. The Trustee shall not be liable for any action taken or omitted to be taken by it in good faith in
accordance with the aforementioned opinion of counsel or registration statement. 

        (e)   As
used in the preceding two paragraphs of this Section 2.12, the term "transfer" encompasses any sale, pledge, transfer, hypothecation or other disposition of
any Security. 

        (f)    The
provisions of clauses (i), (ii), (iii), (iv) and (v) below shall apply only to Global Securities: 

        (i)    Notwithstanding
any other provisions of this Indenture or the Securities, a Global Security shall not be exchanged in whole or in part for a Security registered in the
name of any Person other than the Depositary or one or more nominees thereof, provided that a Global Security may be exchanged for Securities registered
in the names of any person designated by the Depositary in the event that (A) the Depositary has notified the Company that it is unwilling or unable to continue as Depositary for such Global
Security or such Depositary has ceased to be a "clearing agency" registered under the Exchange Act, and a successor Depositary is not appointed by the Company within 90 days, (B) the
Company has provided the Depositary with written notice that it has decided to discontinue use of the system of book-entry transfer through the Depositary or any successor Depositary or
(C) an Event of Default has occurred and is continuing with respect to the Securities. Any Global Security exchanged pursuant to clauses (A) or (B) above shall be so exchanged in
whole and not in part, and any Global Security exchanged pursuant to clause (C) above may be exchanged in whole or from time to time in part as directed by the Depositary. Any Security issued
in exchange for a Global Security or any portion thereof shall be a Global Security; provided that any such Security so issued that is registered in the
name of a Person other than the Depositary or a nominee thereof shall not be a Global Security. 

        (ii)   Securities
issued in exchange for a Global Security or any portion thereof shall be issued in definitive, fully registered form, shall have an aggregate principal
amount equal to that of such Global Security or portion thereof to be so exchanged, shall be registered in such names and be in 

13

 

such
authorized denominations as the Depositary shall designate and shall bear the applicable legends provided for herein. Any Global Security to be exchanged in whole shall be surrendered by the
Depositary to the Trustee, as Registrar. With regard to any Global Security to be exchanged in part, either such Global Security shall be so surrendered for exchange or, if the Trustee is acting as
custodian for the Depositary or its nominee with respect to such Global Security, the principal amount thereof shall be reduced, by an amount equal to the portion thereof to be so exchanged, by means
of an appropriate adjustment made on the records of the Trustee. Upon any such surrender or adjustment, the Trustee shall authenticate and deliver the Security issuable on such exchange to or upon the
order of the Depositary or an authorized representative thereof. 

        (iii)  Subject
to the provisions of clause (v) below, the registered Holder may grant proxies and otherwise authorize any Person, including Agent Members and persons
that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities. 

        (iv)  In
the event of the occurrence of any of the events specified in clause (i) above, the Company will promptly make available to the Trustee a reasonable supply of
Certificated Securities in definitive, fully registered form. 

        (v)   Neither
Agent Members nor any other Persons on whose behalf Agent Members may act shall have any rights under this Indenture with respect to any Global Security
registered in the name of the Depositary or any nominee thereof, or under any such Global Security, and the Depositary or such
nominee, as the case may be, may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and holder of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or such nominee, as the case may be, or impair, as between the Depositary, its Agent Members and any other Person on whose behalf an Agent Member may
act, the operation of customary practices of such Persons governing the exercise of the rights of a holder of any Security. 

        SECTION 2.13.    CUSIP NUMBERS.    

        The
Company in issuing the Securities may use one or more "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of purchase as a
convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a purchase and that reliance may be placed only on the other identification numbers printed on the Securities, and any such purchase shall not be
affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the "CUSIP" numbers. 

 
 

ARTICLE 3    
    
    REDEMPTION    
    

        SECTION 3.1.    NO REDEMPTION BY THE COMPANY.    

        The
Securities may not be redeemed by the Company at any time prior to the Final Maturity Date. 

        No
sinking fund is provided for the Securities. 

14

 

 
 

ARTICLE 4    
    
    CONVERSION    
    

        SECTION 4.1.    CONVERSION PRIVILEGE.    

        (a)   Subject
to the further provisions of this Article 4 (including, without limitation, the provisions of Section 4.2(b)) and paragraph 5 of the
Securities, a Holder of a Security may convert the principal amount of such Security (or any portion thereof equal to $1,000 or any integral multiple of $1,000 in excess thereof) into Common Stock, at
the Conversion Price then in effect, if: 

        (1)   at
any time on or before June 15, 2007, the Closing Price of the Common Stock for the last Trading Day of the immediately preceding fiscal quarter of the Company
was 110% or more of the then current Conversion Price on the Securities; 

        (2)   at
any time after June 15, 2007 and prior to the Final Maturity Date, the Closing Price of the Common Stock on the immediately preceding Trading Day was 110% or
more of the then current Conversion Price on the Securities; 

        (3)   the
Company distributes to all or substantially all holders of Common Stock rights or warrants entitling them to purchase Common Stock at less than the Closing Price of
the Common Stock on the last Trading Day preceding the declaration for such distribution; 

        (4)   the
Company distributes to all or substantially all holders of Common Stock cash or other assets, debt securities or rights or warrants to purchase the Company's
securities, which distribution has a per share value as determined by the Board of Directors exceeding 10% of the Closing Price of the Common Stock on the last Trading Day preceding the declaration
for such distribution; or 

        (5)   the
Company becomes a party to a consolidation, merger or sale of all or substantially all of the Company's assets or a Corporate Event occurs, in each case, pursuant to
which the Common Stock would be converted into cash, stock or other property unless, in the case of a consolidation or merger, all of the consideration, excluding cash payments for fractional shares
and cash payments made pursuant to dissenters' appraisal rights, in such merger or consolidation consists of shares of common
stock, American Depository Shares or other certificates representing common equity interests traded on a United States national securities exchange or quoted on the NNM, or will be so traded or quoted
when issued or exchanged in connection with such merger or consolidation, and as a result of such merger or consolidation the Securities become convertible solely into such common stock, American
Depository Shares or other certificates representing common equity interests. 

In
the case of a distribution contemplated by clauses (3) and (4) of this Section 4.1(a), the Company will notify Holders at least 20 days prior to the
ex-dividend date for such distribution (the "Distribution Notice"). Once the Company has given the Distribution Notice, Holders may surrender their Securities for conversion at any time
until the earlier of the close of business on the Business Day prior to the ex-dividend date or the Company's announcement that such distribution will not take place. Notwithstanding the
foregoing, in the event of a distribution contemplated by clauses (3) and (4) of this Section 4.1(a), Holders may not convert the Securities if the Holders may participate in such
distribution without converting their Securities. In the event of a consolidation, merger, asset sale or Corporate Event contemplated by clause (5) of this Section 4.1(a), the Company
will notify Holders at least 20 days prior to the anticipated closing date of such transaction (the "Merger Notice"). Once the Company has given the Merger Notice, the Holders may, in the event
of such consolidation, merger, asset sale or Corporate Event, and subject to Section 4.2(b) hereof, surrender Securities for conversion at any time from and after the date which is
15 days prior to the anticipated closing date of such transaction until the date which is 15 days after the actual closing date of such transaction. 

15

 

        (b)   Subject
to the further provisions of this Article 4 (including, without limitation, the provisions of Section 4.2(b)) and paragraph 5 of the
Securities, a Holder of a Security may also convert the principal amount of such Security (or any portion thereof equal to $1,000 or any integral multiple of $1,000 in excess thereof) into Common
Stock, at the Conversion Price then in effect: 

        (1)   at
any time prior to June 15, 2006 after any five (5) consecutive Trading Day period in which the average Trading Prices for the Securities for such five
(5) Trading Day period was less than 103% of the average Conversion Value for the Securities during such period; and 

        (2)   at
any time on or after June 15, 2006 and prior to the Final Maturity Date, after any five (5) consecutive Trading Day period in which the average Trading
Prices for the Securities for such five (5) Trading Day period was less than 97% of the average Conversion Value for the Securities during such period,  provided, however, a Holder may not convert a Security on or after June 15, 2006 pursuant to this
clause (2) if, at the time of the calculation, the Closing Price of shares of Common Stock is between the then current Conversion Price of the Securities and 110% of the then current Conversion
Price of the Securities. 

        Upon
the occurrence of the circumstances described in either clause (1) or (2) of this Section 4.1(b), a Holder may surrender Securities for conversion at any time
beginning on the date on which the Securities become convertible as a result of such occurrence through and including the close of business on the later of (x) ten (10) Trading Days
after the Securities become convertible as a result of such occurrence and (y) the Business Day prior to the first Trading Day on which the average Conversion Value for the Securities for a
five (5) consecutive Trading Day period exceeds the 103% or 97% Conversion Value thresholds, as the case may be. 

        The
"Conversion Value" for the Securities is equal to the product of (i) the Closing Price of the Common Stock on a given day and (ii) the then current Conversion Rate. 

        The
"Trading Price" of the Securities on any Trading Day means the average of the secondary market bid quotations per Security obtained by the Conversion Agent for $2,500,000 principal
amount of the Securities at approximately 3:30 p.m., New York City time, on such Trading Day from three independent nationally recognized securities dealers the Company selects;  provided that if at
least three such bids cannot reasonably be obtained by the Conversion Agent, but two such bids can be obtained, then the average of
the two bids shall be used, and if only one such bid can reasonably be obtained by the Conversion Agent, then only one bid shall be used. If the Conversion Agent cannot reasonably obtain at least one
bid for $2,500,000 principal amount of the Securities from a nationally recognized securities dealer or in the Company's reasonable judgment, the bid quotations are not indicative of the secondary
market value of the Securities, then the Trading Price of the Securities will be deemed to be less than 97% of the Conversion Value for the Securities on such Trading Day. The Conversion Agent shall
have no obligation to determine the Trading Price of the Securities unless the Company has requested such determination; and the Company shall have no obligation to make such request unless the
Holders provide the Company with reasonable evidence that the Trading Price of the Securities would be less than 97% of the Conversion Value; at which time, the Company shall instruct the Conversion
Agent to determine the Trading Price of the Securities beginning on the next Trading Day and on each successive Trading Day until the Trading Price is greater than or equal to 97% of the Conversion
Value. 

        (c)   Provisions
of this Indenture that apply to conversion of all of a Security also apply to conversion of a portion of a Security. 

        A
Holder of Securities is not entitled to any rights of a holder of Common Stock until such Holder has converted its Securities to Common Stock, and only to the extent such Securities
are deemed to have been converted into Common Stock pursuant to this Article 4. 

16

 

        SECTION 4.2.    CONVERSION PROCEDURE.    

        (a)   To
convert a Security, a Holder must (i) complete and manually sign the conversion notice on the back of the Security and deliver such notice to a Conversion
Agent, (ii) surrender the Security to a Conversion Agent, (iii) furnish appropriate endorsements and transfer documents if required by a Registrar or a Conversion Agent, and
(iv) pay any transfer or similar tax, if required. The date on which the Holder satisfies all such requirements is the "Conversion Date." 

        (b)   As
soon as practicable after the Conversion Date, the Company shall satisfy all of its obligations ("Conversion Obligations") upon conversion of the Securities by
delivering to the Holder, at the Company's option and subject to the Company having received prior approval of the Federal Reserve if then required under applicable capital regulations, guidelines or
policies, either shares of Common Stock, cash or a combination of cash (such cash amount not to be less than the principal amount of the Securities converted) and shares of Common Stock, in the
following manner: 

        (1)   If
the Company elects to satisfy the entire Conversion Obligation in shares of Common Stock ("Share Settlement"), then the Company will deliver to the Holder shares of
Common Stock equal to the quotient of (A) the aggregate principal amount of Securities to be converted by the Holder divided by (B) the then applicable Conversion Price; 

        (2)   If
the Company elects to satisfy the entire Conversion Obligation in cash ("Cash Settlement"), then the Company will deliver to the Holder cash in an amount equal to the
product of (A) a number equal to the aggregate principal amount of Securities to be converted by such Holder divided by the then applicable Conversion Price, and (B) the arithmetic mean
of the Volume Weighted Average Prices of the Common Stock on each Trading Day during the applicable cash settlement averaging period as provided below (the "Cash Settlement Averaging Period"); or 

        (3)   If
the Company elects to satisfy a portion of the Conversion Obligation in cash (the "Partial Cash Amount") and a portion in shares of Common Stock (together with the
Partial Cash Amount, a "Combined Settlement"), then the Company will deliver to the Holder such Partial Cash Amount plus a number of shares equal to (A) the cash settlement amount as set forth
in clause (2) above minus such Partial Cash Amount divided by (B) the arithmetic mean of the Volume Weighted Average Prices of the Common Stock on each Trading Day during the applicable
Cash Settlement Averaging Period as provided below. Under no circumstance shall the Partial Cash Amount paid by the Company be less than the principal amount of the Securities converted by the Holder. 

        (c)   If
the Company receives the conversion notice from a Holder on or prior to the day that is thirty (30) days prior to the Final Maturity Date, then the following
procedures shall apply: 

        (1)   If
the Company elects to satisfy the Conversion Obligation by Share Settlement, then settlement in shares will be made on or prior to the tenth (10th)
Trading Day following receipt of such conversion notice. 

        (2)   If
the Company elects to satisfy the Conversion Obligation by Cash Settlement or Combined Settlement, then the Company will notify the Holder, through the Trustee, of
the dollar amount to be satisfied in cash (which must be expressed either as one hundred percent (100%) of the Conversion Obligation or as a fixed dollar amount that is not less than the aggregate
principal amount of the Securities tendered for conversion) at any time on or before the date that is two Business Days following receipt of the notice of conversion (the "Settlement Notice Period").
Share Settlement will apply automatically if the Company does not notify the Holder that the Company has chosen another settlement method. 

17

  

        (3)   If
the Company timely elects Cash Settlement or Combined Settlement, then the Holder may retract the conversion notice at any time during the two (2) Business Day
period beginning on the day after the Settlement Notice Period (the "Conversion Retraction Period"). The Holder cannot retract the conversion notice (and the conversion notice therefore will be
irrevocable) if the Company elects Share Settlement. If the Holder has not retracted the conversion notice during the Conversion Retraction Period, then Cash Settlement or Combined Settlement will
occur on the first Trading Day following the Cash Settlement Averaging Period. For purposes of this Section 4.2(c)(3), the Cash Settlement Averaging Period will be the five (5) Trading
Day period beginning on the first Trading Day after the Conversion Retraction Period. 

        (d)   If
the Company receives the conversion notice after the day that is thirty (30) days prior to the Final Maturity Date, then the following procedures will apply: 

        (1)   On
or prior to the day that is thirty (30) days prior to the Final Maturity Date, the Company may notify (the "Conversion Settlement Election Notice") the Holder,
through the Trustee, that the Company intends to satisfy all Conversion Obligations arising during such thirty (30) day period by either Cash Settlement or Combined Settlement, and the Company
will state in the Conversion Settlement Election Notice the fixed dollar amount of cash that will be delivered to the Holder, which will not be less than the aggregate principal amount of the
Securities that the Holder tenders for conversion. Share Settlement will apply automatically if the Company does not deliver to the Holder the Conversion Settlement Election Notice on or prior to the
day that is thirty (30) days prior to the Final Maturity Date. The Company will settle all conversions of Securities in the same manner. The Holder cannot retract the conversion notice if the
Holder delivers such notice after the day that is thirty (30) days prior to the Final Maturity Date (and the conversion notice therefore will be irrevocable). 

        (2)   If
the Company has timely elected Cash Settlement or Combined Settlement, then with respect to all subsequent conversions, settlement amounts will be computed as set
forth above, except that the Cash Settlement Averaging Period will be the twenty (20) Trading Day period that begins on the date that is the twenty-second (22nd) Trading Day
expected to occur prior to the Final Maturity Date and that ends no later than the Trading Day immediately preceding the Final Maturity Date. However, if twenty (20) Trading Days do not occur
after such date and prior to the Final Maturity Date, then the Cash Settlement Averaging Period will be the number of Trading Days that do occur prior to the Final Maturity Date. 

        (3)   Settlement
(in shares and/or cash) will occur on or prior to the fifth (5th) Trading Day following the Final Maturity Date (or, if the Final Maturity Date is not a
Trading Day, on the first Trading Day after such five (5) Trading Day period). 

        (e)   If
an Event of Default (other than an Event of Default in a cash payment upon conversion of the Securities), has occurred and is continuing, the Company may not pay cash
upon conversion of any Security or portion of a Security (other than cash for fractional shares). 

        (f)    Anything
herein to the contrary notwithstanding, in the case of Global Securities, conversion notices may be delivered and such Global Securities may be surrendered for
conversion in accordance with the Applicable Procedures as in effect from time to time. 

        (g)   The
person in whose name the Common Stock certificate is registered shall be deemed to be a stockholder of record on the Conversion Date;  provided, however,
that no surrender of a Security on any date when the stock transfer books of the
Company shall be closed shall be effective to constitute the person or persons entitled to receive the shares of Common Stock upon such conversion as the record holder or holders of such shares of
Common Stock on such date, but such surrender shall be effective to constitute the person or persons entitled to receive such shares of Common Stock as the record holder or holders thereof for all
purposes at the close of business on the next succeeding day on 

18

 

which
such stock transfer books are open; provided, further, that such conversion shall be at the
Conversion Price in effect on the Conversion Date as if the stock transfer books of the Company had not been closed. Upon conversion of a Security, such person shall no longer be a Holder of such
Security. No payment or adjustment will be made for dividends or distributions on shares of Common Stock issued upon conversion of a Security. 

        To
the extent that any Securities are surrendered for conversion (in whole or in part) during the period from the close of business on any Record Date to the opening of business on the
next succeeding Additional Interest Payment Date, if any, the Company shall be entitled to direct the Paying Agent to take any and all actions consistent with custom and practice in order to prevent
the payment of Additional Interest in excess of the amounts provided in the Registration Rights Agreement. 

        Nothing
in this Section 4.2 shall affect the right of a Holder in whose name any Security is registered at the close of business on a Record Date to receive the Additional
Interest, if any, payable on such Security on the related Additional Interest Payment Date in accordance with the terms of this Indenture, the Securities and the Registration Rights Agreement. If a
Holder converts more than one Security at the same time, the number of shares of Common Stock issuable upon the conversion shall be based on the aggregate principal amount of Securities converted. 

        Upon
surrender of a Security that is converted in part, the Company shall execute, and the Trustee shall authenticate and deliver to the Holder, a new Security equal in principal amount
to the unconverted portion of the Security surrendered. 

        SECTION 4.3.    FRACTIONAL SHARES.    

        The
Company will not issue fractional shares of Common Stock upon conversion of Securities. In lieu thereof, the Company will pay an amount in cash for the fractional share equal to the
Volume Weighted Average Price of the Common Stock determined during the applicable Cash Settlement Averaging Period relating to the conversion multiplied by the fractional share (calculated to the
nearest 1/1000th of a share) and rounding the product to the nearest whole cent. 

        SECTION 4.4.    TAXES ON CONVERSION.    

        If
a Holder converts a Security, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of Common Stock upon such conversion. However,
the Holder shall pay any such tax which is due because the Holder requests the shares to be issued in a name other than the Holder's name. The Conversion Agent may refuse to deliver the certificate
representing the Common Stock being issued in a name other than the Holder's name until the Conversion Agent receives a sum sufficient to pay any tax which will be due because the shares are to be
issued in a name other than the Holder's name. Nothing herein shall preclude any tax withholding required by law or regulation. 

        SECTION 4.5.    COMPANY TO PROVIDE STOCK.    

        The
Company shall, prior to issuance of any Securities hereunder, and from time to time as may be necessary, reserve, out of its authorized but unissued Common Stock, a sufficient number
of shares of Common Stock to permit the conversion of all outstanding Securities into shares of Common Stock. 

        All
shares of Common Stock delivered upon conversion of the Securities shall be newly issued shares, shall be duly authorized, validly issued, fully paid and nonassessable and shall be
free from preemptive rights and free of any lien or adverse claim. 

        The
Company will endeavor promptly to comply with all federal and state securities laws regulating the offer and delivery of shares of Common Stock upon conversion of Securities, if any,
and will list or cause to have quoted such shares of Common Stock on each national securities exchange or on the NNM or other over-the-counter market or such other market on
which the Common Stock is 

19

 

then
listed or quoted; provided, however, that if rules of such automated quotation system or exchange
permit the Company to defer the listing of such Common Stock until the first conversion of the Notes into Common Stock in accordance with the provisions of this Indenture, the Company covenants to
list such Common Stock issuable upon conversion of the Notes in accordance with the requirements of such automated quotation system or exchange at such time. Any Common Stock issued upon conversion of
a Security hereunder which at the time of conversion was a Restricted Security will also be a Restricted Security. 

