Exhibit
4.07


 


COLLATERAL PLEDGE


AND SECURITY AGREEMENT


 


Dated as of March 5, 2002


 


among


 


ADAPTEC, INC.


as Pledgor,


 


WELLS FARGO BANK, N.A.


as Trustee,


 


and


 


WELLS FARGO BANK, N.A.


as Collateral Agent


 

















 


This Collateral Pledge and Security Agreement (as supplemented
from time to time, this “Pledge Agreement”) is made and entered into as of
March 5, 2002 among ADAPTEC, INC., a Delaware corporation (the “Pledgor”),
having its principal offices at 691 South Milpitas Blvd., Milpitas, California
95035, Wells Fargo Bank, N.A., a California state chartered banking
corporation, having its principal corporate trust office in California at 707
Wilshire Blvd., 17th Floor, Los Angeles, CA 90017, as trustee (in such
capacity, the “Trustee”) for the holders (the “Holders”) of the Notes (as
defined herein) issued by the Pledgor under the Indenture referred to below,
and Wells Fargo Bank, N.A., having a corporate trust office at 707 Wilshire
Blvd., 17th Floor, Los Angeles, CA 90017, as collateral agent for the Trustee
and the holders from time to time of the Notes referred to below (in such
capacity, the “Collateral Agent”) and securities intermediary.


 


W I T N E S S E T H:


 


WHEREAS, the Pledgor and Bear, Stearns & Co. Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America
Securities LLC and Morgan Stanley & Co. Incorporated (the “Initial
Purchasers”) are parties to a Purchase Agreement dated February 27, 2002 (the
“Purchase Agreement”), pursuant to which the Pledgor will issue and sell to the
Initial Purchasers $225,000,000 aggregate principal amount of 3% Convertible
Subordinated Notes due 2007, plus up to an additional $25,000,000 aggregate
principal amount of Notes as to which the Initial Purchasers may exercise their
over-allotment option set forth in Section 3(c) of the Purchase Agreement
(collectively, the “Notes”);


 


WHEREAS, the Pledgor and Wells Fargo Bank, N.A., as
Trustee, have entered into that certain indenture dated as of the date hereof
(as amended, restated, supplemented or otherwise modified from time to time,
the “Indenture”), pursuant to which the Pledgor is issuing the Notes on the
date hereof;


 


WHEREAS, pursuant to the Indenture, the Pledgor is
required to purchase, or cause the purchase of, and pledge to the Collateral
Agent for the benefit of the Trustee and the Holders, as of the First Closing
Date (as defined in the Purchase Agreement) or the relevant Optional Closing
Date (as defined in the Purchase Agreement), U.S. Government Obligations (as
defined in the Indenture) in an amount that will be sufficient upon receipt of
scheduled interest and principal payments of such securities, according to the
written report of PricewaterhouseCoopers LLP or another nationally recognized
firm of independent public accountants selected by the Pledgor and delivered to
the Trustee, to provide for payment in full of the first six scheduled interest
payments due on the Notes (such obligation, together with the obligation to
repay the principal, premium, if any, interest (including Additional Interest
as defined in the Indenture, if any), fees, expenses or otherwise on the Notes
and under the Indenture, this Agreement and any other transaction document
related thereto in the event that the Notes become due and payable prior to
such time as the first six scheduled interest payments thereon shall have been
paid in full, being collectively referred to herein as the “Obligations”);


 


WHEREAS, the Pledgor has established an account (the
“Collateral Account”) with Wells Fargo Bank, N.A., at its office at 707 Wilshire
Blvd., 17th Floor, Los Angeles, CA 90017, in the name of Wells Fargo Bank,
N.A., as Collateral Agent for the benefit of the Trustee and 


 

















 


holders (the “Holders”) of the 3% Convertible Subordinated Notes Due
2007 of Adaptec, Inc. and designated as “Wells Fargo Collateral Agent for
ADPT”; and


 


WHEREAS, it is a condition precedent to the purchase
of the Notes by the Initial Purchasers pursuant to the Purchase Agreement that
the Pledgor purchase the Pledged Securities (as defined below) and deposit such
Pledged Securities into the Collateral Account to be held therein subject to
the terms of this Pledge Agreement and shall have granted the assignment and
security interest and made the pledge and assignment contemplated by this
Pledge Agreement.


 


NOW, THEREFORE, in consideration of the premises
herein contained, and in order to induce the Initial Purchasers to purchase the
Notes, the Pledgor, the Trustee and the Collateral Agent hereby agree, for the
benefit of the Initial Purchasers and for the ratable benefit of the Holders,
as follows:


 


SECTION 1.  Definitions;
Appointment; Deposit and Investment.


 


1.1           Definitions.


 


(a)           Unless
otherwise defined in this Pledge Agreement, terms defined or referenced in the
Indenture are used in this Pledge Agreement as such terms are defined or
referenced therein.


 


(b)           Unless
otherwise defined in the Indenture or in this Pledge Agreement, terms defined
in Division 8 or 9 of the Uniform Commercial Code in effect in the State of
California (“California UCC”) from time to time and/or in Section 357.2 of the
Treasury Regulations (as defined in Section 1.1(c)) are used in this Pledge
Agreement as such terms are defined in such Division 8 or 9 and/or such Section
357.2.


 


(c)           In
this Pledge Agreement, the following terms have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):


 


“Additional Pledged Securities” has the meaning
specified in Section 1.3 hereof.


 


“Book-entry Security” has the meaning specified in 31
C.F.R. Section 357.2.


 


“California UCC” has the meaning specified in Section
1.1(b).


 


“Cash Equivalents” means, to the extent owned by the
Pledgor free and clear of all liens other than liens created hereunder, U.S.
Government Obligations.


 


“C.F.R.” means U.S. Code of Federal Regulations.


 


“Collateral” has the meaning specified in Section 1.3
hereof.


 


“Collateral Account” has the meaning specified in the
recitals of the parties hereof.


 


“Collateral Agent” has the meaning specified in the
recitals of the parties hereto.


 


“Collateral Investments” has the meaning specified in
Section 5 hereof.


 


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“Entitlement holder” has the meaning specified in
California UCC Section 8102(a)(7) or, in respect of any Book-entry Security,
the meaning specified for “Entitlement Holder” in 31 C.F.R. Section 357.2 or as
applicable to such Book-entry Security, the corresponding federal book-entry
regulations.


 


“First Closing Date” has the meaning specified in the
Purchase Agreement.


 


“FRB” means the Federal Reserve Bank or, as
applicable, a branch thereof.


 


“FRB Account” means the FRB Member Securities Account
maintained in the name of the Collateral Agent by the FRB.


 


“FRB Member” means any Person that is eligible to
maintain (and that maintains) with the FRB one or more FRB Member Securities
Accounts in such Person’s name.


 


“FRB Member Securities Account” means, in respect of
any Person, the Participant’s Securities Account maintained in the name of such
Person at the FRB, to which account U.S. Government Obligations held for such
Person are or may be credited.


 


“Holders” has the meaning specified in the recitals of
the parties hereto.


 


“Initial Pledged Securities” has the meaning specified
in Section 1.3 hereof.


 


“Notes” has the meaning specified in the recitals of
the parties hereof.


 


“Obligations” has the meaning specified in the
recitals of the parties hereof.


 


"Optional Closing Date" has the meaning
specified in the Purchase Agreement.


 


“Initial Purchaser” has the meaning specified in the
recitals of the parties hereof.


 


“Purchase Agreement” has the meaning specified in the
recitals of the parties hereof.


 


“Pledged Securities” has the meaning specified in
Section 1.3 hereof.


 


“Pledgor” has the meaning specified in the recitals of
the parties hereto.


 


“Securities intermediary” means a Person that is a
“securities intermediary” (as defined in California UCC Section 8102(a)(14))
and, in respect of any Book-entry Security, a “Securities Intermediary” (as
defined in 31 C.F.R. Section 357.2 or, as applicable to such Book-entry
Security, as defined in the corresponding federal book-entry regulations).


 


“Security” has the meaning specified in Section
8102(a)(15) of the California UCC or, in respect of any Book-entry Security,
has the meaning specified for “Security” in 31 C.F.R. Section 357.2 (or as
applicable to such Book-entry Security, the corresponding federal book-entry
regulations). 


 


“Security entitlement” has the meaning specified in
California UCC Section 8102(a)(17) or, in respect of any Book-entry Security,
has the meaning specified for “Security Entitlement” 


 


3

















 


in 31 C.F.R. Section 357.2  (or,
as applicable to such Book-entry Security, the corresponding federal book-entry
regulations).


 


“Settlement Date” means, as to any U.S. Government
Obligations, the date on which the purchase of such U.S. Government Obligations
shall have been settled.


 


“Supplement” has the meaning specified in Section 1.3
hereof, and shall be substantially in the form of Exhibit B hereto.


 


“Termination Date” means the earlier of (a) the date
of the payment in full in cash of each of the first six scheduled interest
payments due on the Notes under the terms of the Indenture and (b) the date of
the payment in full in cash of all obligations due and owing under this Pledge
Agreement, the Indenture and the Notes, in the event such obligations become
due and payable prior to the payment of the first six scheduled interest
payments on the Notes.


 


“Treasury Regulations” means (a) the federal
regulations contained in 31 C.F.R. Part 357 (including, without limitation,
Section 357.2, Section 357.10 through Section 357.14 and Section 357.41 through
Section 357.44 of 31 C.F.R.) and (b) to the extent substantially identical to
the federal regulations referred to in clause (a) above (as in effect from time
to time) the federal regulations governing other U.S. Government Obligations.


