Document:

Exhibit
4.06

 

REGISTRATION
RIGHTS AGREEMENT

 

among

 

ADAPTEC,
INC.,

 

BEAR,
STEARNS & CO. INC.,

 

MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

 

BANC OF
AMERICA SECURITIES LLC

 

and

 

MORGAN
STANLEY & CO. INCORPORATED

 

 

Dated as
of March 5, 2002

 

 

This REGISTRATION RIGHTS AGREEMENT, dated as of March
5, 2002, is among ADAPTEC, INC., a Delaware corporation (together with any
successor entity, herein referred to as the “Issuer”), BEAR, STEARNS
& CO. INC., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, BANC OF
AMERICA SECURITIES LLC and MORGAN STANLEY & CO. INCORPORATED (collectively,
the “Initial
Purchasers”).

 

Pursuant to the Purchase Agreement, dated
February 27, 2002, between the Issuer and the Initial Purchasers (the
“Purchase Agreement”), the Initial Purchasers have agreed to purchase from the
Issuer up to $250,000,000 aggregate principal amount of its 3% Convertible
Subordinated Notes due 2007 (the “Convertible Notes”). The Convertible Notes
will be convertible into fully paid, nonassessable shares of common stock,
$.001 par value per share, including any rights attached thereto, of the Issuer
(the “Common Stock”) on the terms, and subject to the conditions, set forth in
the Indenture (as defined herein). To induce the Initial Purchasers to purchase
the Convertible Notes, and in satisfaction of a condition to the Initial
Purchasers’ obligations under the Purchase Agreement, the Issuer has agreed to
provide the registration rights set forth in this Agreement.

 

The parties hereby agree as follows:

 

1.             Definitions.

 

As used in this Agreement, the following capitalized
terms shall have the following meanings:

 

“Advice”: As defined in Section 4(c)(ii)
hereof.

 

“Affiliate”: With respect to any specified
Person, means an “Affiliate,” as defined in Rule 144 under the Securities Act,
of such Person.

 

“Agreement”: This Registration Rights
Agreement.

 

“Broker-Dealer”: Any broker or dealer
registered under the Exchange Act.

 

“Business Day”: A day other than a Saturday
or Sunday or any federal holiday in the United States.

 

“Closing Date”: The date of this Agreement.

 

“Commission”: The United States Securities
and Exchange Commission.

 

“Common Stock”: As defined in the preamble
hereto.

 

“Control”: With respect to a Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ability to exercise voting power, by contract or otherwise.

 

“Convertible Notes”: As defined in the
preamble hereto.

 

2

 

“Damages Payment Date”: Each Interest
Payment Date with respect to the Convertible Notes.

 

“Effectiveness Period”: As defined in
Section 2(a)(iii) hereof.

 

“Effectiveness Target Date”: As defined in
Section 2(a)(ii) hereof.

 

“Exchange Act”: The Securities Exchange Act
of 1934, as amended.

 

“Holder”: A Person who owns, beneficially
or otherwise, Registrable Securities.

 

“Indemnified Holder”: As defined in Section
6(a) hereof.

 

“Indenture”: The Indenture, dated as of
March 5, 2002, between the Issuer and Wells Fargo Bank, N.A., as trustee (the “Trustee”),
pursuant to which the Convertible Notes are to be issued, as such Indenture is
amended, modified or supplemented from time to time in accordance with the
terms thereof.

 

“Initial Purchasers”: As defined in the
preamble hereto.

 

“Interest Payment Date”: As defined in
Indenture.

 

“Issuer”: As defined in the preamble
hereto.

 

“Liquidated Damages”: As defined in Section
3(a) hereof.

 

“Majority of Holders”: Holders holding over
50% of the aggregate principal amount of Registrable Securities outstanding;
provided that, for purpose of this definition, a Holder of shares of Common
Stock that constitute Registrable Securities, and which were issued upon
conversion of the Convertible Notes, shall be deemed to hold an aggregate
principal amount of Convertible Notes (in addition to the principal amount of
Convertible Notes held by such Holder) equal to the product of (x) the number
of such shares of Common Stock held by such holder and (y) the prevailing
conversion price, as determined in accordance with the Indenture.

 

“NASD”: National Association of Securities
Dealers, Inc.

 

“Person”: An individual, partnership,
corporation, unincorporated organization, trust, joint venture or a government
or agency or political subdivision thereof.