        SECTION 4.6.    ADJUSTMENT OF CONVERSION PRICE.    

        The
conversion price as stated in paragraph 5(d) of the Securities (the "Conversion Price") shall be adjusted from time to time by the Company as follows: 

        (a)   In
case the Company shall (i) pay a dividend on its Common Stock in shares of Common Stock, (ii) make a distribution on its Common Stock in shares of
Common Stock, (iii) subdivide its outstanding Common Stock into a greater number of shares, or (iv) combine its outstanding Common Stock into a smaller number of shares, the Conversion
Price in effect immediately prior thereto shall be adjusted so that the Holder of any Security thereafter surrendered for conversion shall be entitled to receive that number of shares of Common Stock
which it would have owned had such Security been converted immediately prior to the happening of such event. An adjustment made pursuant to this subsection (a) shall become effective
immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of subdivision or combination. 

        (b)   In
case the Company shall issue rights or warrants to all or substantially all holders of its Common Stock entitling them (for a period of not more than 60 days
after such issuance) to subscribe for or purchase shares of Common Stock (or securities convertible into Common Stock) at a price per share (or having a Conversion Price per share) less than the
Current Market Price per share of Common Stock (as determined in accordance with subsection (e) of this Section 4.6) on the record date for the determination of stockholders entitled to
receive such rights or warrants, the Conversion Price in effect immediately prior thereto shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to such record date by a fraction of which the numerator shall be the number of shares of Common Stock outstanding on such record date plus the number of shares which the
aggregate offering price of the total number of shares of Common Stock so offered (or the aggregate conversion price of the convertible securities so offered, which shall be determined by multiplying
the number of shares of Common Stock issuable upon conversion of such
convertible securities by the conversion price per share of Common Stock pursuant to the terms of such convertible securities) would purchase at the Current Market Price per share (as defined in
subsection (e) of this Section 4.6) of Common Stock on such record date, and of which the denominator shall be the number of shares of Common Stock outstanding on such record date plus
the number of additional shares of Common Stock offered (or into which the convertible securities so offered are convertible). Such adjustment shall be made successively whenever any such rights or
warrants are issued, and shall become effective immediately after such record date. If at the end of the period during which such rights or warrants are exercisable not all rights or warrants shall
have been exercised, the adjusted Conversion Price shall be immediately readjusted to what it would have been based upon the number of additional shares of Common Stock actually issued (or the number
of shares of Common Stock issuable upon conversion of convertible securities actually issued). 

        (c)   In
case the Company shall distribute to all or substantially all holders of its Common Stock any shares of capital stock of the Company (other than Common Stock),
evidences of indebtedness or other non-cash assets (including securities of any person other than the Company 

20

 

but
excluding (1) dividends or distributions paid exclusively in cash or (2) dividends or distributions referred to in subsection (a) of this Section 4.6), or shall
distribute to all or substantially all holders of its Common Stock rights or warrants to subscribe for or purchase any of its securities (excluding those rights and warrants referred to in subsection
(b) of this Section 4.6 and also excluding the distribution of rights to all holders of Common Stock pursuant to a Rights Plan (as defined below) adopted before or after the date of this
Indenture), then in each such case the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying the current Conversion Price by a fraction of which the
numerator shall be the Current Market Price per share (as defined in subsection (e) of this Section 4.6) of the Common Stock on the record date mentioned below less the fair market value
on such record date (as determined by the Board of Directors, whose determination shall be conclusive evidence of such fair market value and which shall be evidenced by an Officers' Certificate
delivered to the Trustee) of the portion of the capital stock, evidences of indebtedness or other non-cash assets so distributed or of such rights or warrants applicable to one share of
Common Stock (determined on the basis of the number of shares of Common Stock outstanding on the record date), and of which the denominator shall be the Current Market Price per share (as defined in
subsection (d) of this Section 4.6) of the Common Stock on such record date. Such adjustment shall be made successively whenever any such distribution is made and shall become effective
immediately after the record date for the determination of shareholders entitled to receive such distribution. 

        In
the event the then fair market value (as so determined) of the portion of the capital stock, evidences of indebtedness or other non-cash assets so distributed or of such
rights or warrants applicable to one share of Common Stock is equal to or greater than the Current Market Price per share of the Common Stock on such record date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each holder of a Security shall have the right to receive upon conversion the amount of capital stock, evidences of indebtedness or other non-cash
assets so distributed or of such rights or warrants such holder would have received had such holder converted each Security on such record date. In the event that such dividend or distribution is not
so paid or made, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if such dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this Section 4.6(c) by reference to the actual or when issued trading market for any securities, it must in doing so
consider the prices in such market over the same period used in computing the Current Market Price of the Common Stock. 

        With
respect to the Company's existing preferred shares rights plan and any similar rights plan that the Company implements after the date of this Indenture (any existing or future
preferred shares rights plan or similar rights plan, a "Rights Plan"), upon conversion of the Securities into Common Stock, to the extent that such Rights Plan has been implemented and is still in
effect upon such conversion, the holders of Securities will receive, in addition to the Common Stock, the rights described therein (whether or not the rights have separated from the Common Stock at
the time of conversion), subject to the limitations set forth in any such Rights Plan. Any distribution of rights or warrants pursuant to a Rights Plan complying with the requirements set forth in the
immediately preceding sentence of this paragraph shall not constitute a distribution of rights or warrants pursuant to this Section 4.6(c). 

        Rights
or warrants (other than rights issued pursuant to a Rights Plan) distributed by the Company to all holders of Common Stock entitling the holders thereof to subscribe for or
purchase shares of the Company's Capital Stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events ("Trigger Event"):
(i) are deemed to be transferred with such shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of Common Stock, shall be
deemed not to have 

21

 

been
distributed for purposes of this Section 4.6 (and no adjustment to the Conversion Price under this Section 4.6 will be required) until the occurrence of the earliest Trigger Event,
whereupon such rights and warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Price shall be made under this Section 4.6(c).
If any such right or warrant, including any such existing rights or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights or
warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of
distribution and record date with respect to new rights or warrants with such rights (and a termination or expiration of the existing rights or warrants without exercise by any of the holders
thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with
respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Price under this Section 4.6 was made, (1) in the case of any
such rights or warrants which shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Price shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or repurchase price received by a holder or holders of
Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of Common Stock as of the date of such redemption or repurchase,
and (2) in the case of such rights or warrants which shall have expired or been terminated without exercise by any holders thereof, the Conversion Price shall be readjusted as if such rights
and warrants had not been issued. 

        (d)   (1)    In
case the Company shall, by dividend or otherwise, at any time distribute (a "Triggering Distribution") to all or substantially all holders of its
Common Stock cash in an aggregate amount that, together with the aggregate amount of (A) any cash and the fair market value (as determined by the Board of Directors, whose determination shall
be conclusive evidence thereof and which shall be evidenced by an Officers' Certificate delivered to the Trustee) of any other consideration payable in respect of any tender offer by the Company or a
Subsidiary of the Company for Common Stock consummated within the 12 months preceding the date of payment of the Triggering Distribution and in respect of which no Conversion Price adjustment
pursuant to this Section 4.6 has been made and (B) all other cash distributions to all or substantially all holders of its Common Stock made within the 12 months preceding the
date of payment of the Triggering Distribution and in respect of which no Conversion Price adjustment pursuant to this Section 4.6 has been made, exceeds an amount equal to 10.0% of the product
of the Current Market Price per share of Common Stock (as determined in accordance with subsection (e) of this Section 4.6) on the Business Day (the "Determination Date") immediately
preceding the day on which such Triggering Distribution is declared by the Company multiplied by the number of shares of Common Stock outstanding on the Determination Date (excluding shares held in
the treasury of the Company), the Conversion Price shall be reduced so that the same shall equal the price determined by multiplying such Conversion Price in effect immediately prior to the
Determination Date by a fraction of which the numerator shall be the Current Market Price per share of the Common Stock (as determined in accordance with subsection (e) of this
Section 4.6) on the Determination Date less the sum of the aggregate amount of cash and the aggregate fair market value (determined as aforesaid in this Section 4.6(d)(1)) of any such
other consideration so distributed, paid or payable within such 12 months (including, without limitation, the Triggering Distribution) applicable to one share of Common Stock (determined on the
basis of the number of shares of Common Stock outstanding on the Determination Date) and the denominator shall be such Current Market Price per share of the Common Stock (as determined in accordance
with subsection (e) of this Section 4.6) on the Determination Date, such reduction to become effective 

22

 

immediately
prior to the opening of business on the day following the date on which the Triggering Distribution is paid. 

        (2)   In
case any tender offer made by the Company or any of its Subsidiaries for Common Stock shall expire and such tender offer (as amended upon the expiration thereof)
shall involve the payment of aggregate consideration in an amount (determined as the sum of the aggregate amount of cash consideration and the aggregate fair market value (as determined by the Board
of Directors, whose determination shall be conclusive evidence thereof and which shall be evidenced by an Officers' Certificate delivered to the Trustee thereof) of any other consideration) that,
together with the aggregate amount of (A) any cash and the fair market value (as determined by the Board of Directors, whose determination shall be conclusive evidence thereof and which shall
be evidenced by an Officers' Certificate delivered to the Trustee) of any other consideration payable in respect of any other tender offers by the Company or any Subsidiary of the Company for Common
Stock consummated within the 12 months preceding the date of the Expiration Date (as defined below) and in respect of which no Conversion Price adjustment pursuant to this Section 4.6
has been made and (B) all cash distributions to all or substantially all holders of its Common Stock made within the 12 months preceding the Expiration Date and in respect of which no
Conversion Price adjustment pursuant to this Section 4.6 has been made, exceeds an amount equal to 10.0% of the product of the Current Market Price per share of Common Stock (as determined in
accordance with subsection (e) of this Section 4.6) as of the last date (the "Expiration Date") tenders could have been made pursuant to such tender offer (as it may be amended) (the
last time at which such tenders could have been made on the Expiration Date is hereinafter sometimes called the "Expiration Time") multiplied by the number of shares of Common Stock outstanding
(including tendered shares but excluding any shares held in the treasury of the Company) at the Expiration Time, then, immediately prior to the opening of business on the day after the Expiration
Date, the Conversion Price shall be reduced so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on the Expiration
Date by a fraction of which the numerator shall be the product of the number of shares of Common Stock outstanding (including tendered shares but excluding any shares held in the treasury of the
Company) at the Expiration Time multiplied by the Current Market Price per share of the Common Stock (as determined in accordance with subsection (e) of this Section 4.6) on the Trading
Day next succeeding the Expiration Date and the denominator shall be the sum of (x) the aggregate consideration (determined as aforesaid) payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender offer) of all shares validly tendered and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of the number of shares of Common Stock outstanding (less any Purchased Shares and excluding any shares held in the treasury of the
Company) at the Expiration Time and the Current Market Price per share of Common Stock (as determined in accordance with subsection (e) of this Section 4.6) on the Trading Day next
succeeding the Expiration Date, such reduction to become effective immediately prior to the opening of business on the day following the Expiration Date. In the event that the Company is obligated to
purchase shares pursuant to any such tender offer, but the Company is permanently prevented by applicable law from effecting any or all such purchases or any or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price which would have been in effect based upon the number of shares actually purchased. If the application of this
Section 4.6(d)(2) to any tender offer would result in an increase in the Conversion Price, no adjustment shall be made for such tender offer under this Section 4.6(d)(2). 

23

 

        (3)   For
purposes of this Section 4.6(d), the term "tender offer" shall mean and include both tender offers and exchange offers, all references to "purchases" of
shares in tender offers (and all similar references) shall mean and include both the purchase of shares in tender offers and the acquisition of
shares pursuant to exchange offers, and all references to "tendered shares" (and all similar references) shall mean and include shares tendered in both tender offers and exchange offers. 

        (e)   For
the purpose of any computation under subsections (b), (c) and (d) of this Section 4.6, the current market price (the "Current Market Price") per
share of Common Stock on any date shall be deemed to be the average of the daily closing prices for the 30 consecutive Trading Days commencing 45 Trading Days before (i) the Determination Date
or the Expiration Date, as the case may be, with respect to distributions or tender offers under subsection (c) or (d) of this Section 4.6 or (ii) the record date with
respect to distributions, issuances or other events requiring such computation under subsection (b), (c) or (d) of this Section 4.6. The closing price (the "Closing Price") for
each day shall be the last reported sales price or, in case no such reported sale takes place on such date, the average of the reported closing bid and asked prices in either case on The Nasdaq
National Market (the "NNM") or, if the Common Stock is not quoted on the NNM, on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if not quoted
on the NNM or listed or admitted to trading on any national securities exchange, the last reported sales price of the Common Stock as quoted on NASDAQ or, in case no reported sales takes place, the
average of the closing bid and asked prices as quoted on NASDAQ or any comparable system or, if the Common Stock is not quoted on NASDAQ or any comparable system, the closing sales price or, in case
no reported sale takes place, the average of the closing bid and asked prices, as furnished by any two members of the National Association of Securities Dealers, Inc. selected from time to time
by the Company for that purpose. If no such prices are available, the Current Market Price per share shall be the fair value of a share of Common Stock as determined by the Board of Directors (which
shall be evidenced by an Officers' Certificate delivered to the Trustee). 

        (f)    In
any case in which this Section 4.6 shall require that an adjustment be made following a record date or a Determination Date or Expiration Date, as the case may
be, established for purposes of this Section 4.6, the Company may elect to defer (but only until five Business Days following the filing by the Company with the Trustee of the certificate
described in Section 4.9) issuing to the Holder of any Security converted after such record date or Determination Date or Expiration Date the shares of Common Stock and other capital stock of
the Company issuable upon such conversion over and above the shares of Common Stock and other capital stock of the Company issuable upon such conversion only on the basis of the Conversion Price prior
to adjustment; and, in lieu of the shares the issuance of which is so deferred, the Company shall issue or cause its transfer agents to issue due bills or other appropriate evidence prepared by the
Company of the right to receive such shares. If any distribution in respect of which an adjustment to the Conversion Price is required to be made as of the record date or Determination Date or
Expiration Date therefor is not thereafter made or paid by the Company for any reason, the Conversion Price shall be readjusted to the Conversion Price which would then be in effect if such record
date had not been fixed or such effective date or Determination Date or Expiration Date had not occurred. 

        SECTION 4.7.    NO ADJUSTMENT.    

        No
adjustment in the Conversion Price shall be required if Holders may participate in the transactions described in Section 4.6 above without converting. 

        No
adjustment in the Conversion Price shall be required unless the adjustment would require an increase or decrease of at least 1% in the Conversion Price as last adjusted;  provided, however, that any 

24

 

adjustments
which by reason of this Section 4.7 are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this
Article 4 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be. 

        No
adjustment need be made for issuances of Common Stock pursuant to a Company plan for reinvestment of dividends or interest or for a change in the par value or a change to no par value
of the Common Stock. 

        To
the extent that the Securities become convertible into the right to receive cash, no adjustment need be made thereafter as to the cash. Interest will not accrue on the cash. 

        SECTION 4.8.    ADJUSTMENT FOR TAX PURPOSES.    

        Subject
to the Company having received prior approval of the Federal Reserve if then required under applicable regulations, guidelines or policies, the Company shall be entitled to make
such reductions in the Conversion Price, in addition to those required by Section 4.6, as it in its discretion shall determine to be advisable in order that any stock dividends, subdivisions of
shares, distributions of rights to purchase stock or securities or distributions of securities convertible into or exchangeable for stock hereafter made by the Company to its stockholders shall not be
taxable. 

        SECTION 4.9.    NOTICE OF ADJUSTMENT.    

        Whenever
the Conversion Price is adjusted, the Company shall promptly mail to Securityholders a notice of the adjustment and file with the Trustee an Officers' Certificate briefly
stating the facts requiring the adjustment and the manner of computing it. Unless and until the Trustee shall receive an Officers' Certificate setting forth an adjustment of the Conversion Price, the
Trustee may assume without inquiry that the Conversion Price has not been adjusted and that the last Conversion Price of which it has knowledge remains in effect. 

        SECTION 4.10.    NOTICE OF CERTAIN TRANSACTIONS.    

        In
the event that: 

        (1)   the
Company takes any action which would require an adjustment in the Conversion Price; 

        (2)   the
Company consolidates or merges with, or transfers all or substantially all of its property and assets to, another corporation and stockholders of the Company must
approve the transaction; or 

        (3)   there
is a dissolution or liquidation of the Company, 

the
Company shall mail to Holders and file with the Trustee a notice stating the proposed record or effective date, as the case may be. The Company shall mail the notice at least ten days before such
date. Failure to mail such notice or any defect therein shall not affect the validity of any transaction referred to in clause (1), (2) or (3) of this Section 4.10. 

        SECTION 4.11.    EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE ON CONVERSION PRIVILEGE.    

        If
any of the following shall occur, namely: (a) any reclassification or change of shares of Common Stock issuable upon conversion of the Securities (other than a change in par
value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination, or any other change for which an adjustment is provided in
Section 4.6); (b) any consolidation or merger or combination to which the Company is a party other than a merger in which the Company is the continuing corporation and which does not
result in any reclassification of, or change (other than in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination) in,
outstanding shares of Common Stock; or (c) any sale or conveyance as 

25

 

an
entirety or substantially as an entirety of the property and assets of the Company, directly or indirectly, to any Person, then the Company, or such successor, purchasing or transferee Person, as
the case may be, shall, as a condition precedent to such reclassification, change, combination, consolidation, merger, sale or conveyance, execute and deliver to the Trustee a supplemental indenture
providing that the Holder of each Security then outstanding shall have the right to convert such Security into the kind and amount of shares of stock and other securities and property (including cash)
receivable upon such reclassification, change, combination, consolidation, merger, sale or conveyance by a holder of the number of shares of Common Stock deliverable upon conversion of such Security
immediately prior to such reclassification, change, combination, consolidation, merger, sale or conveyance. Such supplemental indenture shall provide for adjustments of the Conversion Price which
shall be as nearly equivalent as may be practicable to the adjustments of the Conversion Price provided for in this Article 4. If, in the case of any such consolidation, merger, combination,
sale or conveyance, the stock or other securities and property (including cash) receivable thereupon by a holder of Common Stock include shares of stock or other securities and property of a Person
other than the successor, purchasing or transferee Person, as the case may be, in such consolidation, merger, combination, sale or conveyance, then such supplemental indenture shall also be executed
by such other Person and shall contain such additional provisions to protect the interests of the Holders of the Securities as the Board of Directors shall reasonably consider necessary by reason of
the foregoing. The provisions of this Section 4.11 shall similarly apply to successive reclassifications, changes, combinations, consolidations, mergers, sales or conveyances. 

        In
the event the Company shall execute a supplemental indenture pursuant to this Section 4.11, the Company shall promptly file with the Trustee (x) an Officers' Certificate
briefly stating the reasons therefor, the kind or amount of shares of stock or other securities or property (including cash) receivable by Holders of the Securities upon the conversion of their
Securities after any such reclassification, change, combination, consolidation, merger, sale or conveyance, any adjustment to be made with respect thereto and that all conditions precedent have been
complied with and (y) an Opinion of Counsel that all conditions precedent have been complied with, and shall promptly mail notice thereof to all Holders. 

        SECTION 4.12.    TRUSTEE'S DISCLAIMER.    

        The
Trustee shall have no duty to determine when an adjustment under this Article 4 should be made, how it should be made or what such adjustment should be, but may accept as
conclusive evidence of
that fact or the correctness of any such adjustment, and shall be protected in relying upon, an Officers' Certificate including the Officers' Certificate with respect thereto which the Company is
obligated to file with the Trustee pursuant to Section 4.9. The Trustee makes no representation as to the validity or value of any securities or assets issued upon conversion of Securities, and
the Trustee shall not be responsible for the Company's failure to comply with any provisions of this Article 4. 

        The
Trustee shall not be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture executed pursuant to Section 4.11, but may
accept as conclusive evidence of the correctness thereof, and shall be fully protected in relying upon, the Officers' Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 4.11. 

        SECTION 4.13.    VOLUNTARY REDUCTION.    