 


“Trustee” has the meaning specified in the recitals of
parties hereto.


 


“Uncertificated Security” has the meaning specified in
Section 8102(a)(18) of the California UCC.


 


1.2           Appointment
of the Collateral Agent. The Trustee hereby appoints the Collateral Agent
as Collateral Agent in accordance with the terms and conditions set forth
herein and the Collateral Agent hereby accepts such appointment. 


 


1.3           Pledge
and Grant of Security Interest. As security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, the Pledgor hereby assigns and
pledges to the Collateral Agent for the benefit of the Trustee and the ratable
benefit of the Holders and hereby grants to the Collateral Agent for the
benefit of the Trustee and for the ratable benefit of the Holders, a lien on and
first priority perfected security interest in all of the Pledgor’s right, title
and interest in, to and under the following property: (a) (i) the U.S.
Government Obligations identified by CUSIP No. in Schedule I to this Pledge
Agreement (the “Initial Pledged Securities”) and (ii) the U.S. Government
Obligations, if any, identified by CUSIP No. in a supplement or supplements
(each, a “Supplement,” the form of which is attached hereto as Exhibit B) (the
“Additional Pledged Securities” and, together with the Initial Pledged
Securities, the “Pledged Securities”) and the certificates representing the
Pledged Securities (if any), the scheduled payments of principal and interest
thereon which will be sufficient to provide for payment in full of the first
six scheduled interest payments due on the Notes, (b) the security entitlements
described in Schedule I and in each Supplement, if any, (c) the Collateral
Account, all security entitlements from time to time carried in the Collateral
Account, all funds held therein and all certificates and instruments, if any,
from time to time representing or evidencing the Collateral Account, (d) all
Collateral Investments (as hereinafter defined) from time to time and all
certificates and instruments, if any, 


 


4

















 


representing or evidencing the Collateral Investments, and any and all
security entitlements to the Collateral Investments, and any and all related
securities accounts in which any security entitlements to the Collateral Investments
is carried, (e) all notes, certificates of deposit, deposit accounts, checks
and other instruments, if any, from time to time hereafter delivered to or
otherwise possessed by the Collateral Agent for or on behalf of the Pledgor and
specifically designated by the Pledgor to be in substitution for any or all of
the then existing Collateral, (f) all interest, dividends, cash, instruments
and other property, if any, from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then existing
Collateral and (g) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a)-(f) of this Section 1.3) and, to the extent not
otherwise included, all (i) payments under insurance (whether or not the
Trustee is the loss payee thereof) or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any of the
foregoing Collateral and (ii) cash proceeds of any and all of the foregoing
Collateral (such property described in clauses (a) through (g) of this Section
1.3 being collectively referred to herein as the “Collateral”). Without
limiting the generality of the foregoing, this Pledge Agreement secures the
payment of all amounts that constitute part of the Obligations and would be
owed by the Pledgor to the Trustee under the Notes, the Indenture, this Pledge
Agreement and any other transaction documents related thereto but for the fact
that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Pledgor.


 


SECTION 2.  Establishment
and Maintenance of Collateral Account.


 


(a)           Prior
to or concurrently with the execution and delivery hereof, the Collateral Agent
shall establish the Collateral Account on its books as a separate account
segregated from all other custodial or collateral accounts, at its office at
707 Wilshire Blvd., 17th Floor, Los Angeles, CA 90017. The Pledgor and the
Collateral Agent will maintain the Collateral Account as a securities account
with the Collateral Agent in the State of California. The following provisions
shall apply to the establishment and maintenance of the Collateral Account:


 


(i)                                     The
Collateral Agent shall cause the Collateral Account to be, and the Collateral
Account shall be, separate from all other accounts maintained by the Collateral
Agent.


 


(ii)                                  The
Collateral Agent shall, in accordance with all applicable laws, have sole
dominion and control over the Collateral Account.


 


(iii)                               It
shall be a term and condition of the Collateral Account and the Pledgor
irrevocably instructs the Collateral Agent, notwithstanding any other term or
condition to the contrary in any other agreement, that no amount (including
interest on Collateral Investments) shall be released to or for the account of,
or withdrawn by or for the account of, the Pledgor or any other Person except
as expressly provided in this Pledge Agreement or as ordered by a court of
competent jurisdiction.


 


(b)           On
or prior to (i) the First Closing Date and (ii) the relevant Optional Closing
Date, if any, the Pledgor shall transfer, or cause to be transferred, to the
Collateral Agent, in the 


 


5

















 


case of (i), approximately $21,357,047.30 or, in the case of (ii), an
additional amount in cash to be set forth in the relevant Supplement, which
amount shall be sufficient for the Collateral Agent to purchase the Additional
Pledged Securities, in each case by depositing all such funds into the
Collateral Account. The Collateral Account shall be subject to such applicable
laws, and such applicable regulations of the Board of Governors of the Federal
Reserve System and of any other appropriate banking or governmental authority,
as may now or hereafter be in effect.


 


(c)           As
soon as practicably possible after receipt of the amount referred to in Section
2(b) (and not later than the Business Day following (A) the First Closing Date
or (B) the relevant Optional Closing Date, as the case may be), (i) the
Collateral Agent shall apply such amount to purchase (1) in the case of (A)
above, the U.S. Government Obligations (in the name of the Collateral Agent)
listed on Schedule I hereto, or (2) in the case of (B) above, the U.S.
Government Obligations (in the name of the Collateral Agent) listed on the
relevant Supplement, and, in each case, credit such U.S. Government Obligations
to the Collateral Account as Collateral hereunder; and (ii) the Collateral
Agent shall ensure that, on the Settlement Date of such U.S. Government
Obligations, the FRB indicates by book-entry that those U.S. Government
Obligations being settled on such date are credited to the FRB Account.


 


(d)           The
Collateral Agent will, from time to time, reinvest the proceeds of Collateral
that may mature or be sold in such Collateral Investments (in the name of the
Collateral Agent) as it will be directed in writing by the Pledgor, and cause
such Collateral Investments to be credited to the Collateral Account as
Collateral hereunder. Any such proceeds that the Pledgor directs the Collateral
Agent in writing not to reinvest in Collateral Investments shall be held in the
Collateral Account.


 


SECTION 3.  Delivery
and Control of Collateral. 


 


(a)           All
certificates or instruments representing or evidencing Collateral shall be
delivered to and held by or on behalf of the Collateral Agent pursuant hereto
and shall be in suitable form for transfer or delivery, or, at the request of
the Collateral Agent, shall be accompanied by duly executed instruments of
transfer or assignment in blank. In addition, the Collateral Agent shall have
the right at any time to exchange certificates or instruments representing or
evidencing Collateral for certificates or instruments of smaller or larger
denominations.


 


(b)           With
respect to any Collateral that constitutes a security and is not represented or
evidenced by a certificate or instrument, the Pledgor shall cause the issuer
thereof either (i) to register the Collateral Agent as the registered owner of
such security or (ii) to agree in writing with the Collateral Agent and the
Pledgor that such issuer will comply with instructions with respect to such
security originated by the Collateral Agent without further consent of the
Pledgor, the terms of such agreement to be consistent with the terms of this
Agreement (if applicable).


 


(c)           With
respect to any Collateral that constitutes a security entitlement, the Pledgor
shall cause the securities intermediary (including, as applicable, the
Collateral Agent) with respect to such security entitlement either (i) to
identify in its records the Collateral Agent as the entitlement holder of such
security entitlement against such securities intermediary or (ii) to 


 


6

















 


agree in writing with the Pledgor and the Collateral Agent that such
securities intermediary will comply with entitlement orders (that is,
notifications communicated to such securities intermediary directing transfer
or redemption of the financial asset to which Pledgor has a security
entitlement) originated by the Collateral Agent without further consent of the
Pledgor, the terms of such agreement to be consistent with the terms of this
Agreement (if applicable).


 


(d)           With
respect to any Collateral that constitutes a securities account, the Pledgor
will comply with subsection (c) of this Section 3 with respect to all security
entitlements carried in such securities account.


 


(e)           Concurrently
with the execution and delivery of this Pledge Agreement, the Collateral Agent
is delivering, and concurrently with the execution and delivery of any
Supplement to the Pledge Agreement, the Collateral Agent will deliver, to the
Pledgor and the Initial Purchasers a duly executed certificate, in the form of
Exhibit A hereto, of an officer of the Collateral Agent.


 


(f)            [RESERVED]


 


(g)           Pledgor
hereby irrevocably authorizes the Collateral Agent at any time and from time to
time to file in the Office of the Secretary of State of Delaware and any other
filing office in the United States any initial financing statements and
amendments thereto that (a) contain a description of collateral of an equal or
lesser scope as the Collateral described in this Pledge Agreement or any
Supplement, but such description may contain greater detail than is contained
in this Pledge Agreement or any such Supplement, and (b) contain any other
information required by part 5 of Article 9 of the Uniform Commercial Code as
in effect in any applicable jurisdiction for the sufficiency or filing office
acceptance of any financing statement or amendment therein, including whether
the Pledgor is an organization, the type of organization and any organization
identification number issued to the Pledgor. 
The Pledgor agrees to furnish any such information to the Collateral
Agent promptly upon request.  The
Pledgor also ratifies its authorization for the Collateral Agent to have filed
in any Uniform Commercial Code jurisdiction any initial financing statements or
amendments thereto if filed prior to the date hereof.  A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law. 