        Subject
to the Company having received prior approval of the Federal Reserve if then required under applicable regulations, guidelines or policies, the Company from time to time may
reduce the Conversion Price by any amount for any period of time if the period is at least 20 days and if the reduction is irrevocable during the period if the Board of Directors determines
that such reduction would be in the best interest of the Company or to avoid or diminish income tax to holders of shares of Common Stock in connection with a dividend or distribution of stock or
similar event, and the 

26

 

Company
provides 15 days prior notice of any reduction in the Conversion Price; provided,  however, that in no event may the Company reduce the Conversion
Price to be less than the par value of a share of Common Stock. 

 
 

ARTICLE 5    
    
    SUBORDINATION    
    

        SECTION 5.1.    AGREEMENT OF SUBORDINATION.    

        The
Company covenants and agrees, and each Holder of Securities issued hereunder by its acceptance thereof likewise covenants and agrees, that all Securities shall be issued subject to
the provisions of this Article 5; and each Person holding any Security, whether upon original issue or upon transfer, assignment or exchange thereof, accepts and agrees to be bound by such
provisions. 

        The
payment of the principal of, premium, if any, and Additional Interest, if any, on all Securities issued hereunder shall, to the extent and in the manner hereinafter set forth, be
subordinated and subject in right of payment to the prior payment in full in cash or other payment satisfactory to the holders of Senior Indebtedness of all Senior Indebtedness, whether outstanding at
the date of this Indenture or thereafter incurred. 

        No
provision of this Article 5 shall prevent the occurrence of any default or Event of Default hereunder. 

        SECTION 5.2.    PAYMENTS TO HOLDERS.    

        No
payment shall be made with respect to the principal of, or premium, if any, or Additional Interest, if any, on the Securities, except payments and distributions made by the Trustee as
permitted by the first or second paragraph of Section 5.5, if: 

        (i)    a
default in the payment of principal, premium, interest, rent or other obligations due on any Senior Indebtedness occurs and is continuing (or, in the case of Senior
Indebtedness for which there is a period of grace, in the event of such a default that continues beyond the period of grace, if any, specified in the instrument or lease evidencing such Senior
Indebtedness), unless and until such default shall have been cured or waived or shall have ceased to exist; or 

        (ii)   a
default, other than a payment default, on a Senior Indebtedness occurs and is continuing that then permits holders of such Senior Indebtedness to accelerate its
maturity and the Trustee receives a notice of the default from a Representative or holder of Senior Indebtedness or the Company. 

        The
Company may and shall resume payments on and distributions in respect of the Securities in the case of a default referred to in clause (i) or (ii) above, upon the date
on which the default is cured or waived or ceases to exist. 

        Upon
any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution or
winding-up or liquidation or reorganization of the Company (whether voluntary or involuntary) or in bankruptcy, insolvency, receivership or similar proceedings, all amounts due or to
become due upon all Senior Indebtedness shall first be paid in full in cash, or other payment satisfactory to the holders of Senior Indebtedness before any payment is made on account of the principal
of, premium, if any, Additional Interest, if any, on the Securities (except payments made pursuant to Article 10 from monies deposited with the Trustee pursuant thereto prior to commencement of
proceedings for such dissolution, winding-up, liquidation or reorganization); and upon any such dissolution or winding-up or liquidation or reorganization of the Company or
bankruptcy, insolvency, receivership or other proceeding, any payment by the Company, or distribution of assets of the Company of any kind or character, whether 

27

 

in
cash, property or securities, to which the Holders of the Securities or the Trustee would be entitled, except for the provision of this Article 5, shall (except as aforesaid) be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the Holders of the Securities or by the Trustee under this
Indenture if received by them or it, directly to the holders of Senior Indebtedness (pro rata to such holders on the basis of the respective amounts of Senior Indebtedness held by such holders, or as
otherwise required by law or a court order) or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any Senior
Indebtedness may have been issued, as their respective interests may appear, to the extent necessary to pay all Senior Indebtedness in full in cash, or other payment satisfactory to the holders of
Senior Indebtedness, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness, before any payment or distribution is made to the Holders of the
Securities or to the Trustee. 

        For
purposes of this Article 5, the words, "cash, property or securities" shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities
of the Company or any other corporation provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least to the extent provided in this Article 5 with
respect to the Securities to the payment of all Senior Indebtedness which may at the time be outstanding; provided that (i) the Senior Indebtedness is assumed by the new corporation, if any,
resulting from any reorganization or readjustment, and (ii) the rights of the holders of Senior Indebtedness (other than leases which are not assumed by the Company or the new corporation, as
the case may be) are not, without the consent of such holders, altered by such reorganization or readjustment. The consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the conveyance, transfer or lease of its property as an entirety, or substantially as an entirety, to another corporation upon
the terms and conditions provided for in Article 7 shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 5.2 if such
other corporation shall, as a part of such consolidation, merger, conveyance, transfer or lease, comply with the conditions stated in Article 7. 

        In
the event of the acceleration of the Securities because of an Event of Default specified in clauses (3) and (4) of Section 8.1 hereof, no payment or distribution
shall be made to the Trustee or any Holder of Securities in respect of the principal of, premium, if any, or Additional Interest, if any, on the Securities by the Company, except payments and
distributions made by the Trustee as permitted by
Section 5.5, until all Senior Indebtedness has been paid in full in cash or other payment satisfactory to the holders of Senior Indebtedness or such acceleration is rescinded in accordance with
the terms of this Indenture. If payment of the Securities is accelerated because of an Event of Default specified in clauses (3) and (4) of Section 8.1 hereof, the Company shall
promptly notify holders of Senior Indebtedness of such acceleration. 

        In
the event that, notwithstanding the foregoing provisions, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities
(including, without limitation, by way of setoff or otherwise), prohibited by the foregoing, shall be received by the Trustee or the Holders of the Securities before all Senior Indebtedness is paid in
full, in cash or other payment satisfactory to the holders of Senior Indebtedness, or provision is made for such payment thereof in accordance with its terms in cash or other payment satisfactory to
the holders of Senior Indebtedness, such payment or distribution shall be held in trust for the benefit of and shall be paid over or delivered to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any Senior Indebtedness may have been issued, as their respective
interests may appear, as calculated by the Company, for application to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full, in cash
or other payment satisfactory to the holders of Senior 

28

 

Indebtedness,
after giving effect to any concurrent payment or distribution to or for the holders of such Senior Indebtedness. 

        Nothing
in this Section 5.2 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 9.7. This Section 5.2 shall be subject to the further
provisions of Section 5.5. 

        SECTION 5.3.    SUBROGATION OF SECURITIES.    

        Subject
to the payment in full, in cash or other payment satisfactory to the holders of Senior Indebtedness, of all Senior Indebtedness, the rights of the Holders of the Securities shall
be subrogated to the extent of the payments or distributions made to the holders of such Senior Indebtedness pursuant to the provisions of this Article 5 (equally and ratably with the holders
of all indebtedness of the Company which by its express terms is subordinated to other indebtedness of the Company to substantially the same extent as the Securities are subordinated and is entitled
to like rights of subrogation) to the rights of the holders of Senior Indebtedness to receive payments or distributions of cash, property or securities of the Company applicable to the Senior
Indebtedness until the principal, premium, if any, and Additional Interest, if any), on the Securities shall be paid in full in cash or other payment satisfactory to the holders of Senior
Indebtedness; and, for the purposes of such subrogation, no payments or distributions to the holders of the Senior Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this Article 5, and no payment over pursuant to the provisions of this Article 5, to or for the benefit of the
holders of Senior Indebtedness by Holders of the Securities or the Trustee, shall, as between the Company, its creditors other than holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment by the Company to or on account of the Senior Indebtedness; and no payments or distributions of cash, property or securities to or for the benefit of the Holders
of the Securities pursuant to the subrogation provisions of this Article 5, which would otherwise have been paid to the holders of Senior Indebtedness shall be deemed to be a payment by the
Company to or for the account of the Securities. It is understood that the provisions of this Article 5 are and are intended solely for the purposes of defining the relative rights of the
Holders of the Securities, on the one hand, and the holders of the Senior Indebtedness, on the other hand. 

        Nothing
contained in this Article 5 or elsewhere in this Indenture or in the Securities is intended to or shall impair, as among the Company, its creditors other than the holders
of Senior Indebtedness, and the Holders of the Securities, the obligation of the Company, which is absolute and unconditional, to pay to the Holders of the Securities the principal of, (and premium,
if any) and Additional Interest, if any, on the Securities as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of
the Holders of the Securities and creditors of the Company other than the holders of the Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article 5 of the holders of Senior Indebtedness
in respect of cash, property or securities of the Company received upon the exercise of any such remedy. 

        Upon
any payment or distribution of assets of the Company referred to in this Article 5, the Trustee, subject to the provisions of Section 9.1, and the Holders of the
Securities shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which such bankruptcy, dissolution, winding-up, liquidation or reorganization
proceedings are pending, or a certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, delivered to the Trustee or to the
Holders of the Securities, for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon and all other facts pertinent thereto or to this Article 5. 

29

 

        SECTION 5.4.    AUTHORIZATION TO EFFECT SUBORDINATION.    

        Each
Holder of a Security by the Holder's acceptance thereof authorizes and directs the Trustee on the Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 5 and appoints the Trustee to act as the Holder's attorney-in-fact for any and all such purposes. If the Trustee
does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 5.3 hereof at least 30 days before the expiration of the time
to file such claim, the holders of any Senior Indebtedness or their representatives are hereby authorized to file an appropriate claim for and on behalf of the Holders of the Securities. 

        SECTION 5.5.    NOTICE TO TRUSTEE.    

        The
Company shall give prompt written notice in the form of an Officers' Certificate to a Trust Officer of the Trustee and to any Paying Agent of any fact known to the Company which
would prohibit the making of any payment of monies to or by the Trustee or any Paying Agent in respect of the Securities pursuant to the provisions of this Article 5. Notwithstanding the
provisions of this Article 5 or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any
payment of monies to or by the Trustee in respect of the Securities pursuant to the provisions of this Article 5, unless and until a Trust Officer of the Trustee shall have received written
notice thereof at the Corporate Trust Office from the Company (in the form of an Officers' Certificate) or a Representative or a holder or holders of Senior Indebtedness or from any trustee thereof;
and before the receipt of any such written notice, the Trustee, subject to the provisions of Section 9.1, shall be entitled in all respects to assume that no such facts exist; provided that if
on a date not less than one Business Day prior to the date upon which by the terms hereof any such monies may become payable for any purpose (including, without limitation, the payment of the
principal of, premium, if any, or Additional Interest, if any, on any Security) the Trustee shall not have received, with respect to such monies, the notice provided for in this Section 5.5,
then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such monies and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be received by it on or after such prior date. Notwithstanding anything in this Article 5 to the contrary, nothing
shall prevent any payment by the Trustee to the Holders of monies deposited with it pursuant to Article 10, and any such payment shall not be subject to the provisions of Article 5. 

        The
Trustee, subject to the provisions of Section 9.1, shall be entitled to rely on the delivery to it of a written notice by a Representative or a person representing himself to
be a holder of Senior Indebtedness (or a trustee on behalf of such holder) to establish that such notice has been given by a Representative or a holder of Senior Indebtedness or a trustee on behalf of
any such holder or holders. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article 5, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under
this Article 5, and if such evidence is not furnished the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. 

        SECTION 5.6.    TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS.    

        The
Trustee in its individual capacity shall be entitled to all the rights set forth in this Article 5 in respect of any Senior Indebtedness at any time held by it, to the same
extent as any other holder of Senior Indebtedness, and nothing in Section 9.11 or elsewhere in this Indenture shall deprive the Trustee of any of its rights as such holder. 

30

  

        With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this
Article 5, and no implied covenants or obligations with respect to the holders of Senior Indebtedness shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness and, subject to the provisions of Section 9.1, the Trustee shall not be liable to any holder of Senior Indebtedness if it shall pay
over or deliver to Holders of Securities, the Company or any other person money or assets to which any holder of Senior Indebtedness shall be entitled by virtue of this Article 5 or otherwise. 

        SECTION 5.7.    NO IMPAIRMENT OF SUBORDINATION.    

        No
right of any present or future holder of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or otherwise be charged with. 

        SECTION 5.8.    CERTAIN CONVERSIONS DEEMED PAYMENT.    

        For
the purposes of this Article 5 only, (1) the issuance and delivery of junior securities upon conversion of Securities in accordance with Article 4 shall not be
deemed to constitute a payment or distribution on account of the principal of (or premium, if any) or Additional Interest, if any, on Securities or on account of the purchase or other acquisition of
Securities, and (2) the payment, issuance or delivery of cash (except in satisfaction of fractional shares pursuant to Section 4.3), property or securities (other than junior securities)
upon conversion of a Security shall be deemed to constitute payment on account of the principal of such Security. For the purposes of this Section 5.8, the term "junior securities" means
(a) shares of any stock of any class of the Company, or (b) securities of the Company which are subordinated in right of payment to all Senior Indebtedness which may be outstanding at
the time of issuance or delivery of such securities to substantially the same extent as, or to a greater extent than, the Securities are so subordinated as provided in this Article. Nothing contained
in this Article 5 or elsewhere in this Indenture or in the Securities is intended to or shall impair, as among the Company, its creditors other than holders of Senior Indebtedness and the
Holders, the right, which is absolute and unconditional, of the Holder of any Security to convert such Security in accordance with Article 4. 

        SECTION 5.9.    ARTICLE APPLICABLE TO PAYING AGENTS.    

        If
at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article shall (unless the
context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in
addition to or in place of the Trustee; provided, however, that the first paragraph of
Section 5.5 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying Agent. 

        SECTION 5.10.    SENIOR INDEBTEDNESS ENTITLED TO RELY.    

        The
holders of Senior Indebtedness shall have the right to rely upon this Article 5, and no amendment or modification of the provisions contained herein shall diminish the rights
of such holders unless such holders shall have agreed in writing thereto. 

31

 

 
 

ARTICLE 6    
    
    COVENANTS    
    

        SECTION 6.1.    PAYMENT OF SECURITIES.    

        The
Company shall promptly make all payments in respect of the Securities on the dates and in the manner provided in the Securities and this Indenture. An installment of principal or
Additional Interest, if any, shall be considered paid on the date it is due if the Paying Agent (other than the Company) holds by 11:00 a.m., New York City time, on that date money, deposited
by the Company or an Affiliate thereof, sufficient to pay the installment. Subject to Section 4.2(g) hereof, accrued and unpaid Additional Interest, if any, on any Security that is payable, and
is punctually paid or duly provided for, on any Additional Interest Payment Date shall be paid to the Person in whose name that Security is registered at the close of business on the Record Date for
such interest at the office or agency of the Company maintained for such purpose. 

        Payment
of the principal of (and premium, if any) and Additional Interest, if any, on the Securities shall be made at the office or agency of the Company maintained for that purpose in
the Borough of Manhattan, The City of New York (which shall initially be Wells Fargo Bank Minnesota, National Association, 45 Broadway, 12th Floor, New York, NY 10002) or at the Corporate Trust Office
of the Trustee in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts;  provided, however, that at the option of the Company payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address appears in the Register; provided further that a Holder with an aggregate principal amount in
excess of $2,000,000 will be paid by wire transfer in immediately available funds at the election of such Holder if such Holder has provided wire transfer instructions to the Company at least 10
Business Days prior to the payment date. 

        SECTION 6.2.    SEC REPORTS.    

        The
Company shall file all reports and other information and documents which it is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, and within
15 days after it files them with the SEC, the Company shall file copies of all such reports, information and other documents with the Trustee. 

        Delivery
of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers' Certificates). 

        SECTION 6.3.    COMPLIANCE CERTIFICATES.    

        The
Company shall deliver to the Trustee, within 90 days after the end of each fiscal year of the Company (beginning with the fiscal year ending December 31, 2003), an
Officers' Certificate as to the signers' knowledge of the Company's compliance with all conditions and covenants on its part contained in this Indenture and stating whether or not the signer knows of
any default or Event of Default. If such signer knows of such a default or Event of Default, the Officers' Certificate shall describe the default or Event of Default and the efforts to remedy the
same. For the purposes of this Section 6.3, compliance shall be determined without regard to any grace period or requirement of notice provided pursuant to the terms of this Indenture. 

32

 

        SECTION 6.4.    FURTHER INSTRUMENTS AND ACTS.    

        Upon
request of the Trustee, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively
the purposes of this Indenture. 

        SECTION 6.5.    MAINTENANCE OF CORPORATE EXISTENCE.    

        Subject
to Article 7, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence. 

        SECTION 6.6.    RULE 144A INFORMATION REQUIREMENT.    

        Within
the period prior to the expiration of the holding period applicable to sales thereof under Rule 144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject to Section 13 or 15(d) under the Exchange Act, upon the request of any Holder or beneficial holder of the
Securities make available to such Holder or beneficial holder of Securities or any Common Stock issued upon conversion thereof which continue to be Restricted Securities in connection with any sale
thereof and any prospective purchaser of Securities or such Common Stock designated by such Holder or beneficial holder, the information required pursuant to Rule 144A(d)(4) under the
Securities Act and it will take such further action as any Holder or beneficial holder of such Securities or such Common Stock may reasonably request, all to the extent required from time to time to
enable such Holder or beneficial holder to sell its Securities or Common Stock without registration under the Securities Act within the limitation of the exemption provided by Rule 144A, as
such Rule may be amended from time to time. Upon the request of any Holder or any beneficial holder of the Securities or such Common Stock, the Company will deliver to such Holder a written statement
as to whether it has complied with such requirements. 

        SECTION 6.7.    STAY, EXTENSION AND USURY LAWS.    

        The
Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of, premium, if any, or Additional Interest, if any, on the
Securities as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture, and the Company (to the extent it
may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. 

        SECTION 6.8.    PAYMENT OF ADDITIONAL INTEREST.    

        If
at any time Additional Interest is payable by the Company pursuant to the Registration Rights Agreement, the Company shall promptly deliver to the Trustee a certificate to that effect
stating (i) the amount of such Additional Interest that is payable and (ii) the date on which such Additional Interest is payable pursuant to the Registration Rights Agreement. Unless
and until a Trust Officer of the Trustee receives such a certificate, the Trustee may assume without inquiry that no such Additional Interest is payable. If the Company has paid Additional Interest
directly to the Persons entitled to it, the Company shall deliver to the Trustee a certificate setting forth the particulars of such payment. 

33

 

 
 

ARTICLE 7    
    
    CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE    
    

        SECTION 7.1.    COMPANY MAY CONSOLIDATE, ETC, ONLY ON CERTAIN TERMS.    

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

        (1)   in
case the Company 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 Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, limited liability company, partnership, trust or other business entity organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia (provided that, if as a result of such consolidation, merger, conveyance, transfer or lease, the
Securities would become convertible into equity interests of a Person other than the Company pursuant to Section 4.11, then such Person shall not be a tax pass-through entity); 

        (2)   the
successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall expressly assume, by
an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and Additional Interest,
if any, on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed and the conversion rights shall be provided
for in accordance with Article 4, by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee, and by the Successor Person; 

        (3)   immediately
after giving effect to such transaction, no Event of Default or Default, shall have occurred and be continuing; and 

        (4)   the
Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease
and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture complies with this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with. 

        SECTION 7.2.    SUCCESSOR SUBSTITUTED.    

        Upon
any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of the properties and assets of the Company substantially
as an entirety in accordance with Section 7.1, the successor Person formed by such consolidation or into which the Company 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 Company under this Indenture with the same effect as if such successor Person had been named as the Company herein,
and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities. 

34

 

 
 

ARTICLE 8    
    
    DEFAULT AND REMEDIES    
    

        SECTION 8.1.    EVENTS OF DEFAULT.    

        An
"Event of Default" shall occur if: 

        (1)   the
Company defaults in the payment of any principal of (including, without limitation, any premium, if any, on) any Security when the same becomes due and payable
(whether at maturity, or otherwise), whether or not such payment shall be prohibited by the provisions of Article 5 hereof; 

        (2)   the
Company fails to perform any other covenant required of it in the Securities or this Indenture and such failure continues for the period and after the notice
specified below; or 

        (3)   the
Company, pursuant to or within the meaning of any Bankruptcy Law: 

        (A)  commences
a voluntary case or proceeding; 

        (B)  consents
to the entry of an order for relief against it in an involuntary case or proceeding; 

        (C)  consents
to the appointment of a Custodian of it or for all or substantially all of its property; or 

        (D)  makes
a general assignment for the benefit of its creditors; or 

        (4)   a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: 

        (A)  is
for relief against the Company in an involuntary case or proceeding; 

        (B)  appoints
a Custodian of the Company or for all or substantially all of the property of the Company; or 

        (C)  orders
the liquidation of the Company; 

and
in each case the order or decree remains unstayed and in effect for 60 consecutive days. 