 


SECTION 4.  Delivery
of Collateral Other than U.S. Government Obligations. 


 


(a)           Collateral
consisting of cash will be deemed to be delivered to the Collateral Agent (such
that the Collateral Agent will have an enforceable lien and security interest
thereon and therein) when it has been (and for so long as it shall remain)
deposited in or credited to the Collateral Account.


 


(b)           [RESERVED].


 


(c)           Collateral
consisting of Uncertificated Securities (other than U.S. Government
Obligations) will be deemed delivered to the Collateral Agent when the
Collateral Agent (A) shall indicate by book entry that such securities have
been credited to the Collateral Account or (B) shall receive such security (or
a financial asset based on such security) for the Collateral 


 


7

















 


Account from or at the direction of the Pledgor, and shall accept such
security (or such financial asset) for credit to the Collateral Account.


 


(d)           Collateral
consisting of securities, and represented or evidenced by certificates or
instruments (other than U.S. Government Obligations), will be deemed delivered
to the Collateral Agent when all such certificates or instruments representing
or evidencing the Collateral, including, without limitation, amounts invested
as provided in Section 5, shall be delivered to the Collateral Agent and held
by or on behalf of the Collateral Agent pursuant hereto and shall be in
registered form and specially indorsed to the Collateral Agent by an effective
endorsement, all in form and substance sufficient to convey a valid security
interest in such Collateral to the Collateral Agent or shall be credited to the
Collateral Account.


 


SECTION 5.  Investing
of Amounts in the Collateral Account. 
The Collateral Agent shall advise the Pledgor if, at any time, any
amounts shall exist in the Collateral Account uninvested, and if directed in
writing by the Pledgor, the Collateral Agent will, subject to the provisions of
Section 6 and Section 13;


 


(a)           invest
such amounts on deposit in the Collateral Account in such Cash Equivalents in
the name of the Collateral Agent as the Pledgor may select; and


 


(b)           invest
interest paid on the Cash Equivalents referred to in clause (a) above, and
reinvest other proceeds of any such Cash Equivalents that may mature or be sold,
in each case in such Cash Equivalents in the name of the Collateral Agent, as
the Pledgor may select (the Cash Equivalents referred to in clauses (a) and (b)
above, together with the Pledged Securities, being collectively referred to
herein as “Collateral Investments”); provided, however, that the amount in cash
and Pledged Securities on deposit in the Collateral Account, collectively, at
any time during the term of this Pledge Agreement, is sufficient to provide for
the payment in full of the remaining interest payments at such time on the
Notes up to and including the sixth scheduled interest payment. Interest and
proceeds that are not invested or reinvested in Collateral Investments as
provided above shall be deposited and held in the Collateral Account. Except as
otherwise provided in Sections 11 and 12, the Collateral Agent shall not be
liable for any loss in the investment or reinvestment of amounts held in the
Collateral Account. The Collateral Agent is not at any time under any duty to
advise or make any recommendation for the purchase, sale, retention or
disposition of the Collateral Investments.


 


(c)           If
the Pledgor does not select Cash Equivalents when required to do so pursuant
the preceding subparagraphs (a) or (b) of this Section 5, then the Collateral
Agent shall, without any further direction from the Pledgor, invest any
uninvested amounts on deposit in the Collateral Account in money market funds
invested in government obligations for which the Collateral Agent or an
affiliate acts as an investment provider.


 


SECTION 6.  Disbursements.  The Collateral Agent shall hold the
Collateral in the Collateral Account and release the same, or a portion
thereof, only as follows:


 


(a)           Prior
to each of the first six scheduled interest payments on the Notes, the
Collateral Agent shall release from the Collateral Account and pay to the
Trustee for the benefit of, and payment to, the Holders of the Notes in
accordance with the provisions of the Indenture 


 


8

















 


an amount sufficient to pay the interest due on the Notes on such
interest payment date and will take any action necessary to provide for the
payment of the interest on the Notes to the Holders in accordance with the
payment provisions of the Indenture from (and to the extent of) proceeds of the
Collateral in the Collateral Account. Nothing in this Section 6 shall affect
the Collateral Agent’s rights to apply the Collateral to the payments of
amounts due on the Notes upon acceleration thereof.


 


(b)           If,
prior to the date on which the sixth scheduled interest payment on the Notes is
due:


 


(i)                                     an
Event of Default under the Notes occurs and is continuing and


 


(ii)                                  the
Trustee or the Holders of 25% in aggregate principal amount of the Notes
accelerate the Notes by declaring the principal amount of the Notes to be
immediately due and payable in accordance with the provisions of the Indenture,
except for the occurrence and continuance of an Event of Default under Sections
8.1(4) and (5) of the Indenture, upon which the Notes will be accelerated
automatically pursuant to the Indenture, 


 


then the Collateral Agent shall promptly, subject to applicable
bankruptcy laws, release the proceeds from the Collateral Account and pay to
the Trustee for the benefit of, and payment to, the Holders of the Notes in
accordance with the provisions of the Indenture. Distributions from the
Collateral Account shall be applied, for the ratable benefit of the Holders, as
follows:


 


(x)                                   first,
to any accrued and unpaid interest on the Notes and


 


(y)                                 second,
to the extent available, to the repayment of the remaining Obligations,
including the principal amount of the Notes.


 


Any surplus of such proceeds held by the Collateral
Agent and remaining after payment in full of all of the Obligations shall be
paid over to the Pledgor.


 


(c)           [RESERVED]


 


(d)           In
the event that the Collateral held in the Collateral Account is less than 100%
of the amount sufficient, according to the written report of
PricewaterhouseCoopers LLP or another nationally recognized firm of independent
public accountants selected by the Pledgor, to provide for payment in full of
the first six scheduled interest payments due on the Notes (or, in the event an
interest payment or payments have been made, an amount sufficient to provide for
payment in full of all interest payments remaining, up to and including the
sixth scheduled interest payment), the Pledgor shall deposit cash in the
Collateral Account in the amount of such deficiency within five (5) days of the
occurrence of such deficiency.


 


(e)           In
the event that the Collateral held in the Collateral Account exceeds 100% of
the amount sufficient, according to the written report of
PricewaterhouseCoopers LLP or another nationally recognized firm of independent
public accountants selected by the Pledgor, to provide for payment in full of
the first six scheduled interest payments due on the Notes (or, in the event an
interest payment or payments have been made, an amount sufficient to provide
for payment in 


 


9

















 


full of all interest payments remaining, up to and including the sixth
scheduled interest payment), the Collateral Agent shall release to the Pledgor,
at the Pledgor’s written request, accompanied by the written report prepared by
PricewaterhouseCoopers LLP or such other nationally recognized firm of
independent public accountants, any such excess Collateral.


 


(f)            Upon
the release of any Collateral from the Collateral Account, in accordance with
the terms of this Pledge Agreement, the security interest and lien evidenced by
this Pledge Agreement in such released Collateral will automatically terminate
and be of no further force and effect; provided that the foregoing shall not
affect the security interest and lien on any Collateral not so released.


 


(g)           Except
as expressly provided in this Section 6, nothing contained in this Pledge
Agreement shall (i) afford the Pledgor any right to issue entitlement orders
with respect to any security entitlement to the Pledged Securities or
Collateral Investments or any securities account in which any such security
entitlement may be carried, or otherwise afford the Pledgor control of any such
security entitlement or (ii) otherwise give rise to any rights of the Pledgor
with respect to the Collateral Investments, any security entitlement thereto or
any securities account in which any such security entitlement may be carried,
other than the Pledgor’s rights under this Pledge Agreement as the beneficial
owner of Collateral pledged to and subject to the exclusive dominion and
control (including, without limitation, securities control) of the Collateral
Agent in its capacity as such (and not as a securities intermediary). The
Pledgor acknowledges, confirms and agrees that the Collateral Agent holds a
first priority perfected security interest, lien and security entitlement to
the Collateral Investments solely as collateral agent for the Trustee and the
Holders and not as a securities intermediary for the Pledgor.


 


SECTION 7.  Representations
and Warranties.  The Pledgor hereby
represents and warrants, as of the date hereof, that:


 


(a)           The
execution and delivery by the Pledgor of, and the performance by the Pledgor of
its obligations under, this Pledge Agreement will not contravene any provision
of applicable law or the certificate of incorporation, bylaws or equivalent
organizational instruments of the Pledgor or any material agreement or other
material instrument binding upon the Pledgor or any of its subsidiaries or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Pledgor or any of its subsidiaries, or result in the
creation or imposition of any lien on any assets of the Pledgor, except for the
lien and security interests granted under this Pledge Agreement; no consent,
approval, authorization or order of, or qualification with, and no notice to or
filing with, any governmental body or agency or other third party is required
(i) for the performance by the Pledgor of its obligations under this Pledge
Agreement, (ii) for the pledge by the Pledgor of the Collateral pursuant to
this Pledge Agreement or for the execution, delivery or performance of this
Agreement by the Pledgor or (iii) for the perfection or maintenance of the
pledge, assignment and security interest created hereby (including the first
priority nature of such pledge, assignment or security interest), except for
the filing of financing and continuation statements under the Uniform
Commercial Code of applicable jurisdictions which financing statements have
been delivered pursuant to Section 3(g) hereof, or (iv) except for any such
consents, approvals, authorizations or orders required to be obtained by the
Collateral Agent (or the Holders) for reasons other than the consummation of 


 


10

















 


this transaction, for the exercise by the Collateral Agent of the
rights provided for in this Pledge Agreement or the remedies in respect of the
Collateral pursuant to this Pledge Agreement.


 


(b)           The
Pledgor is the legal and beneficial owner of the Collateral, free and clear of
any lien or claims of any Person (except for the lien and security interests
granted under this Pledge Agreement). No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any public office other than the financing statements, if any, to be
filed pursuant to this Pledge Agreement.


 


(c)           This
Pledge Agreement has been duly authorized, validly executed and delivered by
the Pledgor and (assuming the due authorization and valid execution and
delivery of this Pledge Agreement by each of the Trustee and the Collateral
Agent and enforceability of the Pledge Agreement against each of the Trustee
and the Collateral Agent in accordance with its terms) constitutes a valid and
binding agreement of the Pledgor, enforceable against the Pledgor in accordance
with its terms, except as (i) the enforceability hereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, preference, reorganization,
moratorium or similar laws now or hereafter in effect relating to or affecting
the rights or remedies of creditors generally, (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability and the discretion of the court before which any proceeding
therefor may be brought, (iii) the exculpation provisions and rights to
indemnification hereunder may be limited by U.S. federal and state securities
laws and public policy considerations and (iv) the waiver of rights and
defenses contained in Section 13(b), Section 18.11 and Section 18.15 hereof may
be limited by applicable law.


 


(d)           Upon
the delivery to the Collateral Agent of the Collateral in accordance with the
terms hereof and the filing of the financing statements referred to in Section
3(g) hereof, the pledge of and grant of a security interest in the Collateral
securing the payment of the Obligations for the benefit of the Trustee and the
Holders will constitute a valid, first priority, perfected security interest in
such Collateral (except, with respect to proceeds, only to the extent permitted
by Section 9315 of the California UCC), enforceable as such against all
creditors of the Pledgor and any persons purporting to purchase any of the
Collateral from the Pledgor other than as permitted by the Indenture. Upon
filing of the financing statements described in Section 3(g) hereof, all
filings and other actions necessary or desirable to perfect and protect such
security interest will have been duly taken.


 


(e)           There
are no legal or governmental proceedings pending or, to the best of the
Pledgor’s knowledge, threatened to which the Pledgor or any of its subsidiaries
is a party or to which any of the properties of the Pledgor or any of its
subsidiaries is subject that would materially adversely affect the power or
ability of the Pledgor to perform its obligations under this Pledge Agreement
or to consummate the transactions contemplated hereby.


 


(f)            The
pledge of the Collateral pursuant to this Pledge Agreement is not prohibited by
law or governmental regulation (including, without limitation, Regulations T, U
and X of the Board of Governors of the Federal Reserve System) applicable to
the Pledgor.


 


(g)           No
Event of Default exists.


 


11

















 


(h)           The
Pledgor is a corporation duly organized and validly existing under the laws of
the State of Delaware.  The Pledgor’s
name as it appears in official filings in the State of Delaware is ADAPTEC,
INC.  The Pledgor’s organizational identification
number issued by the State of Delaware is 2821928.


 


SECTION 8.  Further
Assurances.  The Pledgor will,
promptly upon the request by the Collateral Agent (which request the Collateral
Agent may submit at the direction of the Holders of a majority in aggregate
principal amount of the Notes then outstanding), execute and deliver or cause
to be executed and delivered, or use its reasonable best efforts to procure,
all assignments, instruments and other documents, deliver any instruments to
the Collateral Agent and take any other actions that are necessary or desirable
to perfect, continue the perfection of, or protect the first priority of the
Collateral Agent’s security interest in and to the Collateral, to protect the
Collateral against the rights, claims or interests of third persons (other than
any such rights, claims or interests created by or arising through the
Collateral Agent) or to effect the purposes of this Pledge Agreement. Without
limiting the generality of the foregoing, the Pledgor will, if any Collateral
shall be evidenced by a promissory note or other instrument, deliver to the
Collateral Agent in pledge hereunder such note or instrument duly indorsed and
accompanied by duly executed instruments of transfer or assignment; and execute
and file such financing or continuation statements, or amendments thereto, and
such other instruments or notices, as may be necessary, or as the Collateral
Agent may reasonably request, in order to perfect and preserve the pledge,
assignment and first priority perfected security interest granted or purported
to be granted hereby. The Pledgor will promptly pay all costs incurred in
connection with any of the foregoing within 45 days of receipt of an invoice
therefor. The Pledgor also agrees, whether or not requested by the Collateral
Agent, to use its reasonable best efforts to perfect or continue the perfection
of, or to protect the first priority of, the Collateral Agent’s security
interest in and to the Collateral, and to protect the Collateral against the
rights, claims or interests of third persons (other than any such rights,
claims or interests created by or arising through the Collateral Agent).


 


SECTION 9.  Covenants.  The Pledgor covenants and agrees with the
Collateral Agent, Trustee and the Holders that from and after the date of this
Pledge Agreement until the Termination Date:


 


(a)           it
will not (i) (and will not purport to) sell or otherwise dispose of, or grant
any option or warrant with respect to, any of the Collateral nor (ii) create or
permit to exist any lien upon or with respect to any of the Collateral (except
for the liens and security interests granted under this Pledge Agreement and
any lien created by or arising through the Collateral Agent) and at all times
will be the sole beneficial owner of the Collateral;


 


(b)           it
will not (i) enter into any agreement or understanding that restricts or
inhibits or purports to restrict or inhibit the Trustee’s or the Collateral
Agent’s rights or remedies hereunder, including, without limitation, the Collateral
Agent’s right to sell or otherwise dispose of the Collateral or (ii) fail to
pay or discharge any tax, assessment or levy of any nature with respect to its
beneficial interest in the Collateral not later than three Business Days prior
to the date of any proposed sale under any judgment, writ or warrant of
attachment with respect to the Collateral;


 


12

















 


(c)           it
will maintain its jurisdiction of organization in the State of Delaware, or
upon 30 days’ prior written notice to the Collateral Agent, in another
jurisdiction where all actions required by Sections 3(g) and 8 have been taken
with respect to the Collateral;


 


(d)           it
will, and will cause the Trustee and the Collateral Agent to, execute and
deliver on or prior to any Optional Closing Date, a Supplement to this Pledge
Agreement substantially in the form of Exhibit B hereto, and take such other
actions as shall be necessary to grant to the Collateral Agent, for the benefit
of the Trustee and the ratable benefit of the Holders, a valid assignment of
and security interest in the Additional Pledged Securities and the related
security entitlements; and


 


(e)           it
will not, and acknowledges that it is not authorized to, file any financing
statement or amendment or termination statement with respect to any financing
statement  in favor of the Collateral
Agent without the prior written consent of Collateral Agent and agrees that it
will not do so without the prior written consent of Collateral Agent, subject
to the Pledgor’s rights under Section 9509(d)(2) of the California UCC.


 


SECTION 10.  Power
of Attorney; Agent May Perform.


 


(a)           Subject
to the terms of this Pledge Agreement, the Pledgor hereby appoints and
constitutes the Collateral Agent as the Pledgor’s attorney-in-fact (with full
power of substitution) to exercise to the fullest extent permitted by law all
of the following powers upon and at any time after the occurrence and during
the continuance of an Event of Default:


 


(i)                                     collection
of proceeds of any Collateral;


 


(ii)                                  conveyance
of any item of Collateral to any purchaser thereof;


 


(iii)                               giving
of any notices or recording of any liens hereof; and


 


(iv)                              paying
or discharging taxes or liens levied or placed upon the Collateral, the
legality or validity thereof and the amounts necessary to discharge the same to
be determined by the Collateral Agent in its sole reasonable discretion, and
such payments made by the Collateral Agent to become part of the Obligations
secured hereby, due and payable immediately upon demand. The Collateral Agent’s
authority under this Section 10 shall include, without limitation, the
authority to endorse and negotiate any checks or instruments representing
proceeds of Collateral in the name of the Pledgor, execute and give receipt for
any certificate of ownership or any document constituting Collateral, transfer
title to any item of Collateral, sign the Pledgor’s name on all financing
statements (to the extent permitted by applicable law) or any other documents
necessary or appropriate to preserve, protect or perfect the security interest
in the Collateral and to file the same, prepare, file and sign the Pledgor’s
name on any notice of lien (to the extent permitted by applicable law), and to
take any other actions arising from or necessarily incident to the powers
granted to the Trustee or the Collateral Agent in this Pledge Agreement.


 


13

















 


This power of attorney is coupled with an interest and
is irrevocable by the Pledgor.


 


(b)           If
the Pledgor fails to perform any agreement contained herein, the Collateral
Agent may, but is not obligated to, after providing to the Pledgor notice of
such failure and five Business Days to effect such performance, itself perform,
or cause performance of, such agreement, and the expenses of the Collateral
Agent incurred in connection therewith shall be payable by the Pledgor under
Section 14.