        The
term "Bankruptcy Law" means Title 11 of the United States Code (or any successor thereto) or any similar federal or state law for the relief of debtors. The term "Custodian" means
any receiver, trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy Law. 

        A
default under clause (2) above is not an Event of Default until the Trustee notifies the Company, or the Holders of at least 25% in aggregate principal amount of the Securities
then outstanding notify the Company and the Trustee, in writing of the default, and the Company does not cure the default within 60 days after receipt of such notice. The notice given pursuant
to this Section 8.1 must specify the default, demand that it be remedied and state that the notice is a "Notice of Default." When any default under this Section 8.1 is cured, it ceases. 

        The
Trustee shall not be charged with knowledge of any Event of Default unless written notice thereof shall have been given to a Trust Officer at the Corporate Trust Office of the
Trustee by the Company, a Paying Agent, any Holder or any agent of any Holder. 

        SECTION 8.2.    ACCELERATION.    

        If
an Event of Default specified in clause (3) or (4) of Section 8.1 with respect to the Company occurs and is continuing, the Trustee may, by notice to the Company,
or the Holders of at least 25% in aggregate principal amount of the Securities then outstanding may, by notice to the Company and the Trustee, declare all unpaid principal to the date of acceleration
on the Securities then outstanding (if 

35

 

not
then due and payable) to be due and payable upon any such declaration, and the same shall become and be immediately due and payable. The Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to the Trustee may rescind an acceleration and its consequences if (a) all existing Events of Default, other than the nonpayment of the principal of the
Securities which has become due solely by such declaration of acceleration, have been cured or waived; (b) the rescission would not conflict with any judgment or decree of a court of competent
jurisdiction; and (c) all payments due to the Trustee and any predecessor Trustee under Section 9.7 have been made. No such rescission shall affect any subsequent default or impair any
right consequent thereto. 

        SECTION 8.3.    OTHER REMEDIES.    

        If
an Event of Default occurs and is continuing, the Trustee may, but shall not be obligated to, pursue any available remedy by proceeding at law or in equity to collect the payment of
the principal of the Securities or to enforce the performance of any provision of the Securities or this Indenture. 

        The
Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any
Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the extent permitted by law. 

        SECTION 8.4.    WAIVER OF DEFAULTS AND EVENTS OF DEFAULT.    

        Subject
to Sections 8.7 and 11.2, the Holders of a majority in aggregate principal amount of the Securities then outstanding by notice to the Trustee may waive an existing default or
Event of Default and its consequences, except a default or Event of Default in the payment of the principal of or premium, if any, on any Security, a failure by the Company to convert any Securities
into Common Stock or any default or Event of Default in respect of any provision of this Indenture or the Securities which, under Section 11.2, cannot be modified or amended without the consent
of the Holder of each Security affected. When a default or Event of Default is waived, it is cured and ceases. 

        SECTION 8.5.    CONTROL BY MAJORITY.    

        The
Holders of a majority in aggregate principal amount of the Securities then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that the Trustee determines may be
unduly prejudicial to the rights of another Holder or the Trustee, or that may involve the Trustee in personal liability unless the Trustee is offered indemnity reasonably satisfactory to it;  provided,
however, that the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction. 

        SECTION 8.6.    LIMITATIONS ON SUITS.    

        A
Holder may not pursue any remedy with respect to this Indenture or the Securities (except actions for payment of overdue principal, premium, if any, or Additional Interest, if any, on,
or for the conversion of, the Securities pursuant to Article 4) unless: 

        (1)   the
Holder gives to the Trustee written notice of a continuing Event of Default; 

        (2)   the
Holders of at least 25% in aggregate principal amount of the then outstanding Securities make a written request to the Trustee to pursue the remedy; 

        (3)   such
Holder or Holders offer to the Trustee reasonable indemnity to the Trustee against any loss, liability or expense; 

36

 

        (4)   the
Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and 

        (5)   no
direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in aggregate
principal amount of the Securities then outstanding. 

        A
Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over such other Securityholder. 

        SECTION 8.7.    RIGHTS OF HOLDERS TO RECEIVE PAYMENT AND TO CONVERT.    

        Notwithstanding
any other provision of this Indenture, the right of any Holder of a Security to receive payment of the principal of the Security, on or after the respective due dates
expressed in the Security and this Indenture, to convert such Security in accordance with Article 4 and to bring suit for the enforcement of any such payment on or after such respective dates
or the right to convert, is absolute and unconditional and shall not be impaired or affected without the consent of the Holder. 

        SECTION 8.8.    COLLECTION SUIT BY TRUSTEE.    

        If
an Event of Default in the payment of principal specified in clause (1) of Section 8.1 occurs and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company or another obligor on the Securities for the whole amount of principal and such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. 

        SECTION 8.9.    TRUSTEE MAY FILE PROOFS OF CLAIM.    

        The
Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Company (or any other obligor
on the Securities), its creditors or its property and shall be entitled and empowered to collect and receive any money or other property payable or deliverable on any such claims and to distribute the
same, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 9.7, and to the extent that such payment of the reasonable compensation, expenses, disbursements and advances in any such proceedings shall be denied for
any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other property which the Holders may be entitled to
receive in such proceedings, whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or
consent to, or, on behalf of any Holder, to authorize, accept or adopt any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof,
or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. 

        SECTION 8.10.    PRIORITIES.    

        If
the Trustee collects any money pursuant to this Article 8, it shall pay out the money in the following order: 

        First,
to the Trustee for amounts due under Section 9.7; 

        Second,
to the holders of Senior Indebtedness to the extent required by Article 5; 

37

 

        Third,
to Holders for amounts due and unpaid on the Securities for principal and Additional Interest, if any, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal and Additional Interest, if any, respectively; and 

        Fourth,
the balance, if any, to the Company. 

        The
Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 8.10. 

        SECTION 8.11.    UNDERTAKING FOR COSTS.    

        In
any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion
may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorney's
fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 8.11 does not apply
to a suit made by the Trustee, a suit by a Holder pursuant to Section 8.7, or a suit by Holders of more than 10% in aggregate principal amount of the Securities then outstanding. 

 
 

ARTICLE 9    
    
    TRUSTEE    
    

        SECTION 9.1.    DUTIES OF TRUSTEE.    

        (a)   If
an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of
care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. 

        (b)   Except
during the continuance of an Event of Default: 

        (1)   the
Trustee need perform only those duties as are specifically set forth in this Indenture and no others; and 

        (2)   in
the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. The Trustee, however, shall examine any certificates and opinions which by any provision hereof
are specifically required to be delivered to the Trustee to determine whether or not they conform to the requirements of this Indenture. 

        (c)   The
Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: 

        (1)   this
paragraph does not limit the effect of subsection (b) of this Section 9.1; 

        (2)   the
Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts; and 

        (3)   the
Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to
Section 8.5. 

        (d)   No
provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers unless the Trustee shall have received indemnity reasonably satisfactory to it against potential costs and liabilities incurred by it
relating thereto. 

38

 

        (e)   Every
provision of this Indenture that in any way relates to the Trustee is subject to subsections (a), (b), (c) and (d) of this Section 9.1. 

        (f)    The
Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee
need not be segregated from other funds except to the extent required by law. 

        SECTION 9.2.    RIGHTS OF TRUSTEE.    

        Subject
to Section 9.1: 

        (a)   The
Trustee may rely conclusively on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document. 

        (b)   Before
the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel, which shall conform to Section 12.4(b). The
Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion. 

        (c)   The
Trustee may act through its agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. 

        (d)   The
Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers. 

        (e)   The
Trustee may consult with counsel of its selection, and the advice or opinion of such counsel as to matters of law shall be full and complete authorization and
protection in respect of any such action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. 

        (f)    The
Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders
pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred
by it in compliance with such request or direction. 

        (g)   The
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 Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation. 

        (h)   The
Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written
notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office, and such notice references the Securities and this Indenture. 

        (i)    The
rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall
be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder. 

39

  

        SECTION 9.3.    INDIVIDUAL RIGHTS OF TRUSTEE.    

        The
Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate of the Company with the same
rights it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Sections 9.10 and 9.11. 

        SECTION 9.4.    TRUSTEE'S DISCLAIMER.    

        The
Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company's use of the proceeds from the
Securities, and it shall not be responsible for any statement in the Securities other than its certificate of authentication. 

        SECTION 9.5.    NOTICE OF DEFAULT OR EVENTS OF DEFAULT.    

        If
a default or an Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to each Securityholder notice of the default or Event of Default
within 90 days after it occurs. However, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in the
interests of Securityholders, except in the case of a default or an Event of Default in payment of the principal of any Security. 

        SECTION 9.6.    REPORTS BY TRUSTEE TO HOLDERS.    

        If
such report is required by TIA Section 313, within 60 days after each June 15, beginning with June 15, 2004, the Trustee shall mail to each Securityholder
a brief report dated as of such June 15 that complies with TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b)(2) and (c). 

        A
copy of each report at the time of its mailing to Securityholders shall be mailed to the Company and filed with the SEC and each stock exchange, if any, on which the Securities are
listed. The Company shall notify the Trustee whenever the Securities become listed on any stock exchange or listed or admitted to trading on
any quotation system and any changes in the stock exchanges or quotation systems on which the Securities are listed or admitted to trading and of any delisting thereof. 

        SECTION 9.7.    COMPENSATION AND INDEMNITY.    

        The
Company shall pay to the Trustee from time to time such compensation (as agreed to from time to time by the Company and the Trustee in writing) for its services (which compensation
shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust). The Company shall reimburse the Trustee upon request for all reasonable disbursements,
expenses and advances incurred or made by it. Such expenses may include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. 

        The
Company shall indemnify the Trustee or any predecessor Trustee (which for purposes of this Section 9.7 shall include its officers, directors, employees and agents) for, and
hold it harmless against, any and all loss, liability or expense including taxes (other than taxes based upon, measured by or determined by the income of the Trustee), (including reasonable legal fees
and expenses) incurred by it in connection with the acceptance or administration of its duties under this Indenture or any action or failure to act as authorized or within the discretion or rights or
powers conferred upon the Trustee hereunder including the reasonable costs and expenses of the Trustee and its counsel in defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The Trustee shall notify the Company promptly of any claim asserted against the Trustee for which it may seek indemnity. The Company
need not pay for any settlement effected without its prior written consent, which shall not be unreasonably withheld. 

        The
Company need not reimburse the Trustee for any expense or indemnify it against any loss or liability incurred by it resulting from its gross negligence or bad faith. 

        To
secure the Company's payment obligations in this Section 9.7, the Trustee shall have a senior claim to which the Securities are hereby made subordinate on all money or property
held or collected by the Trustee, except such money or property held in trust to pay the principal of, and Additional Interest, if any, on the Securities. The obligations of the Company under this
Section 9.7 shall survive the satisfaction and discharge of this Indenture or the resignation or removal of the Trustee. 

40

 

        When
the Trustee incurs expenses or renders services after an Event of Default specified in clause (3) or (4) of Section 8.1 occurs, the expenses and the
compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. The provisions of this Section shall survive the termination of this Indenture. 

        SECTION 9.8.    REPLACEMENT OF TRUSTEE.    

        The
Trustee may resign by so notifying the Company. The Holders of a majority in aggregate principal amount of the Securities then outstanding may remove the Trustee by so notifying the
Trustee and may, with the Company's written consent, appoint a successor Trustee. The Company may remove the Trustee if: 

        (1)   the
Trustee fails to comply with Section 9.10; 

        (2)   the
Trustee is adjudged a bankrupt or an insolvent; 

        (3)   a
receiver or other public officer takes charge of the Trustee or its property; or 

        (4)   the
Trustee becomes incapable of acting. 

        If
the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. The resignation or removal of
a Trustee shall not be effective until a successor Trustee shall have delivered the written acceptance of its appointment as described below. 

        If
a successor Trustee does not take office within 45 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of 10% in principal
amount of the Securities then outstanding may petition any court of competent jurisdiction for the appointment of a successor Trustee at the expense of the Company. 

        If
the Trustee fails to comply with Section 9.10, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee. 

        A
successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after that, the retiring Trustee shall transfer all
property held by it as Trustee to the successor Trustee and be released from its obligations (exclusive of any liabilities that the retiring Trustee may have incurred while acting as Trustee)
hereunder, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. A
successor Trustee shall mail notice of its succession to each Holder. 

        A
retiring Trustee shall not be liable for the acts or omissions of any successor Trustee after its succession. 

        Notwithstanding
replacement of the Trustee pursuant to this Section 9.8, the Company's obligations under Section 9.7 shall continue for the benefit of the retiring Trustee. 

        SECTION 9.9.    SUCCESSOR TRUSTEE BY MERGER, ETC.    

        If
the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust assets (including the administration of this Indenture) to,
another corporation, the resulting, surviving or transferee corporation, without any further act, shall be the successor Trustee, provided such transferee corporation shall qualify and be eligible
under Section 9.10. Such successor Trustee shall promptly mail notice of its succession to the Company and each Holder. 

        SECTION 9.10.    ELIGIBILITY; DISQUALIFICATION.    

        The
Trustee shall always satisfy the requirements of paragraphs (1), (2) and (5) of TIA Section 310(a). The Trustee (or its parent holding company) shall have a
combined capital and surplus of at least $50,000,000. If at any time the Trustee shall cease to satisfy any such requirements, it shall resign immediately in the manner and with the effect specified
in this Article 9. The Trustee shall be subject to the provisions of TIA Section 310(b). Nothing herein shall prevent the Trustee from filing with the SEC the application referred to in
the penultimate paragraph of TIA Section 310(b). 

41

 

        SECTION 9.11.    PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.    

        The
Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be
subject to TIA Section 311(a) to the extent indicated therein. 

 
 

ARTICLE 10    
    
    SATISFACTION AND DISCHARGE OF INDENTURE    
    

        SECTION 10.1.    SATISFACTION AND DISCHARGE OF INDENTURE.    

        This
Indenture shall cease to be of further effect (except as to any surviving rights of conversion, registration of transfer or exchange of Securities herein expressly provided for and
except as further provided below), and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when 

        (1)   either

        (A)  all
Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 2.7 and (ii) Securities for whose payment money has theretofore been deposited in trust and thereafter repaid to the Company as provided in Section 10.3)
have been delivered to the Trustee for cancellation; or 

        (B)  all
such Securities not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and payable at the
Final Maturity Date within one year, and the Company has irrevocably deposited or caused to be irrevocably deposited cash with the Trustee or a Paying Agent (other than the Company or any of its
Affiliates) as trust funds in trust for the purpose of and in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for
cancellation, for principal and Additional Interest, if any, to the date of such deposit (in the case of Securities which have become due and payable) or the Final Maturity Date; 

        (2)   the
Company has paid or caused to be paid all other sums payable hereunder by the Company; and 

        (3)   the
Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein relating to the
satisfaction and discharge of this Indenture have been complied with. 

        Notwithstanding
the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 9.7 shall survive and, if money shall have been
deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section, the provisions of Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.12, and 12.5, Article 4, the last
paragraph of Section 6.2 and this Article 10, shall survive until the Securities have been paid in full. 

        SECTION 10.2.    APPLICATION OF TRUST MONEY.    

        Subject
to the provisions of Section 10.3, the Trustee or a Paying Agent shall hold in trust, for the benefit of the Holders, all money deposited with it pursuant to
Section 10.1 and shall apply the deposited money in accordance with this Indenture and the Securities to the payment of the principal of and Additional Interest, if any, on the Securities.
Money so held in trust shall not be subject to the subordination provisions of Article 5. 

        SECTION 10.3.    REPAYMENT TO COMPANY.    

        The
Trustee and each Paying Agent shall promptly pay to the Company upon request any excess money (i) deposited with them pursuant to Section 10.1 and (ii) held by
them at any time. 

        The
Trustee and each Paying Agent shall pay to the Company upon request any money held by them for the payment of principal or Additional Interest, if any, that remains unclaimed for two
years after a right to such money has matured; provided, however, that the Trustee or such Paying Agent,
before being required to make any such payment, may at the expense of the Company cause to be mailed to each Holder entitled to 

42

 

such
money notice that such money remains unclaimed and that after a date specified therein, which shall be at least 30 days from the date of such mailing, any unclaimed balance of such money
then remaining will be repaid to the Company. After payment to the Company, Holders entitled to money must look to the Company for payment as general creditors unless an applicable abandoned property
law designates another person. 

        SECTION 10.4.    REINSTATEMENT.    

        If
the Trustee or any Paying Agent is unable to apply any money in accordance with Section 10.2 by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this Indenture and the Securities shall be revived and reinstated
as though no deposit had occurred pursuant to Section 10.1 until such time as the Trustee or such Paying Agent is permitted to apply all such money in accordance with Section 10.2;  provided,
however, that if the Company has made any payment of the principal of or Additional Interest,
if any, on any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive any such payment from the money
held by the Trustee or such Paying Agent. 

 
 

ARTICLE 11    
    
    AMENDMENTS, SUPPLEMENTS AND WAIVERS    
    

        SECTION 11.1.    WITHOUT CONSENT OF HOLDERS.    

        The
Company and the Trustee may amend or supplement this Indenture or the Securities without notice to or consent of any Securityholder: 

        (a)   to
comply with Sections 4.11 and 7.1; 

        (b)   to
cure any ambiguity, defect or inconsistency; 

        (c)   to
make any other change that does not adversely affect the rights of any Securityholder; 

        (d)   to
comply with the provisions of the TIA; 

        (e)   to
add to the covenants of the Company for the equal and ratable benefit of the Securityholders or to surrender any right, power or option conferred upon the Company; or 

        (f)    to
appoint a successor Trustee. 

        SECTION 11.2.    WITH CONSENT OF HOLDERS.    

        The
Company and the Trustee may amend or supplement this Indenture or the Securities with the written consent of the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding. The Holders of at least a majority in aggregate principal amount of the Securities then outstanding may waive compliance in a particular instance by the Company with any
provision of this Indenture or the Securities without notice to any Securityholder. However, notwithstanding the foregoing but subject to Section 11.4, without the written consent of each
Securityholder affected, an amendment, supplement or waiver, including a waiver pursuant to Section 8.4, may not: 

        (a)   change
the stated maturity of the principal of any Security; 

        (b)   reduce
the principal amount of, or any premium on, any Security; 

        (c)   reduce
the amount of principal payable upon acceleration of the maturity of any Security; 

        (d)   change
the place or currency of payment of principal of, or any premium on, any Security; 

        (e)   impair
the right to institute suit for the enforcement of any payment on, or with respect to, any Security; 

        (f)    modify
the subordination provisions of Article 5 in a manner materially adverse to the Holders of Securities; 

        (g)   adversely
affect the right of Holders to convert Securities other than as provided in or under Article 4 of this Indenture; 

43

 

        (h)   reduce
the percentage of the aggregate principal amount of the outstanding Securities whose Holders must consent to a modification or amendment of this Indenture; 

        (i)    reduce
the percentage of the aggregate principal amount of the outstanding Securities necessary for the waiver of compliance with certain provisions of this Indenture or
the waiver of certain defaults under this Indenture; and 

        (j)    modify
any of the provisions of this Section or Section 8.4, except to increase any such percentage or to provide that certain provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each outstanding Security affected thereby. 

        It
shall not be necessary for the consent of the Holders under this Section 11.2 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be
sufficient if such consent approves the substance thereof. 

        After
an amendment, supplement or waiver under this Section 11.2 becomes effective, the Company shall mail to the Holders affected thereby a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplement
or waiver. An amendment or supplement under this Section 11.2 or under Section 11.1 may not make any change that adversely affects the rights under Article 5 of any holder of an
issue of Senior Indebtedness unless the holders of that issue, pursuant to its terms, consent to the change. 

        SECTION 11.3.    COMPLIANCE WITH TRUST INDENTURE ACT.    

        Every
amendment to or supplement of this Indenture or the Securities shall comply with the TIA as in effect at the date of such amendment or supplement. 

        SECTION 11.4.    REVOCATION AND EFFECT OF CONSENTS.    

        Until
an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the
consent as to its Security or portion of a
Security if the Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective. 

        After
an amendment, supplement or waiver becomes effective, it shall bind every Securityholder, unless it makes a change described in any of clauses (a) through (j) of
Section 11.2. In that case the amendment, supplement or waiver shall bind each Holder of a Security who has consented to it and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder's Security. 

        SECTION 11.5.    NOTATION ON OR EXCHANGE OF SECURITIES.    