 


SECTION 11.  No
Assumption of Duties; Reasonable Care. 
The rights and powers granted to the Collateral Agent hereunder are
being granted in order to preserve and protect the security interest of the
Collateral Agent for the benefit of the Trustee and the Holders in and to the
Collateral granted hereby and shall not be interpreted to, and shall not impose
any duties on, the Collateral Agent in connection therewith other than those
expressly provided herein or imposed under applicable law. Except as provided
by applicable law or by the Indenture, the Collateral Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords similar property
held by the Collateral Agent for similar accounts, it being understood that the
Collateral Agent in its capacity as such


 


(a)           may
consult with counsel of its selection and the advice of such counsel or any
opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon; and


 


(b)           shall
not have any responsibility for


 


(i)                                     ascertaining
or taking action with respect to calls, conversions, exchanges, maturities or
other matters relative to any Collateral, whether or not the Collateral Agent
has or is deemed to have knowledge of such matters,


 


(ii)                                  taking
any necessary steps for the existence, enforceability or perfection of any
security interest of the Collateral Agent or to preserve rights against any
parties with respect to any Collateral or


 


(iii)                               except
as otherwise set forth in Section 5, investing or reinvesting any of the
Collateral, provided,
however, that in the case of clause (a) and clause (b) of this
sentence, nothing contained in this Pledge Agreement shall relieve the
Collateral Agent of any responsibilities as a securities intermediary under
applicable law.


 


In no event shall the Collateral Agent be liable for
the existence, validity, enforceability or perfection of any security interest
of the Collateral Agent, or for special indirect or consequential damages or
lost profits or loss of business, arising in connection with this Agreement.


 


SECTION 12.  Indemnity.  The Pledgor shall fully indemnify, hold
harmless and defend the Collateral Agent and its directors and officers from
and against any and all claims, losses, 


 


14

















 


actions, obligations, liabilities and expenses, including reasonable
defense costs, reasonable investigative fees and costs, and reasonable legal
fees, expenses, and damages arising from the Collateral Agent’s appointment and
performance as Collateral Agent under this Pledge Agreement, except to the
extent that such claim, action, obligation, liability or expense is directly
caused by the bad faith, gross negligence or willful misconduct of such
indemnified person. The provisions of this Section 12 shall survive termination
of this Pledge Agreement and the resignation and removal of the Collateral
Agent.


 


SECTION 13.  Remedies
upon Event of Default.  Subject to
Section 6(b), if any Event of Default under the Indenture shall have occurred
and be continuing and the Notes shall have been accelerated in accordance with
the provisions of the Indenture:


 


(a)           The
Trustee, the Collateral Agent and the Holders shall have, in addition to all
other rights given by law or by this Pledge Agreement or the Indenture, all of
the rights and remedies with respect to the Collateral of a secured party upon
default under the California UCC (whether or not the California UCC applies to
the affected Collateral) at that time. In addition, with respect to any
Collateral that shall then be in or shall thereafter come into the possession
or custody of the Collateral Agent, the Collateral Agent may and, at the written
direction of the Trustee or the Holders of a majority in aggregate principal
amount of the Notes then outstanding, shall appoint a broker or other expert to
sell or cause the same to be sold at any broker’s board or at public or private
sale, in one or more sales or lots, at such price or prices such broker or
other expert may deem commercially reasonable, for cash or on credit or for
future delivery, without assumption of any credit risk. The purchaser of any or
all Collateral so sold shall thereafter hold the same absolutely, free from any
claim, encumbrance or right of any kind whatsoever created by or through the
Pledgor. Unless any of the Collateral threatens, in the reasonable judgment of
the Collateral Agent, to decline speedily in value, the Collateral Agent will
give the Pledgor reasonable notice of the time and place of any public sale
thereof, or of the time after which any private sale or other intended
disposition is to be made. Any sale of the Collateral conducted in conformity
with reasonable commercial practices of banks, insurance companies, commercial
finance companies, or other financial institutions disposing of property
similar to the Collateral shall be deemed to be commercially reasonable. Any
requirements of reasonable notice shall be met if notice of the time and place
of any public sale or the time after which any private sale is to be made is
given to the Pledgor as provided in Section 18.1 hereof at least ten (10) days
before the time of the sale or disposition. The Collateral Agent or any Holder
may, in its own name or in the name of a designee or nominee, buy any of the
Collateral at any public sale and, if permitted by applicable law, at any
private sale. The Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Collateral Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. All expenses
(including court costs and reasonable attorneys’ fees, expenses and
disbursements) of, or incident to, the enforcement of any of the provisions
hereof shall be recoverable from the proceeds of the sale or other disposition
of the Collateral.


 


(b)           The
Pledgor further agrees to use its reasonable best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Collateral pursuant to this Section 13 valid and binding
and in compliance with any and all other applicable requirements of law. The
Pledgor further agrees that a breach of any of the


 


15

















 


covenants contained in this Section 13 will cause irreparable injury to
the Trustee and the Holders, that the Trustee and the Holders have no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section 13 shall be specifically enforceable
against the Pledgor, and the Pledgor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except
for a defense that no Event of Default has occurred and is continuing or that
the Notes have been accelerated in accordance with the provisions of the
Indenture.


 


(c)           All
cash proceeds received by the Collateral Agent in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
may, in the discretion of the Collateral Agent, be held by the Collateral Agent
as collateral for, and/or then or at any time thereafter applied (after payment
of any amounts payable to the Collateral Agent or the Trustee pursuant to
Section 14) by the Collateral Agent for the ratable benefit of the Holders
first against any accrued and unpaid interest on the Notes and thereafter
against the remaining Obligations. Any surplus of such cash or cash proceeds
held by the Collateral Agent and remaining after payment in full of all of the
Obligations shall be paid over to the Pledgor.


 


(d)           The
Collateral Agent may, but is not obligated to, exercise any and all rights and
remedies of the Pledgor in respect of the Collateral.


 


(e)           Subject
to and in accordance with the terms of this Pledge Agreement, all payments
received by the Pledgor in respect of the Collateral shall be received in trust
for the benefit of the Collateral Agent, shall be segregated from other funds
of the Pledgor and shall be forthwith paid over to the Collateral Agent in the
same form as so received (with any necessary endorsement).


 


(f)            The
Collateral Agent may, without notice to the Pledgor except as required by law
and at any time or from time to time, charge, set-off and otherwise apply all
or any part of the Obligations against the Collateral Account or any part
thereof.


 


(g)           The
Pledgor shall cease to be entitled to direct the investment of amounts held in
the Collateral Account under Section 5 hereof and the Collateral Agent shall
not accept any direction from the Pledgor to invest amounts held in the
Collateral Account.


 


SECTION 14.  Fees
and Expenses.  Pledgor agrees to pay
to Collateral Agent the fees as may be agreed upon from time to time in
writing. The Pledgor will upon demand pay to the Trustee and the Collateral
Agent the amount of any and all expenses, including, without limitation, the
reasonable fees, expenses and disbursements of counsel, experts and agents
retained by the Trustee and the Collateral Agent, that the Trustee and the
Collateral Agent may incur in connection with


 


(a)           the
review, negotiation and administration of this Pledge Agreement;


 


(b)           the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral;


 


(c)           the
exercise or enforcement of any of the rights of the Collateral Agent, the
Trustee and the Holders hereunder; or


 


16

















 


(d)           the
failure by the Pledgor to perform or observe any of the provisions hereof.


 


SECTION 15.  Security
Interest Absolute.  All rights of
the Collateral Agent, the Trustee and the Holders and security interests
hereunder, and all obligations of the Pledgor hereunder, shall be absolute and
unconditional irrespective of:


 


(a)           any
lack of validity or enforceability of the Indenture or any other agreement or
instrument relating thereto;


 


(b)           any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Obligations, or any other amendment or waiver of or any consent
to any departure from the Indenture;


 


(c)           any
exchange, surrender, release or non-perfection of any liens on any other
collateral for all or any of the Obligations;


 


(d)           any
change, restructuring or termination of the corporate structure or the
existence of the Pledgor or any of its subsidiaries;


 


(e)           to
the extent permitted by applicable law, any other circumstance which might
otherwise constitute a defense available to, or a discharge of, the Pledgor in
respect of the Obligations or of this Pledge Agreement; or


 


(f)            any
manner of application of other collateral, or proceeds thereof, to all or any
item of the Obligations, or any manner of sale or other disposition of any item
of Collateral for all or any of the Obligations.


 


SECTION 16.  Collateral
Agent’s Representations, Warranties and Covenants.  The Collateral Agent (in its capacity as
securities intermediary) represents and warrants that it is as of the date
hereof, and it agrees that for so long as it maintains the Collateral Account
and acts as the securities intermediary pursuant to this Pledge Agreement it
shall be a securities intermediary and a FRB Member. In furtherance of the
foregoing, the Collateral Agent (in its capacity as securities intermediary)
hereby:


 


(a)           represents
and warrants that it is a commercial bank that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity hereunder and with respect to the Collateral Account;


 


(b)           represents
and warrants that it maintains the FRB Account with the FRB;


 


(c)           agrees
that the Collateral Account shall be an account to which financial assets may
be credited, and undertakes to treat the Collateral Agent (in its capacity as
such) as entitled to exercise rights that comprise (and entitled to the
benefits of) such financial assets, and entitled to exercise the rights of an
entitlement holder in the manner contemplated by the California UCC;


 


(d)           hereby
represents that, subject to applicable law, it has not granted, and covenants
that so long as it acts as a securities intermediary hereunder it shall not
grant, control (including


 


17

















 


without limitation, securities control) over or with respect to any
Collateral credited to any Collateral Account from time to time to any other
Person other than the Collateral Agent (in its capacity as such);


 


(e)           covenants
that it shall not, subject to applicable law, knowingly take any action
inconsistent with, and represents and covenants that it is not and so long as
this Pledge Agreement remains in effect will not knowingly become, party to any
agreement the terms of which are inconsistent with, the provisions of this
Pledge Agreement;


 


(f)            agrees
that any item of property credited to the Collateral Account shall be treated
as a financial asset;


 


(g)           agrees
that any item of Collateral credited to the Collateral Account shall not be
subject to any security interest, lien or right of set-off in favor of it as
securities intermediary, except as may be expressly permitted under the
Indenture and this Pledge Agreement;


 


(h)           agrees
to maintain the Collateral Account and maintain appropriate books and records
in respect thereof in accordance with its usual procedures and subject to the
terms of this Pledge Agreement;


 


(i)            agrees
that, with respect to any Collateral that constitutes a security entitlement,
it shall comply with the provisions of Section 3(c)(i) or (ii) of this Pledge
Agreement and, with respect to any Collateral that constitutes a securities
account, it shall comply with the provisions of Section 3(c)(i) or (ii) of this
Pledge Agreement with respect to all security entitlements carried in such
securities account; and


 


(j)            agrees
that if its jurisdiction as securities intermediary shall change from that
jurisdiction specified in Section 17, it will promptly notify the Collateral
Agent and the Trustee of such change and of such new jurisdiction.


 


SECTION 17.  Collateral
Agent’s Jurisdiction as Securities Intermediary.  The parties hereby agree that the Collateral Agent’s jurisdiction
as securities intermediary for purposes of Section 8110(e) of the California
UCC and Section 357.11 of the Treasury Regulations or the corresponding U.S.
federal regulations as they pertain to this Pledge Agreement, the Collateral
Account and the security entitlements relating thereto, shall be the State of
California.


 


SECTION 18.  Miscellaneous
Provisions.


 


18.1         Notices.
Any notice, approval, direction, consent or other communication shall be
sufficiently given if in writing and delivered in person or mailed by first
class mail, commercial courier service or telecopier communication, addressed
as follows:


 


if to the Pledgor:


 


Adaptec, Inc.


691 South Milpitas Blvd.


Milpitas, CA 
95035


Attention: General Counsel and Assistant Corporate
Secretary


Telecopier No.: (408) 262-2533


 


18

















 


if to the Collateral Agent:


 


Wells Fargo Bank, N.A.


707 Wilshire Blvd., 17th Floor


Los Angeles, CA 90017


Attention: 
Corporate Trust Department


Telecopier No.: (213) 614-3355


 


if to the Trustee:


 


Wells Fargo Bank, N.A.


707 Wilshire Blvd., 17th Floor


Los Angeles, CA 90017


Attention: 
Corporate Trust Department


Telecopier No.: (213) 614-3355


 


or, as to any such party, at such other address as shall be designated
by such party in a written notice to each other party complying as to delivery
with the terms of this Section. All such notices and other 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 confirmed, if telecopied; and on the next
Business Day if timely delivered to an air courier guaranteeing overnight
delivery.


 


18.2         No
Adverse Interpretation of Other Agreements.  This Pledge Agreement may not be used to interpret another
pledge, security or debt agreement of the Pledgor or any subsidiary thereof. No
such pledge, security or debt agreement (other than the Indenture) may be used
to interpret this Pledge Agreement.


 


18.3         Severability.  The provisions of this Pledge Agreement are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or provision,
or part thereof, and shall not in any manner affect such clause or provision in
any other jurisdiction or any other clause or provision of this Pledge
Agreement in any jurisdiction.


 


18.4         Headings.  The headings in this Pledge Agreement 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.


 


18.5         Counterpart
Originals.  This Pledge Agreement
may be signed in two or more counterparts, each of which shall be deemed an
original, but all of which shall together constitute one and the same
agreement.


 


18.6         Benefits
of Pledge Agreement.  Nothing in
this Pledge Agreement, express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder, and the Holders, any benefit
or any legal or equitable right, remedy or claim under this Pledge Agreement.


 


19

















 


18.7         Amendments,
Waivers and Consents.  Any amendment
or waiver of any provision of this Pledge Agreement and any consent to any
departure by the Pledgor, the Trustee or the Collateral Agent or from any
provision of this Pledge Agreement shall be effective only if made or duly
given in compliance with all of the terms and provisions of the Indenture, and
none of the Trustee, the Collateral Agent, the Pledgor, or any Holder shall be
deemed, by any act, delay, indulgence, omission or otherwise, to have waived
any right or remedy hereunder or to have acquiesced in any default or Event of
Default or in any breach of any of the terms and conditions hereof. Failure of
the Trustee, the Pledgor, the Collateral Agent or any Holder to exercise, or
delay in exercising, any right, power or privilege hereunder shall not preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. A waiver by the Trustee, the Pledgor, the Collateral Agent or any
Holder of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy that the Trustee, the Pledgor, the
Collateral Agent or such Holder would otherwise have on any future
occasion.  The Collateral Agent and the Trustee shall sign any amendment hereof
authorized or permitted pursuant to Section 12.1(c) of the Indenture if the
amendment does not adversely affect the rights, duties,  liabilities or immunities of the Collateral
Agent and the Trustee. If it does, the Collateral Agent and the Trustee may, in
their sole discretion, but need not, sign it. In signing or refusing to sign
such amendment, the Collateral Agent and the Trustee shall be entitled to
receive and, subject to Section 11 and 18.12, shall be fully protected in
relying upon, an Opinion of Counsel (as defined in the Indenture) stating that
such amendment is authorized or permitted by the Indenture.  The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any rights or remedies provided by law.


 


18.8         [RESERVED]


 


18.9         Continuing
Security Interest; Termination.


 


(a)           This
Pledge Agreement shall create a continuing first priority perfected security
interest in and to the Collateral and shall, unless otherwise provided in the
Indenture or in this Pledge Agreement, remain in full force and effect until
the Termination Date. This Pledge Agreement shall be binding upon the parties
hereto and their respective transferees, successors and assigns, and shall
inure, together with the rights and remedies of the Trustee and the Collateral
Agent hereunder, to the benefit of the Trustee, the Collateral Agent, the
Pledgor, the Holders and their respective successors, transferees and assigns.


 


(b)           Upon
the Termination Date, the pledge, assignment and security interest granted
hereby shall terminate and all rights to the Collateral shall revert to the
Pledgor. At such time, the Collateral Agent shall, in accordance with the
Pledgor’s instructions, promptly reassign and redeliver to the Pledgor all of
the Collateral hereunder that has not been sold, disposed of, retained or
applied by the Collateral Agent in accordance with the terms of this Pledge
Agreement and the Indenture and execute and deliver to the Pledgor such
documents as the Pledgor shall reasonably request to evidence such termination.
Such reassignment and redelivery shall be without warranty by or recourse to
the Collateral Agent or the Trustee in its capacity as such, except as to the
absence of any liens on the Collateral created by or arising through the
Collateral Agent or the Trustee, and shall be at the reasonable expense of the
Pledgor.


 


20

















 


18.10       Survival
Provisions.  All representations,
warranties and covenants contained herein shall survive the execution and
delivery of this Pledge Agreement, and shall terminate only upon the
termination of this Pledge Agreement. The obligations of the Pledgor under
Sections 12 and 14 hereof and the obligations of the Collateral Agent under
Section 18.9(b) hereof shall survive the termination of this Pledge Agreement.


 


18.11       Waivers.  The Pledgor waives presentment and demand
for payment of any of the Obligations, protest and notice of dishonor or
default with respect to any of the Obligations, and all other notices to which
the Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.


 


18.12       Authority
of the Collateral Agent.


 


(a)           The
Collateral Agent shall have and be entitled to exercise all powers hereunder
that are specifically granted to the Collateral Agent by the terms hereof,
together with such powers as are reasonably incident thereto. The Collateral
Agent may perform any of its duties hereunder or in connection with the
Collateral by or through agents or attorneys, shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder and shall be entitled to retain counsel and to act in
reliance upon the advice of counsel concerning all such matters. Except as
otherwise expressly provided in this Pledge Agreement or the Indenture, neither
the Collateral Agent nor any director, officer, employee, attorney or agent of
the Collateral Agent shall be liable to the Pledgor for any action taken or
omitted to be taken by the Collateral Agent, in its capacity as Collateral
Agent, hereunder, except for its own bad faith, gross negligence or willful
misconduct, and the Collateral Agent shall not be responsible for the validity,
effectiveness or sufficiency hereof or of any document or security furnished pursuant
hereto. The Collateral Agent and its directors, officers, employees, attorneys
and agents shall be entitled to rely conclusively on any communication,
instrument or document believed by it or them to be genuine and correct and to
have been signed or sent by the proper Person or Persons. The Collateral Agent
shall have no duty to cause any financing statement or continuation statement
to be filed in respect of the Collateral.


 


(b)           The
Pledgor acknowledges that the rights and responsibilities of the Collateral
Agent under this Pledge Agreement with respect to any action taken by the
Collateral Agent or the exercise or non-exercise by the Collateral Agent of any
option, right, request, judgment or other right or remedy provided for herein
or resulting or arising out of this Pledge Agreement shall, as between the
Collateral Agent and the Holders, be governed by the Indenture and by such
other agreements with respect thereto as may exist from time to time among
them, but, as between the Collateral Agent and the Pledgor, the Collateral
Agent shall be conclusively presumed to be acting as agent for the Trustee and
the Holders with full and valid authority so to act or refrain from acting, and
the Pledgor shall not be obligated or entitled to make any inquiry respecting
such authority.


 


18.13       Final
Expression.  This Pledge Agreement,
together with the Indenture and any other agreement executed among the parties
to this Agreement in connection herewith, is intended by the parties as a final
expression of this Pledge Agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.