        If
an amendment, supplement or waiver changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Security about the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall
issue and the Trustee shall authenticate a new Security that reflects the changed terms. 

        SECTION 11.6.    TRUSTEE TO SIGN AMENDMENTS, ETC.    

        The
Trustee shall sign any amendment or supplemental indenture authorized pursuant to this Article 11 if the amendment or supplemental indenture does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, in its sole discretion, but need not sign it. In signing or refusing to sign such amendment or supplemental
indenture, the Trustee shall be entitled to receive and, subject to Section 9.1, shall be fully protected in relying upon, an Opinion of Counsel stating that such amendment or supplemental
indenture is authorized or permitted by this Indenture. The Company may not sign an amendment or supplement indenture until the Board of Directors approves it. 

44

 

        SECTION 11.7.    EFFECT OF SUPPLEMENTAL INDENTURES.    

        Upon
the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. 

 
 

ARTICLE 12    
    
    MISCELLANEOUS    
    

        SECTION 12.1.    TRUST INDENTURE ACT CONTROLS.    

        If
any provision of this Indenture limits, qualifies or conflicts with the duties imposed by any of Sections 310 to 317, inclusive, of the TIA through operation of Section 318(c)
thereof, such imposed duties shall control. 

        SECTION 12.2.    NOTICES.    

        Any
demand, authorization notice, request, consent or communication shall be given in writing and delivered in person or mailed by first-class mail, postage prepaid, addressed as follows
or transmitted by facsimile transmission (confirmed by delivery in person or mail by first-class mail, postage prepaid, or by guaranteed overnight courier) to the following facsimile numbers: 

If
to the Company, to: 

Silicon
Valley Bancshares

3003 Tasman Drive

Santa Clara, California 95054

Attention: Lauren A. Friedman

Facsimile No.: (408) 496-2405 

if
to the Trustee, to: 

Wells
Fargo Bank Minnesota, National Association

MAC N9303-110

Sixth and Marquette Avenue

Minneapolis, MN 55479

Attention: Michael T. Lechner

Facsimile No.: (612) 667-2160 

        Such
notices or communications shall be effective when received. 

        The
Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. 

        Any
notice or communication mailed to a Securityholder shall be mailed by first-class mail or delivered by an overnight delivery service to it at its address shown on the register kept
by the Primary Registrar. 

        Failure
to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. If a notice or communication to
a Securityholder is mailed in the manner provided above, it is duly given, whether or not the addressee receives it. 

        SECTION 12.3.    COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.    

        Securityholders
may communicate pursuant to TIA Section 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the
Trustee, the Registrar and any other person shall have the protection of TIA Section 312(c). 

45

 

        SECTION 12.4.    CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.    

        (a)   Upon
any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee at the request of the
Trustee: 

        (1)   an
Officers' Certificate stating that, in the opinion of the signers, all conditions precedent (including any covenants, compliance with which constitutes a condition
precedent), if any, provided for in this Indenture relating to the proposed action have been complied with; and 

        (2)   an
Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent (including any covenants, compliance with which constitutes a condition
precedent) have been complied with. 

        (b)   Each
Officers' Certificate and Opinion of Counsel with respect to compliance with a condition or covenant provided for in this Indenture shall include: 

        (1)   a
statement that the person making such certificate or opinion has read such covenant or condition; 

        (2)   a
brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are
based; 

        (3)   a
statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion
as to whether or not such covenant or condition has been complied with; and 

        (4)   a
statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with; 

provided however, that with respect to matters of fact an Opinion of Counsel may rely on an Officers' Certificate or certificates of public officials. 

        SECTION 12.5.    RECORD DATE FOR VOTE OR CONSENT OF SECURITYHOLDERS.    

        The
Company (or, in the event deposits have been made pursuant to Section 10.1, the Trustee) may set a record date for purposes of determining the identity of Holders entitled to
vote or consent to any action by vote or consent authorized or permitted under this Indenture, which record date shall not be more than thirty (30) days prior to the date of the commencement of
solicitation of such action. Notwithstanding the provisions of Section 11.4, if a record date is fixed, those persons who were Holders of Securities at the close of business on such record date
(or their duly designated proxies), and only those persons, shall be entitled to take such action by vote or consent or to revoke any vote or consent previously given, whether or not such persons
continue to be Holders after such record date. 

        SECTION 12.6.    RULES BY TRUSTEE, PAYING AGENT, REGISTRAR AND CONVERSION AGENT.    

        The
Trustee may make reasonable rules (not inconsistent with the terms of this Indenture) for action by or at a meeting of Holders. Any Registrar, Paying Agent or Conversion Agent may
make reasonable rules for its functions. 

        SECTION 12.7.    LEGAL HOLIDAYS.    

        A
"Legal Holiday" is a Saturday, Sunday or a day on which state or federally chartered banking institutions in New York, New York and the state in which the Corporate Trust Office is
located are not required to be open. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no Additional Interest, if any, shall
accrue for the intervening period. If a Record Date is a Legal Holiday, the Record Date shall not be affected. 

        SECTION 12.8.    GOVERNING LAW.    

        This
Indenture and the Securities shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts of laws. 

46

 

        SECTION 12.9.    NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.    

        This
Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary of the Company. Any such indenture, loan or debt agreement may not be
used to interpret this Indenture. 

        SECTION 12.10.    NO RECOURSE AGAINST OTHERS.    

        All
liability described in paragraph 14 of the Securities of any director, officer, employee or shareholder, as such, of the Company is waived and released. 

        SECTION 12.11.    SUCCESSORS.    

        All
agreements of the Company in this Indenture and the Securities shall bind its successor. All agreements of the Trustee in this Indenture shall bind its successor. 

        SECTION 12.12.    MULTIPLE COUNTERPARTS.    

        The
parties may sign multiple counterparts of this Indenture. Each signed counterpart shall be deemed an original, but all of them together represent the same agreement. 

        SECTION 12.13.    SEPARABILITY.    

        In
case any provisions in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby. 

        SECTION 12.14.    TABLE OF CONTENTS, HEADINGS, ETC.    

        The
table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a
part hereof, and shall in no way modify or restrict any of the terms or provisions hereof. 

[SIGNATURE
PAGE FOLLOWS] 

47

 

        IN
WITNESS WHEREOF, the parties hereto have hereunto set their hands as of the date and year first above written. 

	 	 	SILICON VALLEY BANCSHARES
	

 	
 	

By:	

/s/  LAUREN A. FRIEDMAN      

	 	 	Name:	Lauren A. Friedman
	 	 	Title:	Chief Financial Officer
	

 	
 	
WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
	

 	
 	

By:	

/s/  MICHAEL T. LECHNER      

	 	 	Name:	Michael T. Lechner
	 	 	Title:	Assistant Vice President

48

  

 
 

EXHIBIT A
  [FORM OF FACE OF SECURITY]    
    

        THIS SECURITY IS NOT A SAVINGS ACCOUNT, DEPOSIT OR OTHER OBLIGATION OF ANY BANK OR NONBANK SUBSIDIARY AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, OR OTHER GOVERNMENT ENTITY. 

        [UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO SILICON VALLEY BANCSHARES OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.](1) 

	(1)
	These
paragraphs should be included only if the Security is a Global Security. 

        [THIS
SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND
THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.](2) 

	(2)
	These
paragraphs to be included only if the Security is a Restricted Security. 

        [THE
HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN 

A-1

 

EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY CASE, THE HOLDER
HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTIONS WITH REGARD TO THIS SECURITY EXCEPT AS PERMITTED UNDER THE SECURITIES ACT.](2) 

        [THE
HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS AGREEMENT (AS SUCH TERM IS DEFINED IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF) AND,
BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.](2) 

	(2)
	These
paragraphs to be included only if the Security is a Restricted Security. 

A-2

 
 
 

SILICON VALLEY BANCSHARES    
    

	CUSIP: 827064 AB 2	 	R-            

ZERO COUPON CONVERTIBLE SUBORDINATED NOTES DUE JUNE 15, 2008  

        Silicon Valley Bancshares, a Delaware corporation (the "Company", which term shall include any successor corporation under the Indenture referred to on the
reverse hereof), promises to pay
to                                         
       , or registered assigns, the principal sum of                        Dollars
($                        ) on June 15, 2008 [or such
greater or lesser amount as is indicated on the Schedule of Exchanges of Notes on the other side of this Note].(3) 

	(3)
	This
phrase should be included only if the Security is a Global Security. 

Additional
Interest Payment Dates: June 15 and December 15 

Record
Dates for Additional Interest Payment Dates: June 1 and December 1 

        This
Note is convertible as specified on the other side of this Note. Additional provisions of this Note are set forth on the other side of this Note. 

SIGNATURE
PAGE FOLLOWS 

A-3

 

        IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed. 

	 	 	SILICON VALLEY BANCSHARES
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	Title:	 

       

	Attest:	 	 	 
	

 Name:

Title:	

 
	

Dated:	

 
	

Trustees Certificate of Authentication: This is one of the Securities referred to in the within-mentioned Indenture.	

 
	

 as Trustee	

,
	

 Authorized Signatory	

 
	

By:	
 	

 	

 

A-4

  

 
 

[FORM OF REVERSE SIDE OF SECURITY]    
    
    SILICON VALLEY BANCSHARES
  ZERO COUPON CONVERTIBLE SUBORDINATED NOTES DUE JUNE 15, 2008    
    

	1.
	INTEREST

        Silicon
Valley Bancshares, a Delaware corporation (the "Company," which term shall include any successor corporation under the Indenture hereinafter referred to), will not pay interest
on the principal amount of this Note other than any Additional Interest accrued or payable as provided in the Registration Rights Agreement. 

	2.
	METHOD
OF PAYMENT 

        The
Company shall pay Additional Interest, if any, on this Note semiannually on June 15 and December 15 to the person who is the Holder of this Note at the close of
business on June 1 or December 1, as the case may be, next preceding the related Additional Interest Payment Date. The Holder must surrender this Note to a Paying Agent to collect
payment of principal. The Company will pay principal and Additional Interest, if any, in money of the United States that at the time of payment is legal tender for payment of public and private debts.
The Company may, however, pay principal and Additional Interest, if any, in respect of any Certificated Security by check or wire payable in such money;  provided, however, that a Holder with an aggregate principal amount in excess of $2,000,000 will be paid
by wire transfer in immediately available funds at the election of such Holder if such Holder has provided wire transfer instructions to the Company. The company may mail a check for Additional
Interest, if any, to the Holder's registered address. Notwithstanding the foregoing, so long as this Note is registered in the name of a Depositary or its nominee, all payments hereon shall be made by
wire transfer of immediately available funds to the account of the Depositary or its nominee. 

	3.
	PAYING
AGENT, REGISTRAR AND CONVERSION AGENT 

        Initially,
Wells Fargo Bank Minnesota, National Association (the "Trustee", which term shall include any successor trustee under the Indenture hereinafter referred to) will act as Paying
Agent, Registrar and Conversion Agent. The Company may change any Paying Agent, Registrar or Conversion Agent without notice to the Holder. The Company or any of its Subsidiaries may, subject to
certain limitations set forth in the Indenture, act as Paying Agent or Registrar. 

	4.
	INDENTURE,
LIMITATIONS 

        This
Note is one of a duly authorized issue of Securities of the Company designated as its Zero Coupon Convertible Subordinated Notes due June 15, 2008 (the "Notes"), issued under
an Indenture dated as of May 20, 2003 (together with any supplemental indentures thereto, the "Indenture"), between the Company and the Trustee. The terms of this Note include those stated in
the Indenture and those required by or made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended, as in effect on the date of the Indenture. This Note is subject to all
such terms, and the Holder of this Note is referred to the Indenture and said Act for a statement of them. 

        The
Notes are subordinated unsecured obligations of the Company limited to $150,000,000 aggregate principal amount. The Indenture does not limit other debt of the Company, secured or
unsecured, including Senior Indebtedness. 

	5.
	CONVERSION

        (a)   To
convert a Note, a Holder must (i) complete and manually sign the conversion notice set forth below and deliver such notice to a Conversion Agent,
(ii) surrender the Note to a Conversion Agent, (iii) furnish appropriate endorsements and transfer documents if required by a Registrar or a Conversion Agent, and (iv) pay any
transfer or similar tax, if required. A Holder may convert a portion of a Note equal to $1,000 or any integral multiple thereof. 

A-5

 

        (b)   Subject
to the provisions of the Indenture, a Holder of this Note may convert the principal amount of this Note (or any portion thereof equal to $1,000 or any integral
multiple of $1,000 in excess thereof) into Common Stock, at the Conversion Price then in effect, if: 

        (1)   at
any time on or before June 15, 2007, the Closing Price of the Common Stock for the last Trading Day of the immediately preceding fiscal quarter of the Company
was 110% or more of the then current Conversion Price on the Notes; 

        (2)   at
any time after June 15, 2007 and prior to the Final Maturity Date, the Closing Price of the Common Stock on the immediately preceding Trading Day was 110% or
more of the then current Conversion Price on the Notes; 

        (3)   the
Company distributes to all or substantially all holders of Common Stock rights or warrants entitling them to purchase Common Stock at less than the Closing Price of
the Common Stock on the last Trading Day preceding the declaration for such distribution; 

        (4)   the
Company distributes to all or substantially all holders of Common Stock cash or other assets, debt securities or rights or warrants to purchase the Company's
securities, which distribution has a per share value as determined by the Board of Directors exceeding 10% of the Closing Price of the Common Stock on the last Trading Day preceding the declaration
for such distribution; or 

        (5)   the
Company becomes a party to a consolidation, merger or sale of all or substantially all of the Company's assets or a Corporate Event occurs, in each case, pursuant to
which the Common Stock would be converted into cash, stock or other property unless in the case of a consolidation or merger all of the consideration, excluding cash payments for fractional shares and
cash payments made pursuant to dissenters' appraisal rights, in such merger or consolidation consists of shares of common stock, American Depository Shares or other certificates representing common
equity interests traded on a United States national securities exchange or quoted on The Nasdaq National Market, or will be so traded or quoted when issued or exchanged in connection with such merger
or consolidation, and as a result of such merger or consolidation the Notes become convertible solely into such common stock, American Depository Shares or other certificates representing common
equity interests. 

In
the case of a distribution contemplated by clauses (3) and (4) above, the Company will notify Holders at least 20 days prior to the ex-dividend date for such
distribution (the "Distribution Notice"). Once the Company has given the Distribution Notice, Holders may surrender Notes for conversion at any time until the earlier of the close of business on the
Business Day prior to the ex-dividend date or the Company's announcement that such distribution will not take place. Notwithstanding the foregoing, in the event of a distribution
contemplated by clauses (3) and (4) above, Holders may not convert Notes if the Holders may participate in such distribution without converting their Notes. In the event of a
consolidation, merger, asset sale or Corporate Event contemplated by clause (5) above, the Company will notify Holders at least 20 days prior to the anticipated closing date of such
transaction (the "Merger Notice"). Once the Company has given the Merger Notice, the Holders may, in the event of such consolidation, merger, asset sale or Corporate Event, and subject to
Section 4.2(b) of the Indenture, surrender Notes for conversion at any time from and after the date which is 15 days prior to the anticipated closing date of such transaction until the
date which is 15 days after the actual closing date of such transaction. 

        (c)   Subject
to the provisions of the Indenture, a Holder of this Note may also convert the principal amount of such Note (or any portion thereof equal to $1,000 or any
integral multiple of $1,000 in excess thereof) into Common Stock, at the Conversion Price then in effect: 

        (1)   at
any time prior to June 15, 2006 after any five (5) consecutive Trading Day period in which the average Trading Prices for the Notes for such five
(5) Trading Day period was less than 103% of the average Conversion Value for the Notes during such period; and 

        (2)   at
any time on or after June 15, 2006 and prior to the Final Maturity Date, after any five (5) consecutive Trading Day period in which the average Trading
Prices for the Notes for such five (5) Trading Day period was less than 97% of the average Conversion Value for the Notes during such period;  provided, however, a Holder may not convert a Note on or after June 15, 2006 pursuant to this
clause (2) if, at the time of the calculation, the Closing Price of shares of Common Stock is between the then current Conversion Price of the Notes and 110% of the then current Conversion
Price of the Notes. 

A-6

 

        Upon
the occurrence of the circumstances described in either clause (1) or (2) above, a Holder may surrender Notes for conversion at any time beginning on the date on which
the Notes become convertible as a result of such occurrence through and including the close of business on the later of (x) ten (10) Trading Days after the Notes become convertible as a
result of such occurrence and (y) the Business Day prior to the first Trading Day on which the average Conversion Value for the Notes for a five (5) consecutive Trading Day period
exceeds the 103% or 97% Conversion Value thresholds, as the case may be. 

        (d)   The
initial Conversion Price is $33.6277 per share, subject to adjustment under certain circumstances as provided in the Indenture. The number of shares of Common Stock
issuable upon conversion of a Note is determined by dividing the principal amount of the Note or portion thereof converted by the Conversion Price in effect on the Conversion Date. No fractional
shares will be issued upon conversion; in lieu thereof, an amount will be paid in cash based upon the Closing Price (as defined in the Indenture) of the Common Stock on the Trading Day immediately
prior to the Conversion Date. 

        (e)   As
soon as practicable after the Conversion Date, the Company shall satisfy all of its obligations (the "Conversion Obligations") upon conversion of the Notes by
delivering to the Holder, at the Company's option and subject to the Company having received prior approval of the Federal Reserve if then required under applicable capital regulations, guidelines or
policies, either shares of Common Stock, cash or a combination of cash (such cash amount not to be less than the principal amount of the Securities converted) and shares of Common Stock, in the
following manner: 

        (1)   if
the Company elects to satisfy the entire Conversion Obligation in shares of Common Stock ("Share Settlement"), then the Company will deliver to the Holder shares of
Common Stock equal to the quotient of (A) the aggregate principal amount of Notes to be converted by the Holder divided by (B) the then applicable Conversion Price; 

        (2)   if
the Company elects to satisfy the entire Conversion Obligation in cash ("Cash Settlement"), then the Company will deliver to the Holder cash in an amount equal to the
product of (A) a number equal to the aggregate principal amount of Notes to be converted by such Holder divided by the then applicable Conversion Price, and (B) the arithmetic mean of
the Volume Weighted Average Prices of the Common
Stock on each Trading Day during the applicable cash settlement averaging period as provided below (the "Cash Settlement Averaging Period"); or 

        (3)   if
the Company elects to satisfy a portion of the Conversion Obligation in cash (the "Partial Cash Amount") and a portion in shares of Common Stock (together with the
Partial Cash Amount, a "Combined Settlement"), then the Company will deliver to the Holder such Partial Cash Amount plus a number of shares equal to (A) the cash settlement amount as set forth
in clause (2) above minus such Partial Cash Amount divided by (B) the arithmetic mean of the Volume Weighted Average Prices of the Common Stock on each Trading Day during the applicable
Cash Settlement Averaging Period as provided below. Under no circumstance shall the Partial Cash Amount paid by the Company be less than the principal amount of the Securities converted by the Holder. 

        (f)    If
the Company receives the conversion notice from a Holder on or prior to the day that is thirty (30) days prior to the Final Maturity Date, then the following
procedures shall apply: 

        (1)   If
the Company elects to satisfy the Conversion Obligation by Share Settlement, then settlement in shares will be made on or prior to the tenth (10th)
Trading Day following receipt of such conversion notice. 

        (2)   If
the Company elects to satisfy the Conversion Obligation by Cash Settlement or Combined Settlement, then the Company will notify the Holder, through the Trustee, of
the dollar amount to be satisfied in cash (which must be expressed either as one hundred percent (100%) of the Conversion Obligation or as a fixed dollar amount that is not less than the aggregate
principal amount of the Securities tendered for conversion) at any time on or before the date that is two Business Days following receipt of the notice of conversion (the "Settlement Notice Period").
Share Settlement will apply automatically if the Company does not notify the Holder that the Company has chosen another settlement method. 

        (3)   If
the Company timely elects Cash Settlement or Combined Settlement, then the Holder may retract the conversion notice at any time during the two (2) Business Day
period beginning on the day after the Settlement Notice Period (the "Conversion Retraction Period"). The Holder cannot retract the 

A-7

 

conversion
notice (and the conversion notice therefore will be irrevocable) if the Company elects Share Settlement. If the Holder has not retracted the conversion notice during the Conversion
Retraction Notice Period, then Cash Settlement or Combined Settlement will occur on the first Trading Day following the Cash Settlement Averaging Period. For purposes of this Section 5(f)(3),
the Cash Settlement Averaging Period will be the five (5) Trading Day period beginning on the first Trading Day after the Conversion Retraction Period. 