 


21

















 


18.14       Rights
of Holders.  No Holder shall have
any independent rights hereunder other than those rights granted to individual
Holders pursuant to Sections 8.5, 8.6 and 8.7 of the Indenture; provided
that nothing in this subsection shall limit any rights granted to the Trustee
under the Notes or the Indenture.


 


18.15       GOVERNING
LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; WAIVER OF DAMAGES. 


 


(a)           THIS
PLEDGE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF CALIFORNIA, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF CALIFORNIA, AND, ANY DISPUTE ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE
PLEDGOR, THE TRUSTEE, THE COLLATERAL AGENT AND THE HOLDERS IN CONNECTION WITH
THIS PLEDGE AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR
OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA. NOTWITHSTANDING THE FOREGOING, THE MATTERS IDENTIFIED IN 31 C.F.R.
SECTIONS 357.10 AND 357.11 (AS IN EFFECT ON THE DATE OF THIS PLEDGE AGREEMENT)
SHALL BE GOVERNED SOLELY BY THE LAWS SPECIFIED THEREIN AND THE MATTERS
IDENTIFIED IN SECTION 9305(a)(3) OF THE CALIFORNIA UCC WILL BE GOVERNED BY THE
LAWS OF THE STATE OF CALIFORNIA.


 


(b)           THE
PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF PROCESS IN ANY SUIT, ACTION OR
PROCEEDING WITH RESPECT TO THIS PLEDGE AGREEMENT AND FOR ACTIONS BROUGHT UNDER
THE U.S. FEDERAL OR STATE SECURITIES LAWS BROUGHT IN ANY FEDERAL OR STATE COURT
LOCATED IN THE CITY OF SAN FRANCISCO (EACH A “CALIFORNIA COURT”) AND CONSENTS
THAT ALL SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING SHALL BE
MADE BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE PLEDGOR AT
THE ADDRESS INDICATED IN SECTION 18.1. EACH OF THE PARTIES HERETO SUBMITS TO
THE JURISDICTION OF ANY CALIFORNIA COURT AND TO THE COURTS OF ITS CORPORATE
DOMICILE WITH RESPECT TO ANY ACTIONS BROUGHT AGAINST IT AS DEFENDANT IN ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THE PLEDGOR, THE TRUSTEE, THE
COLLATERAL AGENT AND THE HOLDERS IN CONNECTION WITH THIS PLEDGE AGREEMENT, AND
EACH OF THE PARTIES HERETO WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LAYING
OF VENUE, INCLUDING ANY PLEADING OF FORUM NON CONVENIENS, WITH RESPECT TO ANY
SUCH ACTION AND WAIVES ANY RIGHT TO WHICH IT MAY BE ENTITLED ON ACCOUNT OF
PLACE OF RESIDENCE OR DOMICILE.


 


(c)           THE
PLEDGOR AGREES THAT THE TRUSTEE SHALL, IN ITS CAPACITY AS TRUSTEE OR IN THE
NAME AND ON BEHALF OF ANY HOLDER, HAVE THE 


 


22

















 


RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST
THE PLEDGOR OR THE COLLATERAL IN A COURT IN ANY LOCATION REASONABLY SELECTED IN
GOOD FAITH (AND HAVING PERSONAL OR IN REM JURISDICTION OVER THE PLEDGOR OR THE
COLLATERAL, AS THE CASE MAY BE) TO ENABLE THE TRUSTEE TO REALIZE ON SUCH
COLLATERAL, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
THE TRUSTEE. THE PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY COUNTERCLAIMS,
SETOFFS OR CROSSCLAIMS IN ANY PROCEEDING BROUGHT BY THE TRUSTEE TO REALIZE ON
SUCH PROPERTY OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE
TRUSTEE, EXCEPT FOR SUCH COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS WHICH, IF NOT
ASSERTED IN ANY SUCH PROCEEDING, COULD NOT OTHERWISE BE BROUGHT OR ASSERTED.


 


(d)           THE
PLEDGOR AGREES THAT NEITHER ANY HOLDER NOR (EXCEPT AS OTHERWISE PROVIDED IN
THIS PLEDGE AGREEMENT OR THE INDENTURE) THE COLLATERAL AGENT IN ITS CAPACITY AS
COLLATERAL AGENT SHALL HAVE ANY LIABILITY TO THE PLEDGOR (WHETHER ARISING IN
TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE PLEDGOR IN CONNECTION
WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE TRANSACTIONS CONTEMPLATED
AND THE RELATIONSHIP ESTABLISHED BY THIS PLEDGE AGREEMENT, OR ANY ACT, OMISSION
OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY A FINAL
AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON THE TRUSTEE OR SUCH
HOLDER, AS THE CASE MAY BE, THAT SUCH LOSSES WERE THE RESULT OF ACTS OR
OMISSIONS ON THE PART OF THE COLLATERAL AGENT OR SUCH HOLDERS, AS THE CASE MAY
BE, CONSTITUTING BAD FAITH, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.


 


(e)           TO
THE EXTENT PERMITTED BY APPLICABLE LAW, THE PLEDGOR WAIVES THE POSTING OF ANY
BOND OTHERWISE REQUIRED OF THE TRUSTEE, THE COLLATERAL AGENT OR ANY HOLDER IN
CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO ENFORCE ANY JUDGMENT OR
OTHER COURT ORDER PERTAINING TO THIS PLEDGE AGREEMENT OR ANY RELATED AGREEMENT
OR DOCUMENT ENTERED IN FAVOR OF THE TRUSTEE, THE COLLATERAL AGENT OR ANY
HOLDER, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR
PRELIMINARY OR PERMANENT INJUNCTION, THIS PLEDGE AGREEMENT OR ANY RELATED
AGREEMENT OR DOCUMENT BETWEEN THE PLEDGOR, ON THE ONE HAND, AND THE TRUSTEE,
THE COLLATERAL AGENT AND/OR THE HOLDERS, ON THE OTHER HAND.


 


18.16       Effectiveness.  This Pledge Agreement shall become effective
upon the effectiveness of the Indenture.


 


23

















 


IN WITNESS WHEREOF, the Pledgor, the Trustee and the
Collateral Agent have each caused this Pledge Agreement to be duly executed and
delivered as of the date first above written.


 


	
   

  	
  Pledgor:

  
	
   

  	
   

  
	
   

  	
  ADAPTEC, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David A. Young

  
	
   

  	
   

  	
  Name:

  	
  Vice President and

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Trustee:

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, N.A.,

  
	
   

  	
   

  	
  as Trustee

  	 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeanie Mar

  
	
   

  	
   

  	
  Name:

  	
  Jeanie Mar

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Collateral Agent:

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, N.A.,

  
	
   

  	
   

  	
  as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeanie Mar

  
	
   

  	
   

  	
  Name:

  	
  Jeanie Mar

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
								



 

















 


SCHEDULE I


 


PLEDGED SECURITIES AND
SECURITIES ENTITLEMENTS


 


	
  Description of

  Debt

  	
   

  	
  CUSIP
  No(s).

  	
   

  	
  Final
  Maturity

  	
   

  	
  Original

  Principal

  Amount

  	
   

  	
  Cost at
  First

  Closing Date

  	
   

  
	
  Treasury Type S

  	
   

  	
  912820BE6

  	
   

  	
  8/15/02

  	
   

  	
  $

  	
  3,724,809.80

  	
   

  	
  $

  	
  99.20

  	
   

  
	
  Treasury Type S

  	
   

  	
  912820BF3

  	
   

  	
  2/15/03

  	
   

  	
  $

  	
  3,671,812.50

  	
   

  	
  $

  	
  97.92

  	
   

  
	
  Treasury Type S

  	
   

  	
  912820BG1

  	
   

  	
  8/15/03

  	
   

  	
  $

  	
  3,610,050.00

  	
   

  	
  $

  	
  96.27

  	
   

  
	
  Treasury Type S

  	
   

  	
  912820BH9

  	
   

  	
  2/15/04

  	
   

  	
  $

  	
  3,532,987.50

  	
   

  	
  $

  	
  94.21

  	
   

  
	
  Treasury Type S

  	
   

  	
  912820BK2

  	
   

  	
  8/15/04

  	
   

  	
  $

  	
  3,451,837.50

  	
   

  	
  $

  	
  92.05

  	
   

  
	
  Treasury Type S

  	
   

  	
  912820BM8

  	
   

  	
  2/15/05

  	
   

  	
  $

  	
  3,365,550.00

  	
   

  	
  $

  	
  89.75

  	
   

  



 


I-1

















 


EXHIBIT
A


 


Wells
Fargo Bank, N.A.


 


Officer’s
Certificate


 


Pursuant to Section 3(e) of the Collateral Pledge and
Security Agreement (as supplemented from time to time, the “Pledge Agreement”)
dated as of March 5, 2002, among Adaptec, Inc., a Delaware corporation (the
“Pledgor”), Wells Fargo Bank, N.A., a California state chartered banking
corporation, as trustee (the “Trustee”) for the holders of the $225,000,000
aggregate principal amount (or up to $250,000,000 aggregate principal amount if
the Initial Purchasers' overallotment option is exercised) 3% Convertible
Subordinated Notes Due 2007 of the Pledgor and Wells Fargo Bank, N.A., a
California state chartered banking corporation, as collateral agent and
securities intermediary (the “Collateral Agent”), the undersigned officer of the
Collateral Agent, on behalf of the Collateral Agent, makes the following
certifications to the Pledgor and the Initial Purchasers. Capitalized terms
used and not defined in this Officer’s Certificate have the meanings set forth
or referred to in the Pledge Agreement.