        (g)   If
the Company receives the conversion notice after the day that is thirty (30) days prior to the Final Maturity Date, then the following procedures will apply: 

        (1)   On
or prior to the day that is thirty (30) days prior to the Final Maturity Date, the Company may notify (the "Conversion Settlement Election Notice") the Holder,
through the Trustee, that the Company intends to satisfy all Conversion Obligations arising during such thirty (30) day period by either Cash Settlement or
Combined Settlement, and the Company will state in the Conversion Settlement Election Notice the fixed dollar amount of cash that will be delivered to the Holder, which will not be less than the
aggregate principal amount of the Notes that the Holder tenders for conversion. Share Settlement will apply automatically if the Company does not deliver to the Holder the Conversion Settlement
Election Notice on or prior to the day that is thirty (30) days prior to the Final Maturity Date. The Company will settle all conversions of Securities in the same manner. The Holder cannot
retract the conversion notice if the Holder delivers such notice after the day that is thirty (30) days prior to the Final Maturity Date (and the conversion notice therefore will be
irrevocable). 

        (2)   If
the Company has timely elected Cash Settlement or Combined Settlement, then with respect to all subsequent conversions, settlement amounts will be computed as set
forth above, except that the "Cash Settlement Averaging Period" will be the twenty (20) Trading Day period that begins on the date that is the twenty-second (22nd) Trading Day
expected to occur prior to the Final Maturity Date and that ends no later than the Trading Day immediately preceding the Final Maturity Date. However, if twenty (20) Trading Days do not occur
after such date and prior to the Final Maturity Date, then the Cash Settlement Averaging Period will be the number of Trading Days that do occur prior to the Final Maturity Date. 

        (3)   Settlement
(in shares and/or cash) will occur on or prior to the fifth (5th) Trading Day following the Final Maturity Date (or, if the Final Maturity Date
is not a Trading Day, on the first Trading Day after such five (5) Trading Day period). 

        (h)   If
an Event of Default (other than an Event of Default in a cash payment upon conversion of the Notes) has occurred and is continuing, the Company may not pay cash upon
conversion of any Note or portion of a Note (other than cash for fractional shares). 

        (i)    Anything
herein to the contrary notwithstanding, in the case of Global Securities, conversion notices may be delivered and such Global Securities may be surrendered for
conversion in accordance with the Applicable Procedures as in effect from time to time. 

        To
the extent that any Securities are surrendered for conversion (in whole or in part) during the period from the close of business on any Record Date to the opening of business on the
next succeeding Additional Interest Payment Date, if any, the Company shall be entitled to direct the Paying Agent to take any and all actions consistent with custom and practice in order to prevent
the payment of Additional Interest in excess of the amounts provided in the Registration Rights Agreement. 

	6.
	SUBORDINATION

        The
indebtedness evidenced by the Notes is, to the extent and in the manner provided in the Indenture, subordinate and junior in right of payment to the prior payment in full of all
Senior Indebtedness of the Company whether outstanding at the date of the Indenture or thereafter incurred. Any Holder by accepting this Note agrees to and shall be bound by such subordination
provisions and authorizes the Trustee to give them effect. In addition to all other rights of Senior Indebtedness described in the Indenture, the Senior Indebtedness shall continue to be Senior
Indebtedness and entitled to the benefits of the subordination provisions irrespective of any amendment, modification or waiver of any terms of any instrument relating to the Senior Indebtedness or
any extension or renewal of the Senior Indebtedness. 

A-8

 
	7.
	DENOMINATIONS,
TRANSFER, EXCHANGE 

        The
Notes are in registered form, without coupons, in denominations of $1,000 and integral multiples of $1,000. A Holder may register the transfer of or exchange Notes in accordance with
the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes or other governmental charges that may be imposed
in relation thereto by law or permitted by the Indenture. 

	8.
	PERSONS
DEEMED OWNERS 

        The
Holder of a Note may be treated as the owner of it for all purposes. 

	9.
	UNCLAIMED
MONEY 

        If
money for the payment of principal or Additional Interest, if any, remains unclaimed for two years, the Trustee or Paying Agent will pay the money back to the Company at its written
request, subject to applicable unclaimed property law. After that, Holders entitled to money must look to the Company for payment as general creditors unless an applicable abandoned property law
designates another person. 

	10.
	AMENDMENT,
SUPPLEMENT AND WAIVER 

        Subject
to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Notes
then outstanding, and an existing default or Event of Default and its consequence or compliance with any provision of the Indenture or the Notes may be waived in a particular instance with the consent
of the Holders of a majority in aggregate principal amount of the Notes then outstanding. Without the consent of or notice to any Holder, the Company and the Trustee may amend or supplement the
Indenture or the Notes to, among other things, cure any ambiguity, defect or inconsistency or make any other change that does not adversely affect the rights of any Holder. 

	11.
	SUCCESSOR
ENTITY 

        When
a successor Person assumes all the obligations of its predecessor under the Notes and the Indenture in accordance with the terms and conditions of the Indenture, the predecessor
corporation (except in certain circumstances specified in the Indenture) be released from those obligations. 

	12.
	DEFAULTS
AND REMEDIES 

        Under
the Indenture, an Event of Default includes: (i) default in payment of any principal (including, without limitation, any premium, if any) on the Notes when due;
(ii) failure by the Company for 60 days after notice to it to comply with any of its other agreements contained in the Indenture or the Notes; and (iii) certain events of
bankruptcy or reorganization of the Company. If an Event of Default as a result of certain events of bankruptcy or reorganization of the Company occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount of the Notes then outstanding may declare all unpaid principal to the date of acceleration on the Notes then outstanding to be due and payable immediately,
all as and to the extent provided in the Indenture. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may require reasonable indemnity before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Notes then outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders notice of any continuing default (except a default in payment of principal) if it determines that withholding notice is in their interests. The
Company is required to file periodic reports with the Trustee as to the absence of default. 

	13.
	TRUSTEE
DEALINGS WITH THE COMPANY 

        Wells
Fargo Bank Minnesota, National Association, the Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from and perform services
for the Company or an Affiliate of the Company, and may otherwise deal with the Company or an Affiliate of the Company, as if it were not the Trustee. 

	14.
	NO
RECOURSE AGAINST OTHERS 

        A
director, officer, employee or shareholder, as such, of the Company shall not have any liability for any obligations of the Company under the Notes or the Indenture nor for any claim
based on, in respect of or by 

A-9

 

reason
of such obligations or their creation. The Holder of this Note by accepting this Note waives and releases all such liability. The waiver and release are part of the consideration for the
issuance of this Note. 

	15.
	AUTHENTICATION 

        This
Note shall not be valid until the Trustee or an authenticating agent manually signs the certificate of authentication on the other side of this Note. 

	16.
	ABBREVIATIONS
AND DEFINITIONS 

        Customary
abbreviations may be used in the name of the Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian) and UGMA (= Uniform Gifts to Minors Act). 

        All
terms defined in the Indenture and used in this Note but not specifically defined herein are defined in the Indenture and are used herein as so defined. 

	17.
	INDENTURE
TO CONTROL; GOVERNING LAW 

        In
the case of any conflict between the provisions of this Note and the Indenture, the provisions of the Indenture shall control. This Note shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principals of conflicts of law. 

        The
Company will furnish to any Holder, upon written request and without charge, a copy of the Indenture. Requests may be made to: Silicon Valley Bancshares, 3003 Tasman Drive, Santa
Clara, California 95054, (408) 654-7400, Attention: Investor Relations. 

A-10

  

 
 

ASSIGNMENT FORM    
    

        To assign this Note, fill in the form below: 

        I
or we assign and transfer this Note to 

	 
	
 (Insert assignee's soc. sec. or tax I.D. no.)
	

 
	

	

 
	

	

 
	

	

 
	

 (Print or type assignee's name, address and zip code)
	

 
	

and irrevocably appoint
	

 
	

	

 
	

agent to transfer this Note on the books of the Company. The agent may substitute another to act for him or her.

       

	 	 	 	 	Your Signature:	 
	

Date:	
 	

 	
 	

 	

 
	 	 	
	 	 	 
	 	 	 	 	(Sign exactly as your name appears on the other side of this Note)

	*Signature guaranteed by:	 	 
	

By:	
 	

 	
 	

 	
 	

 
	 	 	
	 	 	 	 

	*
	The
signature must be guaranteed by an institution which is a member of one of the following recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion
Program (STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program acceptable to the
Trustee. 

A-11

 
 
 

CONVERSION NOTICE    
    

        To convert this Note, check the box: o 

        Subject
to the Company having received prior approval of the Federal Reserve if then required under applicable capital regulations, guidelines or policies, the Company may elect to
satisfy its Conversion Obligation by Share Settlement, Cash Settlement or Combined Settlement. 

        To
convert only part of this Note, state the principal amount to be converted (must be $1,000 or a integral multiple of $1,000):
$                        . 

        If
you want the stock certificate made out in another person's name, fill in the form below: 

	 
	
 (Insert assignee's soc. sec. or tax I.D. no.)
	

 
	

	

 
	

	

 
	

	

 
	

 (Print or type assignee's name, address and zip code)

       

	 	 	 	 	Your Signature:	 
	

Date:	
 	

 	
 	

 	

 
	 	 	
	 	 	 
	 	 	 	 	(Sign exactly as your name appears on the other side of this Note)

	*Signature guaranteed by:	 	 
	

By:	
 	

 	
 	

 	
 	

 
	 	 	
	 	 	 	 

	*
	The
signature must be guaranteed by an institution which is a member of one of the following recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion
Program (STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program acceptable to the
Trustee. 

A-12

  

 
 

SCHEDULE OF EXCHANGES OF NOTES(4)    
    

        The following exchanges or conversions of a part of this global Note have been made: 

	Principal Amount of this Global

Note Following Such

Decrease Date

of Exchange (or Increase)
	 	Authorized Signatory of

Securities Custodian
	 	Amount of Decrease in

Principal Amount of this

Global Note
	 	Amount of Increase in Principal

Amount of this Global Note

	 	 	 	 	 	 	 

	(4)
	This
schedule should be included only if the Security is a Global Security. 

A-13

  

 
 

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
  OF TRANSFER OF RESTRICTED SECURITIES(5)    
    

	(5)
	This
certificate should only be included if this Security is a Restricted Security.

	Re:
	Zero
Coupon Convertible Subordinated Notes due June 15, 2008 (the "Notes") of Silicon Valley Bancshares 

        This
certificate relates to $            principal amount of Notes owned in (check applicable box) 

        o book-entry
or        o definitive form by Wells Fargo Bank
Minnesota, National Association (the "Transferor"). 

        The
Transferor has requested a Registrar or the Trustee to exchange or register the transfer of such Notes. 

        In
connection with such request and in respect of each such Note, the Transferor does hereby certify that the Transferor is familiar with transfer restrictions relating to the Notes as
provided in Section 2.12 of the Indenture dated as of May 20, 2003 between Silicon Valley Bancshares and Wells Fargo Bank Minnesota, National Association, as trustee (the "Indenture"),
and the transfer of such Note is being made pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act") (check applicable box) or the transfer
or exchange, as the case may be, of such Note does not require registration under the Securities Act because (check applicable box): 

	o
	Such
Note is being transferred pursuant to an effective registration statement under the Securities Act.

	o
	Such
Note is being acquired for the Transferor's own account, without transfer.

	o
	Such
Note is being transferred to the Company or a Subsidiary (as defined in the Indenture) of the Company.

	o
	Such
Note is being transferred to a person the Transferor reasonably believes is a "qualified institutional buyer" (as defined in
Rule 144A or any successor provision thereto ("Rule 144A") under the Securities Act) that is purchasing for its own account or for the account of a "qualified institutional buyer", in
each case to whom notice has been given that the transfer is being made in reliance on such Rule 144A, and in each case in reliance on Rule 144A.

	o
	Such
Note is being transferred to a non-U.S. person in an offshore transaction in compliance with Rule 904 of
Regulation S (or any successor thereto) under the Securities Act.

	o
	Such
Note is being transferred pursuant to and in compliance with an exemption from the registration requirements under the Securities Act
in accordance with Rule 144 (or any successor thereto) ("Rule 144") under the Securities Act. 

        Such
Note is being transferred pursuant to and in compliance with an exemption from the registration requirements of the Securities Act (other than an exemption referred to above) and as
a result of which such Note will, upon such transfer, cease to be a "restricted security" within the meaning of Rule 144 under the Securities Act. 

        The
Transferor acknowledges and agrees that, if the transferee will hold any such Notes in the form of beneficial interests in a global Note which is a "restricted security" within the
meaning of Rule 144 under the Securities Act, then such transfer can only be made pursuant to (i) Rule 144A under the Securities Act and such transferee must be a "qualified
institutional buyer" (as defined in Rule 144A) or (ii) Regulation S under the Securities Act. 

	Date:	 	 	 	 
	 	 	
	 	
 (Insert Name of Transferor)

A-14

QuickLinks

TABLE OF CONTENTS

CROSS-REFERENCE TABLE

ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE

ARTICLE 2 THE SECURITIES

ARTICLE 3 REDEMPTION

ARTICLE 4 CONVERSION

ARTICLE 5 SUBORDINATION

ARTICLE 6 COVENANTS

ARTICLE 7 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

ARTICLE 8 DEFAULT AND REMEDIES

ARTICLE 9 TRUSTEE

ARTICLE 10 SATISFACTION AND DISCHARGE OF INDENTURE

ARTICLE 11 AMENDMENTS, SUPPLEMENTS AND WAIVERS

ARTICLE 12 MISCELLANEOUS

EXHIBIT A [FORM OF FACE OF SECURITY]

SILICON VALLEY BANCSHARES

[FORM OF REVERSE SIDE OF SECURITY] SILICON VALLEY BANCSHARES ZERO COUPON CONVERTIBLE SUBORDINATED NOTES DUE JUNE 15, 2008

ASSIGNMENT FORM

CONVERSION NOTICE

SCHEDULE OF EXCHANGES OF NOTES(4)

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF RESTRICTED SECURITIES(5)QuickLinks
 -- Click here to rapidly navigate through this document
  

EXHIBIT 4.3  

EXECUTION
COPY 

$150,000,000  

SILICON VALLEY BANCSHARES  

Zero Coupon Convertible Subordinated Notes due June 15, 2008  

 
  REGISTRATION RIGHTS AGREEMENT    
    

May 20,
2003 

Credit
Suisse First Boston LLC

Eleven Madison Avenue

New York, New York 10010-3629 

Ladies
and Gentlemen: 

        Silicon
Valley Bancshares, a Delaware corporation (the "Company"), proposes to issue and sell to Credit Suisse First Boston LLC (the
"Initial Purchaser"), upon the terms set forth in a purchase agreement dated May 15, 2003 (the "Purchase
Agreement"), $150,000,000 aggregate principal amount of its Zero Coupon Convertible Subordinated Notes due June 15, 2008 (the
"Notes"). The Notes will be issued pursuant to an Indenture, dated as of May 20, 2003 (the
"Indenture"), between the Company and Wells Fargo Bank Minnesota, National Association, as trustee (the
"Trustee"). As an inducement to the Initial Purchaser to enter into the Purchase Agreement, the Company agrees with the Initial Purchaser, for the
benefit of (i) the Initial Purchaser as Initial Purchaser and (ii) the beneficial owners (including the Initial Purchaser) from time to time of the Notes and of the Underlying Common
Stock (as defined herein) issued upon conversion of the Notes (each of the foregoing, a "Holder" and, collectively, the
"Holders"), as follows: 

        1.    Shelf Registration.    

        (a)   The
Company shall prepare and file with the Securities and Exchange Commission (the "Commission") in no event later than
90 days (such 90th day being a "Filing Deadline") after the latest date on which the Initial Purchaser purchases the Notes pursuant to the
Purchase Agreement (the "Closing Date"), a Shelf Registration Statement for an offering to be made on a delayed or continuous basis pursuant to
Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"), registering the resale from time to time by Holders thereof (who
satisfy certain conditions relating to the provision of information in connection with the Shelf Registration Statement) of all of the Registrable Securities (defined herein) (the
"Shelf Registration Statement"). The Shelf Registration Statement shall be on an appropriate form under the Securities Act permitting registration of
such Registrable Securities for resale by such Holders from time to time in accordance with the methods of distribution elected by the Holders and set forth in the Shelf Registration Statement. The
Company shall use its commercially reasonable efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act as promptly as is practicable but in any event within
one hundred and eighty (180) days after the Closing Date (the "Effectiveness Deadline Date"), and to keep the Shelf Registration Statement
continuously effective under the Securities Act to permit the prospectus included therein to be lawfully delivered by the Holders of the Registrable Securities, for a period of two years (or for such
longer period if extended pursuant to Section 2(h) below) from the Closing Date or such shorter period that will terminate when all the Registrable Securities covered by the Shelf Registration
Statement (i) have been transferred pursuant thereto or Rule 144 under the Securities Act, or any successor rule thereof, (ii) are, with respect to such securities held by
non-affiliates of the Company, eligible to be sold to the public pursuant to Rule 144(k) under the Securities Act, or any successor rule thereof or (iii) have ceased to be
outstanding (such period, the "Effectiveness Period"). 

1

 

Subject
to Section 2(h) hereof, the Company shall be deemed not to have used its commercially reasonable efforts to keep the Shelf Registration Statement effective during the requisite period
if it voluntarily takes any action that would result in Holders of Registrable Securities covered thereby not being able to offer and sell such Registrable Securities during that period, unless such
action is required by applicable law. At the time the Shelf Registration Statement is declared effective, each Holder who has provided the Company with an appropriately completed Notice and
Questionnaire (as defined herein), together with all other information that the Company may reasonably request, on or prior to the date five (5) Business Days prior to such time of effectiveness and
who holds Registrable Securities, shall be named as a selling securityholder in the Shelf Registration Statement and the related prospectus in such a manner as to permit such Holder to deliver such
prospectus to purchasers of Registrable Securities in accordance with applicable law. None of the Company's securityholders (other than the Holders of Registrable Securities) shall have the right to
include any of the Company's securities in the Shelf Registration Statement. 

        (b)   The
Company shall consider, in good faith, such supplements and amendments to the Shelf Registration Statement as are reasonably requested by (i) the Initial
Purchaser in the event that it is participating in the Shelf Registration Statement or (ii) the Trustee on behalf of a majority in interest of the registered Holders,  provided that any period of
suspension of effectiveness of the Shelf Registration Statement resulting from the filing of such supplements or amendments
requested under clauses (i) or (ii) of this Section 1(b) will not (x) be included in calculating the 45 and 90 day periods provided for in Section 2(h) below,
(y) extend the two year period of effectiveness provided for in Section 1(a) above or (z) lead to the assessment of Additional Interest under Section 5 below. 

        (c)   Each
Holder of Registrable Securities agrees that if such Holder wishes to sell Registrable Securities pursuant to a Shelf Registration Statement and related prospectus,
it will do so only in accordance with this Section 1(c) and Section 2(h). Each Holder of Registrable Securities wishing to sell Registrable Securities pursuant to a Shelf Registration
Statement and related prospectus agrees to deliver a Notice and Questionnaire to the Company at least five (5) Business Days prior to any intended distribution of Registrable Securities under
the Shelf Registration Statement. From and after the date the Shelf Registration Statement is declared effective, the Company shall, as promptly as practicable after the date a Notice and
Questionnaire is delivered (i) if required by applicable law, file with the Commission a post-effective amendment to the Shelf Registration Statement or prepare and, if required by
applicable law, file a supplement to the related prospectus or a supplement or amendment to any document incorporated therein by reference, file any other document required under the Securities
Act or file a new shelf registration statement so that the Holder delivering such Notice and Questionnaire is named as a selling securityholder in the Shelf Registration Statement (or in such
new registration statement) and the related prospectus in such a manner as to permit such Holder to deliver such prospectus to purchasers of the Registrable Securities in accordance with applicable
law and, if the Company shall file a post-effective amendment to the Shelf Registration Statement or a new shelf registration statement pursuant to this Section 1(c)(i), use
its commercially reasonable efforts to cause such post-effective amendment or new shelf registration statement to be declared effective under the Securities Act as promptly as is
practicable, but in any event by the date (the "Amendment Effectiveness Deadline Date") that is sixty (60) days after the date such
post-effective amendment or new shelf registration statement is required by this clause to be filed; (ii) provide such Holder copies of any documents filed pursuant to
clause (i) of this Section 1(c); and (iii) notify such Holder as promptly as practicable after the effectiveness under the Securities Act of any post-effective
amendment or new shelf registration statement filed pursuant to clause (i) of this Section 1(c); provided that if such Notice and
Questionnaire is delivered during a Deferral Period (as defined in Section 2(h)), the Company shall so inform the Holder delivering such Notice and Questionnaire and shall take the actions set
forth in clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in accordance with Section 2(h). Notwithstanding anything contained herein to the contrary,
(i) the Company shall be under no obligation to name any Holder that has not submitted a Notice and Questionnaire to the 

2

 

Company
as a selling securityholder in the Shelf Registration Statement or related prospectus and (ii) the Amendment Effectiveness Deadline Date shall be extended by up to ten (10) days
from the expiration of a Deferral Period (and the Company shall incur no obligation to pay Additional Interest during such extension) if such Deferral Period is in effect on the Amendment
Effectiveness Deadline Date. Any Holder who, subsequent to the date the Shelf Registration Statement is declared effective, provides a Notice and Questionnaire required by this Section 1(c)
pursuant to the provisions of this Section shall be named as a selling securityholder in the Shelf Registration Statement and related prospectus or new shelf registration statement in accordance with
the requirements of this Section 1(c). All references to the Shelf Registration Statement herein shall be deemed to include any new shelf registration statement filed pursuant to
clause (i) of this Section 1(c), unless the context otherwise requires. 

        (d)   Notwithstanding
any other provisions of this Agreement to the contrary, the Company shall cause the Shelf Registration Statement and the related prospectus and any
amendment or supplement thereto, as of the effective date of the Shelf Registration Statement and any such amendment or as of the date of filing any such supplement, as applicable, (i) to
comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the Commission and (ii) not to contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading. 

        (e)   As
used in this Agreement, the following terms shall have the following meanings: 

        "Applicable Conversion Price" as of any date of determination means the Conversion Price in effect as of such date of determination or, if
no Notes are then outstanding, the Conversion Price that would be in effect were Notes then outstanding. 

        "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in The City of
New York are authorized or obligated by law or executive order to close. 

        "Common Stock" means the shares of common stock, $0.001 par value per share, of the Company and any other shares of common stock as may
constitute "Common Stock" for purposes of the Indenture, including the Underlying Common Stock. 

        "Conversion Price" has the meaning assigned to such term in the Indenture. 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. 

        "Notice and Questionnaire" means a Selling Securityholder Notice and Questionnaire substantially in the form of  Appendix A hereto. 

        "Notice Holder" means, on any date, any Holder that has delivered a Notice and Questionnaire to the Company on or prior to such date and
holds Registrable Securities as of such date. 

        "Registrable Securities" means the Notes, until such Notes have been converted into or exchanged for the Underlying Common Stock and, at
all times subsequent to any such conversion or exchange, the Underlying Common Stock and any securities into or for which such Underlying Common Stock have been converted or exchanged, and any
security issued with respect thereto upon any stock dividend, split or similar event until, in the case of any such security, (A) the earliest of (i) its effective registration under the
Securities Act and resale in accordance with the Shelf Registration Statement covering it, (ii) expiration of the holding period that would be applicable thereto under Rule 144(k) under
the Securities Act were it not held by an Affiliate of the Company or (iii) its transfer to the public pursuant to Rule 144 under the Securities Act, or any successor rule thereof, and
(B) as a result of the event or circumstance described in any of the 

3

 

foregoing
clauses (i) through (iii), the legends with respect to transfer restrictions required under the Indenture are removed or removable in accordance with the terms of the Indenture, such
legend or applicable law, as the case may be. 

        "Underlying Common Stock" means the shares of Common Stock into which the Notes are convertible or issued upon any such conversion. 

        2.    Registration Procedures.    In connection with the Shelf Registration Statement contemplated by Section 1
hereof, the following provisions shall apply: 

        (a)   The
Company shall (i) furnish to the Initial Purchaser, prior to the filing thereof with the Commission, a copy of the Shelf Registration Statement as proposed to
be filed and each amendment thereof and each supplement, if any, to the prospectus included therein and the Company shall use its commercially reasonable efforts to reflect in the Shelf Registration
Statement, when so filed with the Commission, such comments as the Initial Purchaser reasonably may propose; and (ii) include the names of the Holders who propose to sell Registrable Securities
pursuant to the Shelf Registration Statement and who comply with the provisions hereof as selling securityholders. 

        (b)   The
Company shall give written notice to the Initial Purchaser and the Holders (upon the occurrence of the event contemplated by clause (i) below) and the Notice
Holders (upon the occurrence of any of the events contemplated by clauses (ii) through (vii) below) (which notice pursuant to clauses (iii) through (vii) hereof shall be accompanied by
an instruction to suspend the use of the prospectus until the requisite changes have been made): 

          (i)  of
its intention to file the Shelf Registration Statement (which notice shall be delivered through The Depository Trust Company, a New York corporation ("DTC")); 

         (ii)  when
the Shelf Registration Statement or any amendment thereto has been filed with the Commission and when the Shelf Registration Statement or any
post-effective amendment thereto has become effective (which notice may be delivered through DTC); 

        (iii)  of
any request by the Commission for amendments or supplements to the Shelf Registration Statement or the prospectus included therein or for additional information; 

        (iv)  of
the issuance by the Commission of any stop order suspending the effectiveness of the Shelf Registration Statement or the initiation of any proceedings for that
purpose; 

         (v)  of
the receipt by the Company or its legal counsel of any notification with respect to the suspension of the qualification of the Registrable Securities included within
the coverage of the Shelf Registration Statement for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose,  provided, that with respect to any such threatening,
the notification shall have been in writing; 

        (vi)  of
the happening of any event (but not as to the substance of any such event) that requires the Company to make changes in the Shelf Registration Statement or the
prospectus in order that the Shelf Registration Statement or the prospectus neither contain an untrue statement of a material fact nor omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the prospectus, in light of the circumstances under which they were made) not misleading; and 

       (vii)  the
occurrence or existence of any pending corporate development with respect to the Company (but not as to the substance of any such occurrence) that the Company
believes may be material and that, in the determination of the Company, makes it inadvisable and not in the best interest of the Company to allow continued availability of the Shelf Registration
Statement and the related prospectus. 

4

 

        (c)   The
Company shall use its commercially reasonable effort to obtain the withdrawal at the earliest possible time of any order suspending the effectiveness of the Shelf
Registration Statement or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction in which they have been
qualified for sale. 

        (d)   The
Company shall furnish to each Holder of Registrable Securities included within the coverage of the Shelf Registration Statement, without charge, at least one copy of
the Shelf Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if the Holder so requests in writing, all exhibits thereto
(including those, if any, incorporated by reference). 

        (e)   The
Company shall, during the Effectiveness Period, deliver to each Holder of Registrable Securities included within the coverage of the Shelf Registration Statement,
without charge, as many copies of the prospectus (including each preliminary prospectus) included in the Shelf Registration Statement and any amendment or supplement thereto as such person may
reasonably request. The Company consents, subject to the provisions of this Agreement, to the use, during the Effectiveness Period, of the prospectus or any amendment or supplement thereto by each of
the selling Holders of the Registrable Securities in connection with the offering and sale of the Registrable Securities covered by the prospectus, or any amendment or supplement thereto, included in
the Shelf Registration Statement. 

        (f)    Prior
to any public offering of the Registrable Securities pursuant to the Shelf Registration Statement the Company shall register or qualify or cooperate with the
Holders of the Registrable Securities included therein and their respective counsel in connection with the registration or qualification of the Registrable Securities for offer and sale under the
securities or "blue sky" laws of such states of the United States as any such Holder of Registrable Securities reasonably requests in writing and do any and all other acts or things necessary or
advisable to enable the offer and sale in such jurisdictions of the Registrable Securities covered by such Shelf Registration Statement; provided,
however, that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified or (ii) take any
action which would subject it to general service of process or to taxation in any jurisdiction where it is not then so subject. 

        (g)   Expect
with respect to Registrable Securities held in book-entry form only, the Company shall cooperate with the Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold pursuant to the Shelf Registration Statement free of any restrictive legends and in
such permitted denominations and registered in such names as the Holders may request a reasonable period of time prior to sales of the Registrable Securities pursuant to such Shelf Registration
Statement. 

        (h)   Upon
the occurrence of any event contemplated by paragraphs (iii) through (vi) of Section 2(b) above during the period for which the Company is required to
maintain an effective Shelf Registration Statement, the Company shall promptly prepare and file a post-effective amendment to the Shelf Registration Statement, a supplement to the
related prospectus and any other required document so that, as thereafter delivered to Holders or purchasers of Registrable Securities, the prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If
the Company notifies the Initial Purchaser and the Notice Holders in accordance with paragraphs (iii) through (vi) of Section 2(b) above to suspend the use of the prospectus until the
requisite changes to the prospectus have been made or the Company otherwise notifies the Initial Purchaser and the Notice Holders of its election to suspend the availability of the Shelf Registration
Statement and related prospectus pursuant to Section 2(b)(vii) above, then the Initial Purchaser and the Notice Holders shall suspend use of such prospectus (such period during which the
availability of the Shelf Registration Statement and any related prospectus is suspended being 

5

 

a
"Deferral Period"), and the two-year period of effectiveness of the Shelf Registration Statement provided for in Section 1(a) above
shall be extended by the number of days from and including the date of the giving of such notice to and including the date when the Initial Purchaser and the Holders of Registrable Securities shall
have been advised in writing by the Company that the prospectus may be used or has received such amended or supplemented prospectus pursuant to this Section 2(h);  provided, however, that in no
event will such period of effectiveness be extended as a result of a suspension due to the Company filing a
post-effective amendment to add a Holder as a selling securityholder (a "Holder Suspension"). The Company will use its commercially reasonable efforts to ensure that the use of the
prospectus may be resumed as promptly as is practicable, except that in the case of suspension of the availability of the Shelf Registration Statement and related prospectus pursuant to
Section 2(b)(vii) above, the Company shall not be required to take such action until such time as it shall no longer determine that continued availability of the Shelf Registration
Statement and the related prospectus is inadvisable and not in the best interests of the Company. The Company shall be entitled to exercise its right under this Section 2(h) to suspend the
availability of the Shelf Registration Statement or any prospectus upon the occurrence of any event contemplated by paragraphs (iii) through (vii) of Section 2(b) above, without
incurring or accruing any obligation to pay Additional Interest pursuant to Section 5(a), for one or more periods not to exceed 45 days in any 90-day period and not to
exceed, in the aggregate, 90 days in any 12-month period. 

        (i)    Not
later than the effective date of the Shelf Registration Statement, the Company will provide a CUSIP number for the Registrable Securities and provide the applicable
trustee with printed certificates for the Notes in a form eligible for deposit with DTC. 

        (j)    The
Company shall prepare and file with the Commission such amendments and post-effective amendments to the Shelf Registration Statement as may be necessary
to keep such Shelf Registration Statement continuously effective for the applicable period specified in Section 1(a) and shall cause the related prospectus to be supplemented by any required
prospectus supplement to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act. The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the Shelf Registration Statement and will make generally available to its securityholders (or otherwise provide in accordance with
Section 11(a) of the Securities Act) an earnings statement satisfying the provisions of Section 11(a) of the Securities Act, no later than 45 days after the end of a
12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Company's first fiscal quarter commencing after the effective date of the Shelf
Registration Statement, which statement shall cover such 12-month period. 

        (k)   The
Company shall cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended, in a timely manner and containing such changes, if any, as shall
be necessary for such qualification. In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder
pursuant to the applicable provisions of the Indenture. 

        (l)    The
Company may require each Holder of Registrable Securities to be sold pursuant to the Shelf Registration Statement to furnish to the Company such information
regarding the Holder and the distribution of the Registrable Securities as the Company may from time to time reasonably require for inclusion in the Shelf Registration Statement, and the Company may
exclude from such registration the Registrable Securities of any Holder that unreasonably fails to furnish such information within a reasonable time after receiving such request. 

        (m)  The
Company shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all such other action, if any, as
any Notice Holder shall reasonably request in order to facilitate the disposition of the Registrable Securities pursuant to the Shelf Registration Statement. 

6

 

        (n)   The
Company shall (i) make available, at reasonable times and in a reasonable manner, for inspection by a representative of the Holders of Registrable Securities,
any underwriter participating in any disposition pursuant to the Shelf Registration Statement and any attorney, accountant or other agent retained by the Holders of Registrable Securities or any such
underwriter, all relevant financial and other records, pertinent corporate documents and properties of the Company and (ii) cause the Company's officers, directors, employees, accountants and
auditors to supply all relevant information reasonably requested by the Holders of Registrable Securities or any such underwriter, attorney, accountant or agent in connection with the Shelf
Registration Statement prior to its effectiveness, in each case, as shall be reasonably necessary to enable such persons, to conduct a reasonable investigation within the meaning of Section 11
of the Securities Act; provided, however, that the foregoing inspection and information gathering shall be coordinated on behalf of the Initial
Purchaser by the Initial Purchaser and on behalf of the other parties, by one counsel designated by and on behalf of such other parties as described in Section 3 hereof; and  provided further, that
any information that is designated by the Company, in good faith, as confidential at the time of delivery of such information
shall be kept confidential by the Holders or any such underwriter, attorney, accountant or agent, unless such disclosure is made in connection with a court proceeding or required by law, or such
information becomes available to the public generally or through a third party without an accompanying obligation of confidentiality. Each recipient of confidential information shall be deemed to have
agreed to be bound by the obligations of this paragraph. 

        (o)   The
Company, if requested by any Holder of Registrable Securities covered by a Shelf Registration Statement, shall cause (i) its counsel to deliver an opinion and
updates thereof relating to the Registrable Securities in customary form addressed to such Holders and the managing underwriters, if any, thereof and dated, in the case of the initial opinion, the
effective date of such Shelf Registration Statement (it being agreed that the matters to be covered by such opinion shall include, without limitation, the due incorporation and good standing of the
Company and its subsidiaries; the qualification of the Company and its subsidiaries to transact business as foreign corporations; the due authorization, execution and delivery of the relevant
agreement of the type referred to in Section 2(m) hereof; the due authorization, execution, authentication and issuance, and the validity and enforceability, of the applicable Registrable
Securities; the absence of material legal or governmental proceedings involving the Company and its subsidiaries; the absence of governmental approvals required to be obtained in connection with the
Shelf Registration Statement, the offering and sale of the applicable Registrable Securities, or any agreement of the type referred to in Section 2(m) hereof; the compliance as to form of such
Shelf Registration Statement and any documents incorporated by reference therein and of the Indenture with the requirements of the Securities Act and the Trust Indenture Act, respectively; and, as of
the date of the opinion and as of the effective date of the Shelf Registration Statement or most recent post-effective amendment thereto, as the case may be, the absence from such Shelf
Registration Statement and the prospectus included therein, as then amended or supplemented, and from any documents incorporated by reference therein of an untrue statement of a material fact or the
omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any such documents, in the light of the circumstances
existing at the time that such documents were filed with the Commission under the Exchange Act); (ii) its officers to execute and deliver all customary documents and certificates and updates
thereof requested by any underwriters of the applicable Registrable Securities and (iii) its independent public accountants (and the independent accountants with respect to any other entity for
which financial information is provided in the Shelf Registration Statement) to provide to the selling Holders of the applicable Registrable Securities and any underwriter therefor a comfort letter in
customary form and covering matters of the type customarily covered in comfort letters in connection with primary underwritten offerings, subject to receipt of appropriate documentation as
contemplated, and only if permitted, by Statement of Auditing Standards No. 72. 

7

 

        (p)   The
Company will use its commercially reasonable efforts to (a) if the Notes have been rated prior to the initial sale of such Notes, confirm such ratings will
apply to the Registrable Securities covered by a Shelf Registration Statement, or (b) if the Notes were not previously rated, cause the Registrable Securities covered by a Shelf Registration
Statement to be rated with the appropriate rating agencies, if so requested by Holders of a majority in aggregate principal amount of Registrable Securities covered by such Shelf Registration
Statement, or by the managing underwriters, if any. 

        (q)   In
the event that any broker-dealer registered under the Exchange Act shall underwrite any Registrable Securities or participate as a member of an underwriting syndicate
or selling group or "assist in the distribution" (within the meaning of the Conduct Rules (the "Rules") of the National Association of Securities
Dealers, Inc. ("NASD")) thereof, whether as a Holder of such Registrable Securities or as an underwriter, a placement or sales agent or a broker
or dealer in respect thereof, or otherwise, the Company will assist such broker-dealer in complying with the requirements of such Rules, including, without limitation, by (i) if such Rules,
including Rule 2720, shall so require, engaging a "qualified independent underwriter" (as defined in Rule 2720) to participate in the preparation of the Shelf Registration Statement
relating to such Registrable Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Shelf Registration Statement is an
underwritten offering or is made through a placement or sales agent, to recommend the yield of such Registrable Securities, (ii) indemnifying any such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 5 hereof and (iii) providing such information to such broker-dealer as may be required in order for such broker-dealer
to comply with the requirements of the Rules. 

        (r)   The
Company shall use its commercially reasonable efforts to take all other steps necessary to effect the registration of the Registrable Securities covered by a Shelf
Registration Statement contemplated hereby. 

        (s)   The
Company shall as promptly as practicable (if reasonably requested by any Holder who has delivered a Notice and Questionnaire and holds Registrable Securities or by
the Initial Purchaser (with respect to any portion of an unsold allotment from the original offering if such Initial Purchaser is participating in the Shelf Registration Statement)) incorporate in a
prospectus supplement or post-effective amendment to the Shelf Registration Statement such information as such Holder or Initial Purchaser shall, on the basis of an opinion of nationally
recognized counsel experienced in such matters, determine to be required to be included therein and make any required filings of such prospectus supplement or such post-effective
amendment; provided that, the Company shall not be required to take any actions under this Section 2(s) that are not, in the reasonable opinion
of counsel for the Company, in compliance with applicable law. 

        (t)    The
Company shall use its commercially reasonable efforts to cause the Underlying Common Stock to be listed on any securities exchange or any automated quotation system
on which similar securities issued by the Company are then listed, to the extent the Underlying Common Stock satisfies applicable listing requirements. 

        3.    Registration Expenses.    

        (a)   Except
as otherwise provided herein, all expenses incident to the Company's performance of and compliance with this Agreement will be borne by the Company, regardless of
whether a Shelf Registration Statement is ever filed or becomes effective, including without limitation: 

          (i)  all
registration and filing fees and expenses; 

         (ii)  all
fees and expenses of compliance with federal securities and state "blue sky" or securities laws; 

        (iii)  all
expenses of printing, messenger and delivery services and telephone; 

8

 

        (iv)  all
fees and disbursements of counsel for the Company; 

         (v)  all
application and filing fees in connection with listing the Underlying Common Stock on a national securities exchange or automated quotation system pursuant to the
requirements thereof; and 

        (vi)  all
fees and disbursements of independent certified public accountants of the Company (including the expenses of any special audit and comfort letters required by or
incident to such performance). 

The
Company will bear its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any person, including special experts, retained by the Company. 

        (b)   In
connection with the Shelf Registration Statement required by this Agreement, the Company will bear or reimburse the Notice Holders for the reasonable fees and
disbursements of one firm of legal counsel, which shall initially be Milbank, Tweed, Hadley & McCloy LLP, but which may, with the written consent of the Initial Purchaser (which consent
shall not be unreasonably withheld), be another nationally recognized law firm experienced in securities law matters designated by the Company. 

        4.    Indemnification.    

        (a)   The
Company agrees to indemnify and hold harmless each Holder of Registrable Securities and each person, if any, who controls such Holder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities, joint or several to which such Holder may become subject under the
Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of, or are based upon, any untrue statement or alleged
untrue statement of any material fact contained in the Shelf Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to the Shelf
Registration Statement, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made not misleading and shall reimburse, the Holders for any legal or other expenses reasonably incurred by the Holders in connection
with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company by or on behalf of such Holder
specifically for use therein, and provided further that with respect to any untrue statement or alleged untrue statement in or omission or alleged
omission from any preliminary prospectus relating to a Shelf Registration Statement, the indemnity agreement contained in this subsection (a) shall not inure to the benefit of any Holder from
whom the person asserting any such losses, claims, damages or liabilities purchased the Registrable Securities concerned, to the extent that a prospectus relating to such Registrable Securities was
required to be delivered by such Holder under the Securities Act in connection with such purchase and any such loss, claim, damage or liability of such Holder results from the fact that there was not
sent or given to such person, at or prior to the written confirmation of the sale of such Registrable Securities to such person, a copy of the final prospectus if the Company had previously furnished
copies thereof to such Holder; provided further, however, that this indemnity agreement will be in addition to any liability which the Company may
otherwise have to such Holder. The Company shall also indemnify any underwriters, their officers and directors and each person who controls such underwriters within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act to the same extent as provided above with respect to the indemnification of the Holders if requested by such Holders. 