 


1.             Substantially
contemporaneously with the execution and delivery of this Officer’s
Certificate, the Collateral Agent has acquired its security entitlement to the
Initial Pledged Securities or through a “securities account” (as defined in Section
8501(a) of the California UCC) maintained by the Collateral Agent, for value
and without notice of any adverse claim thereto. Without limiting the
generality of the foregoing, the Collateral Account, the Pledged Securities and
the other Collateral are not, and the Collateral Agent’s security entitlement
to the Collateral is not, to the actual knowledge of the corporate trust
officer having responsibility for the administration of the Pledge Agreement on
behalf of the Collateral Agent, subject to any lien granted by or to or arising
through or in favor of any securities intermediary (including, without
limitation, Wells Fargo Bank, N.A. or the Federal Reserve Bank) through which
the Collateral Agent derives its security entitlement to the Collateral.


 


2.             The
Collateral Agent has not knowingly caused or permitted the Collateral Account
or its security entitlement thereto to become subject to any lien created by or
arising through the Collateral Agent.


 


A-1

















 


IN WITNESS WHEREOF, the undersigned officer has
executed this Officer’s Certificate on behalf of Wells Fargo Bank, N.A., as
Collateral Agent this 5th day of March, 2002.


 


	
   

  	
  WELLS FARGO BANK, N.A.,

  
	
   

  	
   

  	
  as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeanie Mar

  	
   

  
	
   

  	
   

  	
  Name: Jeanie Mar

  
	
   

  	
   

  	
  Title: Vice President

  
					



 


A-2

















 


EXHIBIT
B


 


[Form of Supplement to
the Pledge Agreement]


 


SUPPLEMENT NO.      
dated as of                        
, 2002, to the COLLATERAL PLEDGE AND SECURITY AGREEMENT dated as of
March 5, 2002 (as supplemented from time to time, the “Pledge Agreement”) among
Adaptec, Inc., a Delaware corporation (the “Pledgor”), Wells Fargo Bank, N.A.,
a California state chartered banking corporation, as trustee (in such capacity,
the “Trustee”) for the holders (the “Holders”) of the Notes issued by the
Pledgor under the Indenture referred to below, and Wells Fargo Bank, N.A., a
California state chartered banking corporation, as collateral agent and
securities intermediary (in such capacity, the “Collateral Agent”). Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Pledge Agreement.


 


WHEREAS, the Pledgor Bear, Stearns & Co. Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America
Securities LLC and Morgan Stanley & Co. Incorporated (the “Initial
Purchasers”) are parties to a Purchase Agreement dated February 27, 2002 (the
“Purchase Agreement”), pursuant to which the Pledgor granted the Initial Purchasers
an overallotment option to purchase up to $25,000,000 aggregate principal
amount of the Pledgor’s 3% Convertible Subordinated Notes due 2007 (the
“Notes”);


 


WHEREAS, the Pledgor and the Trustee have entered into
that certain indenture dated as of March 5, 2002 (as amended, restated,
supplemented or otherwise modified from time to time, the “Indenture”),
pursuant to which the Issuers are issuing the Notes on the date hereof;


 


WHEREAS, pursuant to the Indenture, the Pledgor is
required to purchase, or cause the purchase of, and pledge to the Collateral
Agent for the benefit of the Trustee and the Holders, on the relevant Optional
Closing Date (as defined in the Purchase Agreement), Pledged Securities in an
amount that will be sufficient upon receipt of scheduled interest and principal
payments of such securities, according to the written report
PricewaterhouseCoopers LLP or another nationally recognized firm of independent
public accountants selected by the Pledgor and delivered to the Trustee, to provide
for payment in full of the first six scheduled interest payments due on the
Notes;


 


WHEREAS, the Pledgor, the Trustee and the Collateral
Agent have entered into the Pledge Agreement, pursuant to which the Pledgor has
previously pledged certain Pledged Securities to the Collateral Agent for the
benefit of the Holders in connection with the purchase by the Initial
Purchasers of $225,000,000 aggregate principal amount of Notes;


 


WHEREAS, the Initial Purchasers have exercised their
overallotment option under the Purchase Agreement to purchase
$[                  ]
aggregate principal amount of Notes;


 


WHEREAS, it is a condition precedent to the purchase
of the Notes by the Initial Purchasers pursuant to the overallotment option
granted in the Purchase Agreement that the Pledgor purchase Additional Pledged
Securities and deposit such Additional Pledged Securities into the Collateral
Account to be held therein subject to the terms of the Pledge Agreement and
shall have granted the assignment and security interest and made the pledge and
assignment contemplated by the Pledge Agreement;


 


B-1

















 


NOW, THEREFORE, in consideration of the premises
herein contained, and in order to induce the Initial Purchasers to purchase the
Notes, the Pledgor, the Trustee and the Collateral Agent hereby agree, for the
benefit of the Initial Purchasers and for the ratable benefit of the Holders,
as follows:


 


SECTION 1.  Pledge and
Grant of Security Interest. 
Pursuant to Section 1.3 of the Pledge Agreement, as security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations, the Pledgor hereby
assigns and pledges to the Collateral Agent for the benefit of the Trustee and
the ratable benefit of the Holders and hereby grants to the Collateral Agent
for the benefit of the Trustee and for the ratable benefit of the Holders, a
lien on and security interest in all of the Pledgor’s right, title and interest
in, to and under the following property: (a) the U.S. Government Obligations
identified by CUSIP No. in Part I of Schedule I hereto (the “Additional Pledged
Securities”) and the certificates representing the Additional Pledged
Securities, the scheduled payments of principal and interest thereon which will
be sufficient to provide for payment in full of the first six scheduled
interest payments due on the Notes issued in connection herewith and (b) the
security entitlements described in Part II of Schedule I hereto, with respect
to the financial assets described, the securities intermediary named, and the
securities account referred to therein. The Pledge Agreement is hereby
incorporated herein by reference.


 


SECTION 2.  Supplement
to Schedule I.  The parties hereto
agree that Schedule I to the Pledge Agreement shall be supplemented by Schedule
I hereto.


 


SECTION 3.  Purchase of
Additional Pledged Securities. 
Pursuant to Section 2(b)(ii) of the Pledge Agreement, as of the date
hereof, the Pledgor agrees to transfer, or caused to be transferred, an amount
equal to $[                     ], which
amount shall be sufficient for the Collateral Agent to purchase the Additional
Pledged Securities, by depositing such funds into the Collateral Account. The
Collateral Agent agrees to apply such amount to purchase the Additional Pledged
Securities as contemplated under Section 2(c) of the Pledge Agreement.


 


SECTION 4.  Representations
and Warranties of the Pledgor. 
The Pledgor hereby represents and warrants to the Trustee and the
Collateral Agent that:


 


(a)                                  Each
of this Supplement and the Pledge Agreement as supplemented hereby has been
duly authorized, validly executed and delivered by the Pledgor and (assuming
the due authorization and valid execution and delivery of this Supplement by
each of the Trustee and the Collateral Agent) constitutes a valid and binding
agreement of the Pledgor, enforceable against the Pledgor in accordance with
its terms, except as (i) the enforceability hereof and thereof may be limited
by bankruptcy, insolvency, fraudulent conveyance, preference, reorganization,
moratorium or similar laws now or hereafter in effect relating to or affecting
the rights or remedies of creditors generally, (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability and the discretion of the court before which any proceeding
therefor may be brought, (iii) the exculpation provisions and rights to
indemnification under the Pledge Agreement may be limited by U.S. federal and
state securities laws and public policy considerations and (iv) the waiver of
rights and defenses contained 


 


B-2

















 


in Section 13(b), Section 18.11 and Section 18.15 of
the Pledge Agreement may be limited by applicable law and


 


(b)                                 the
representations and warranties of the Pledgor set forth in Section 7 of the
Pledge Agreement are true and correct in all material respects with the same
effect as if made on and as of the date hereof.


 


SECTION 5.  Execution in
Counterparts.  This
Supplement may be signed in two or more counterparts, each of which shall be
deemed an original, but all of which shall together constitute one and the same
agreement. This Supplement shall become effective when the Collateral Agent shall
have received counterparts of this Supplement that, when taken together, bear
the signatures of the Pledgor, the Trustee and the Collateral Agent.


 


SECTION 6.  Effect of
Supplement.  Except as
expressly supplemented hereby, the Pledge Agreement shall remain in full force
and effect.


 


SECTION 7.  Governing
Law.  This Supplement shall
governed by and construed in accordance with the laws of the State of
California.


 


B-3

















 


IN WITNESS WHEREOF, the Pledgor, the Trustee and the
Collateral Agent have each caused this Supplement to be duly executed and
delivered as of the date first above written.


 


	
   

  	
  Pledgor:

  
	
   

  	
   

  
	
   

  	
  ADAPTEC, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Trustee:

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, N.A.,

  
	
   

  	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Collateral Agent:

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, N.A.,

  
	
   

  	
   

  	
  as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					



 


B-4

















 


SCHEDULE
I TO


SUPPLEMENT
NO.      TO


PLEDGE
AGREEMENT


 


PLEDGED SECURITIES AND
SECURITIES ENTITLEMENTS


 


	
  Description of

  Debt

  	
   

  	
  CUSIP
  No(s).

  	
   

  	
  Final
  Maturity

  	
   

  	
  Original

  Principal

  Amount

  	
   

  	
  Cost at
  Optional

  Closing Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


B-I-1