9

 

        (b)   Each
Holder of Registrable Securities, severally and not jointly, will indemnify and hold harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities to which the Company or
any such controlling person may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Shelf Registration Statement or prospectus or in any amendment or supplement thereto or
in any preliminary prospectus relating to the Shelf Registration Statement, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information pertaining to such Holder furnished to the Company by or on
behalf of such Holder specifically for use therein; and, shall reimburse the Company for any legal or other expenses reasonably incurred by the Company or any such controlling person in connection
with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred. This indemnity agreement will be in addition to any liability which such Holder may
otherwise have to the Company or any of its controlling persons. 

        (c)   Promptly
after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof
is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party of the commencement thereof; but the failure to notify the indemnifying party shall
not relieve it from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may
have to an indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section
for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall,
without the prior written consent of the indemnified party which consent shall not be unreasonably withheld or delayed, effect any settlement of any pending or threatened action in respect of which
any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes (i) an unconditional release of such
indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to or an admission of fault, culpability or failure to act
by or on behalf of any indemnified party. In no event will any indemnifying party be liable for fees and disbursements of more than one counsel, plus the fees and disbursements of any local counsel,
for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general obligations or circumstances, unless
an indemnified party reasonably determines that representation of such indemnifying party and the indemnified party by the same counsel would present a conflict of interest. 

        (d)   If
the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsections (a) or (b) above, then
each indemnifying party shall 

10

 

contribute
to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such
proportion as is appropriate to reflect the relative fault of the indemnifying party or parties on the one hand and the indemnified party or parties on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or one or more
Holders, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result
of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection, the Holders
of Registrable Securities shall not be required to contribute any amount in excess of the amount by which the net proceeds received by such Holders from the sale of the Registrable Securities pursuant
to a Shelf Registration Statement exceeds the amount of any damages which such Holders have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this subsection (d), each person, if any, who controls such indemnified party within the meaning of the Securities Act or the Exchange Act
shall have the same rights to contribution as such indemnified party and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act shall have the same
rights to contribution as the Company. 

        (e)   The
agreements contained in this Section 4 shall survive the sale of the Registrable Securities pursuant to a Shelf Registration Statement and shall remain in
full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party. 

        5.    Additional Interest Under Certain Circumstances.    

        (a)   Additional
interest (the "Additional Interest") with respect to the Registrable Securities shall be assessed as follows
if any of the following events occur (each such event in clauses (i) through (iv) below being herein called a "Registration Default"): 

          (i)  the
Shelf Registration Statement required by this Agreement is not filed with the Commission on or prior to the Filing Deadline; 

         (ii)  the
Shelf Registration Statement required by this Agreement is not declared effective by the Commission on or prior to the Effectiveness Deadline Date; 

        (iii)  the
Company has failed to perform its obligations set forth in Section 1(c) with respect to a particular Notice Holder within the time period required therein;  provided that Additional Interest will be
assessed under this clause (iii) only with respect to the Registrable Securities held by such Notice
Holder, and not any other Holder; or 

        (iv)  the
Shelf Registration Statement required by this Agreement has been declared effective by the Commission but such Shelf Registration Statement or related prospectus
thereafter ceases to be effective or useable (subject to the Company's right to suspend the use of the Shelf Registration Statement and the prospectus as set forth in Section 2(h)) in
accordance with the provisions of this Agreement and during the periods specified herein and (A) the Company does not cure the Shelf Registration Statement within five (5) Business Days
(in the event the Company may not otherwise suspend the availability of the Shelf Registration Statement and related prospectus without incurrence and accrual of any obligation to pay Additional
Interest because of 

11

 

its
full utilization of the time provided for in the last sentence of Section 2(h)) after it ceases to be effective or useable by a post-effective amendment or additional Shelf
Registration Statement being filed and declared effective or a report filed pursuant to the Exchange Act or (B) the Company does not terminate any Deferral Period within the time provided for
in the last sentence of Section 2(h); provided that, with respect to a Holder Suspension, no Additional Interest will be paid pursuant to this
clause (iv) to the Holder or Holders who are the subject of such Holder Suspension. 

Each
of the foregoing will constitute a Registration Default whatever the reason for any such event and whether it is voluntary or involuntary or is beyond the control of the Company or pursuant to
operation of law or as a result of any action or inaction by the Commission. 

        Additional
Interest shall accrue on the Registrable Securities from and including the date on which any such Registration Default shall occur to but excluding the date on which such
Registration Default has been cured, at a rate of 0.50% per annum (the "Additional Interest Rate") of the aggregate principal amount of the Notes that
are Registrable Securities. In the case of Notes that have been converted into or exchanged for Underlying Common Stock, Additional Interest shall accrue at a per annum rate equal to 0.50% of the
Applicable Conversion Price of such shares of Underlying Common Stock that are Registrable Securities. Any Additional Interest accrued with respect to any Note or portion thereof converted into
Underlying Common Stock on a conversion date prior to the interest payment date with respect to the Notes under the Indenture, shall, in any such event, be paid instead to the Holder who submitted
such Note or portion thereof for conversion on the applicable conversion date, promptly following the conversion date. Notwithstanding the foregoing, no Additional Interest shall accrue as to any
Registrable Security: (i) held by any Holder other than a Notice Holder; or (ii) from and after the earlier of (x) the date such security is no longer a Registrable Security and
(y) the expiration of the
Effectiveness Period. The rate of accrual of the Additional Interest with respect to any period shall not exceed the rate provided for in this paragraph notwithstanding the occurrence of multiple
concurrent Registration Defaults. Following the cure of any Registration Default requiring the payment by the Company of Additional Interest to the Holders of Registrable Securities pursuant to this
Section, the accrual of Additional Interest with respect to such Registration Default will cease (without in any way limiting the effect of any subsequent Registration Default requiring the payment of
Additional Interest by the Company). No other monetary damages shall be available to the Holders of Registrable Securities for a Registration Default. 

        The
Trustee shall be entitled, on behalf of Holders of Notes or Underlying Common Stock, to seek any available remedy for the enforcement of this Agreement, including for the payment of
any Additional Interest. 

        All
of the Company's obligations set forth in this Section 5 that are outstanding with respect to any Registrable Security at the time such security ceases to be a Registrable
Security shall survive until such time as all such obligations with respect to such security have been satisfied in full. 

        The
parties hereto agree that the Additional Interest provided for in this Section 5 constitutes a reasonable estimate of the damages that may be incurred by Holders of
Registrable Securities by reason of the failure of the Shelf Registration Statement to be filed or declared effective or available for effecting resales of Registrable Securities in accordance with
the provisions hereof. 

        (b)   Any
amounts of Additional Interest due pursuant to Section 5(a) will be payable in cash semiannually in arrears on June 15 and December 15. The
amount of Additional Interest will be determined by multiplying the applicable Additional Interest Rate by the principal amount of the Registrable Securities or the Applicable Conversion Price of the
Registrable Securities, as applicable, and further multiplied by a fraction, the numerator of which is the number of days such Additional Interest Rate was applicable during such period (determined on
the basis of a 360-day year comprised of twelve 30-day months), and the denominator of which is 360. The Registrable Securities entitled to 

12

 

payment
of Additional Interest shall be determined as of the Business Day immediately preceding the next payment date for Additional Interest with respect to the Registrable Securities. 

        6.    Rules 144 and 144A.    The Company shall use its commercially reasonable efforts to file the reports
required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the request of any
Holder, make publicly available other information so long as necessary to permit sales of their securities pursuant to Rules 144 and 144A. The Company covenants that it will take such further
action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rules 144 and 144A (including the requirements of
Rule 144A(d)(4)). The Company will provide a copy of this Agreement to prospective purchasers of Notes identified to the Company by the Initial Purchaser upon request. Upon the request of any
Holder of Notes, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 6
shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act. 

        7.    Underwritten Registrations.    If any of the Registrable Securities covered by the Shelf Registration are to be
sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering ("Managing
Underwriters") will be selected by the Holders of a majority in aggregate principal amount of such Registrable Securities to be included in such offering
(provided that Holders of Common Stock issued upon conversion of the Notes shall not be deemed holders of Common Stock, but shall be deemed to be
holders of the aggregate principal amount of Notes from which such Common Stock was converted), provided, however, that such Managing Underwriters will
be reasonably acceptable to the Company. 

        No
person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person's Registrable Securities on the basis reasonably provided in
any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 

        8.    Miscellaneous.    

        (a)    Remedies.    The Company acknowledges and agrees that any failure by the Company to comply with its obligations
under Section 1 and 2 hereof may result in material irreparable injury to the Initial Purchaser or the Holders for which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchaser or any Holder may obtain such relief as may be required to specifically enforce the
Company's obligations under Sections 1 and 2 hereof. The Company further agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 

        (b)    No Inconsistent Agreements.    The Company will not on or after the date of this Agreement enter into any
agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's securities under any agreement in effect on the date hereof. 

        (c)    Amendments and Waivers.    The provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given, except by the Company and the written consent of the Holders of a majority in principal amount of the Registrable
Securities affected by such amendment, modification, supplement, waiver or consents (provided that Holders of Common Stock issued upon conversion of
Notes shall not be deemed holders of Common Stock, but shall be deemed to be holders of the aggregate principal amount of Notes from which such Common Stock was converted). 

13

 

        (d)    Notices.    All notices and other communications provided for or permitted hereunder shall be made in writing
by hand delivery, first-class mail, facsimile transmission, or air courier that guarantees overnight delivery: 

        (1)   if
to a Holder of the Registrable Securities, except with respect to notices delivered through DTC pursuant to Section 2(b)(i) and (ii) hereof, at
the most current address given by such Holder to the Company. 

        (2)   if
to the Initial Purchaser: 

	

	Credit
Suisse First Boston LLC

Eleven Madison Avenue

New York, NY 10010-3629

Fax No.: (212) 325-8278

Attention: Transactions Advisory Group

	

	with
a copy to:

	

	Milbank,
Tweed, Hadley & McCloy LLP

One Chase Manhattan Plaza

New York, New York 10005

Attention: Joy K. Gallup 

        (3)   if
to the Company, at its address as follows: 

	

	Silicon
Valley Bancshares

3003 Tasman Drive

Santa Clara, California 95054-1191

	

	with
a copy to:

	

	Wilson
Sonsini Goodrich & Rosati

Professional Corporation

650 Page Mill Road

Palo Alto, CA 94304-1050

Attention: John A. Fore 

        All
such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three business days after being deposited in the
mail, postage prepaid, if mailed; when receipt is acknowledged by recipient's facsimile machine operator, if sent by facsimile transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery. 

        (e)    Third-Party Beneficiaries.    The Holders shall be third-party beneficiaries to the agreements made hereunder
between the Company, on the one hand, and the Initial Purchaser, on the other hand, and shall have the right to enforce such agreements directly to the extent they may deem such enforcement necessary
or advisable to protect their rights or the rights of Holders hereunder. Any Notice Holder shall be bound by the terms and provisions of this Agreement by reason of its election with respect to the
Registrable Securities to have its Registrable Securities included in the Shelf Registration Statement. All the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit
of and shall be enforceable by the respective successors and assigns of the parties hereto and any Holder from time to time of the Registrable Securities to the aforesaid extent. In the event that any
transferee of any Holder of Registrable Securities shall acquire Registrable Securities, in any manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee shall,
without any further writing or action of any kind, be entitled to receive the benefits of and, if a Notice 

14

 

Holder,
be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement to the aforesaid extent. 

        (f)    Successors and Assigns.    This Agreement shall be binding upon the Company and its successors and assigns. 

        (g)    Counterparts.    This Agreement may be executed in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 

        (h)    Headings.    The headings in this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof. 

        (i)    Governing Law.    THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. 

        (j)    Severability.    If any one or more of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby. 

        (k)    Securities Held by the Company.    Whenever the consent or approval of Holders of a specified percentage of
principal amount of Registrable Securities is required hereunder, Registrable Securities held by the Company or its affiliates (other than subsequent Holders of Registrable Securities if such
subsequent Holders are deemed to be affiliates solely by reason of their holdings of such Registrable Securities) shall not be counted in determining whether such consent or approval was given by the
Holders of such required percentage. 

[Signature
page follows] 

15

 

        If
the foregoing is in accordance with your understanding of our agreement, please sign and return to the Initial Purchaser a counterpart hereof, whereupon this instrument, along with
all counterparts, will become a binding agreement between the Initial Purchaser and the Company in accordance with its terms. 

	 	 	 	Very truly yours,
	

 	
 	

 	

SILICON VALLEY BANCSHARES
	

 	
 	

 	

By:	
 	

/s/  LAUREN A. FRIEDMAN      

	 	 	 	Name:	 	Lauren A. Friedman
	 	 	 	Title:	 	Chief Financial Officer
	

The foregoing Registration

Rights Agreement is hereby confirmed

and accepted as of the date first

above written.	

 	
 	

 
	

CREDIT SUISSE FIRST BOSTON LLC	

 	
 	

 
	

By:	
 	

/s/  TOD D. PERKINS      
	

 	
 	

 
	Name:	 	Tod D. Perkins	 	 	 
	Title:	 	Managing Director	 	 	 

16

  

APPENDIX A  

 
  FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE    
    

        The undersigned beneficial holder of Zero Coupon Convertible Subordinated Notes due June 15, 2008 (the "Notes") of Silicon Valley Bancshares (the
"Company") or Common Stock, par value $0.001 per share (the "Common Stock" and together with the Notes, the "Registrable Securities"), of the Company understands that the Company has filed or intends
to file with the Securities and Exchange Commission a registration statement (the "Shelf Registration Statement") for the registration and resale under Rule 415 of the Securities Act of 1933,
as amended, of the Registrable Securities in accordance with the terms of the Registration Rights Agreement, dated May 20, 2003 (the "Registration Rights Agreement"), among the Company and the
Initial Purchaser named therein. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined
herein shall have the meaning ascribed thereto in the Registration Rights Agreement. 

        Each
beneficial owner of Registrable Securities is entitled to the benefits of the Registration Rights Agreement. In order to sell or otherwise dispose of any Registrable Securities
pursuant to the Shelf Registration Statement, a beneficial owner of Registrable Securities generally will be required to be named as a selling securityholder in the related prospectus, deliver a
prospectus to purchasers of Registrable Securities and be bound by those provisions of the Registration Rights Agreement applicable to such beneficial owner (including certain indemnification
provisions). Beneficial owners are encouraged to complete and deliver this Notice and Questionnaire prior to the effectiveness of the Shelf Registration Statement so that such beneficial owners may be
named as selling securityholders in the related prospectus at the time of effectiveness. Any beneficial owner of Notes wishing to include its Registrable Securities must deliver to the Company a
properly completed and signed Selling Securityholder Notice and Questionnaire. 

        Certain
legal consequences arise from being named as a selling securityholder in the Shelf Registration Statement and the related prospectus. Accordingly, holders and beneficial owners
of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Shelf Registration
Statement and the related prospectus. 

Notice  

        The undersigned beneficial owner (the "Selling Securityholder") of Registrable Securities hereby gives notice to the Company of its intention to sell or otherwise
dispose of Registrable Securities beneficially owned by it and listed below in Item 3 (unless otherwise specified under Item 3) pursuant to the Shelf Registration Statement. The undersigned, by
signing and returning this Notice and Questionnaire, understands that it will be bound by the terms and conditions of this Notice and Questionnaire and the Registration Rights Agreement. 

        The
undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate and complete: 

Questionnaire  

	1.	 	(a)	 	Full Legal Name of Selling Securityholder:
	

 	
 	

    

	

 	
 	

(b)	
 	

Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities listed in (3) below are held:
	

 	
 	

	

 	
 	

(c)	
 	

Full Legal Name of DTC Participant (if applicable and if not the same as (b) above) through which Registrable Securities listed in (3) below are held:
	

 	
 	

	

 	
 	

 	
 	

 	
 	

 

17

 

	

2.	
 	

Address for Notices to Selling Securityholder:
	

 	
 	

    

	 	 	    

	

 	
 	

Telephone:	
 	

    

	 	 	Fax:	 	    

	 	 	Contact Person:	 	    

	

3.	
 	

Beneficial Ownership of Registrable Securities:
	

 	
 	

(a)	
 	

Type and Principal Amount of Registrable Securities beneficially owned:
	

 	
 	

    

	 	 	    

	

 	
 	

(b)	
 	

CUSIP No(s). of Registrable Securities beneficially owned:
	

 	
 	

    

	 	 	    

	

4.	
 	

Beneficial Ownership of the Company's securities owned by the Selling Securityholder:
	

 	
 	
Except as set forth below in this Item (4), the undersigned is not the beneficial or registered owner of any "Other Securities," defined as securities of the Company other than the Registrable Securities listed
above in Item (3).
	

 	
 	

(a)	
 	

Type and Amount of Other Securities beneficially owned by the Selling Securityholder:
	

 	
 	

	

 	
 	

	

 	
 	

(b)	
 	

CUSIP No(s). of such Other Securities beneficially owned:
	

 	
 	

	

 	
 	

	

5.	
 	

Relationship with the Company:
	

 	
 	
Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equityholders (5% or more) has held any position or office or has had any other material relationship
with the Company (or its predecessors or affiliates) during the past three years.
	

 	
 	

 	
 	

 	
 	

 

18

 

	

 	
 	

State any exceptions here:
	

 	
 	

    

	 	 	    

	 	 	    

	 	 	    

	

6.	
 	

Plan of Distribution:
	

 	
 	
Except as set forth below, the undersigned (including its donees or pledgees) intends to distribute the Registrable Securities listed above in Item (3) pursuant to the Shelf Registration Statement only as
follows (if at all): Such Registrable Securities may be sold from time to time directly by the undersigned or alternatively, through underwriters, broker-dealers or agents. If the Registrable Securities are sold through underwriters or broker-dealers,
 the Selling Securityholder will be responsible for underwriting discounts or commissions or agent's commissions. Such Registrable Securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at
varying prices determined at the time of sale, or at negotiated price. Such sales may be effected in transactions (which may involve block transactions) (i) on any national securities exchange or quotation service on which the Registrable
Securities may be listed or quoted at the time of sale, (ii) in the over-the-counter market, (iii) in transactions otherwise than on such exchanges or services or in the over-the-counter market, or (iv) through the writing of options.
In connection with sales of the Registrable Securities or otherwise, the undersigned may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Registrable Securities and deliver Registrable Securities to
close out such short positions, or loan or pledge Registrable Securities to broker-dealers that in turn may sell such securities.
	

 	
 	

State any exceptions here:
	

 	
 	

    

	 	 	    

	 	 	    

	 	 	    

        The undersigned acknowledges that it understands its obligation to comply with the provisions of the Securities Exchange Act of 1934, as amended, and the Rules
thereunder relating to stock manipulation, particularly Regulation M thereunder (or any successor Rules or regulations), in connection with any offering of Registrable Securities pursuant to
the Shelf Registration Statement. The undersigned agrees that neither it nor any person acting on its behalf will engage in any transaction in violation of such provisions. 

        The
Selling Securityholder hereby acknowledges its obligations under the Registration Rights Agreement to indemnify and hold harmless certain persons as set forth therein. 

        Pursuant
to the Registration Rights Agreement, the Company has agreed under certain circumstances to indemnify the Selling Securityholder against certain liabilities. 

        In
accordance with the undersigned's obligation under the Registration Rights Agreement to provide such information as may be required by law for inclusion in the Shelf Registration
Statement, the undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the
Shelf Registration Statement remains effective. All notices hereunder and pursuant to the Registration Rights Agreement shall be made in writing at the address set forth below. 

        By
signing below, the undersigned consents to the disclosure of the information contained herein in its answers to items (1) through (6) above and the inclusion of such
information in the Shelf Registration Statement and the related prospectus. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or
amendment of the Shelf Registration Statement and the related prospectus. 

19

 

        IN
WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent. 

	Dated:	Beneficial Owner
	

 	

By:	
 	

    
 Name:

Title:

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO:  

Silicon
Valley Bancshares

3003 Tasman Drive

Santa Clara, California 95054

(408) 654-7282

Attn: Investor Relations 

20

QuickLinks

REGISTRATION RIGHTS AGREEMENT

FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

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