 

“Prospectus”: The prospectus included in a
Shelf Registration Statement, as amended or supplemented by any prospectus
supplement and by all other amendments thereto, including post-effective
amendments, and all material incorporated by reference into such prospectus.

 

“Questionnaire Deadline”: As defined in
Section 2(b) hereof.

 

“Record Holder”: With respect to any
Damages Payment Date, each Person who is a Holder on the record date with
respect to the Interest Payment Date on which such Damages Payment Date shall
occur. In the case of a Holder of shares of Common Stock issued upon conversion
of the Convertible Notes, “Record Holder” shall mean each Person who
is a Holder 

 

3

 

of shares of Common Stock that constitute Registrable Securities on the
February 20 or August 20 immediately preceding the Damages Payment Date.

 

“Registrable Securities”: Each Convertible
Note and each share of Common Stock issued upon conversion of Convertible Notes
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
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 Issuer or (iii) its sale to the public pursuant
to Rule 144 under the Securities Act, and (B) as a result of the event or
circumstance described in any of the 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 or such
legend, as the case may be.

 

“Registration Default”: As defined in
Section 3(a)(iv) hereof.

 

“Registration Statement”: Means any
registration statement of the Issuer that covers any of the Registrable
Securities pursuant to the provisions of this Agreement including the
Prospectus, amendments and supplements to such registration statement,
including post-effective amendments, all exhibits, and all materials
incorporated by reference or explicitly deemed to be incorporated by reference
in such registration statement.

 

“Sale Notice”: As defined in Section 4(e) hereof.

 

“Securities Act”: The Securities Act of
1933, as amended.

 

“Shelf Filing Deadline”: As defined in
Section 2(a)(i) hereof.

 

“Shelf Registration Statement”: As defined
in Section 2(a)(i) hereof.

 

“Suspension Period”: As defined in Section
4(b)(i) hereof.

 

“TIA”: The Trust Indenture Act of 1939, as
in effect on the date the Indenture is qualified under that act.

 

“Underwriting Majority”: On any date,
Holders holding at least 66 2/3% of the aggregate principal amount of the
Registrable Securities outstanding on such date; provided, that for the
purpose of this definition, a holder of shares of Common Stock that constitute
Registrable Securities and issued upon conversion of Convertible Notes shall be
deemed to hold an aggregate principal amount of Registrable Securities (in
addition to the principal amount of Convertible Notes held by such holder)
equal to (x) the number of such shares of Common Stock that are Registrable
Securities held by such holder multiplied by (y) the then applicable Conversion
Price (as defined in the Indenture).

 

“Underwritten Offering”: A transaction in
which Registrable Securities are sold to an underwriter for reoffering to the
public.

 

4

 

2.             Shelf Registration.

 

(a)           The
Issuer shall:

 

(i)            not later than 90 days after the
first date of original issuance of the Convertible Notes (the “Shelf Filing
Deadline”), cause to be filed a Registration Statement pursuant to
Rule 415 under the Securities Act (the “Shelf Registration Statement”), which
Shelf Registration Statement shall provide for resales of all Registrable
Securities held by Holders that have provided the information required pursuant
to the terms of Section 2(b) hereof;

 

(ii)           use its reasonable best efforts to
cause the Shelf Registration Statement to be declared effective by the
Commission no later than 180 days after the first date of original issuance of
the Convertible Notes (the “Effectiveness Target Date”); and

 

(iii)          subject to Section 4(b)(i) hereof, use
its reasonable best efforts to keep the Shelf Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Section 4(b) hereof to the extent necessary to ensure that (A) it is
available for resales by the Holders of Registrable Securities entitled to the
benefit of this Agreement and (B) conforms with the requirements of this
Agreement and the Securities Act and the rules and regulations of the
Commission promulgated thereunder as announced from time to time for a period
(the “Effectiveness
Period”) of:

 

(1)           two years after the latest date of
original issuance of the Convertible Notes; or

 

(2)           such shorter period, from the date of
filing of the Shelf Registration Statement until either of (i) the sale
pursuant to a Shelf Registration Statement of all the Registrable Securities or
(ii) the expiration of the holding periods applicable to the Registrable
Securities held by Holders that are not Affiliates of the Issuer under Rule
144(k) under the Securities Act.

 

(b)           No Holder of Registrable Securities
may include any of its Registrable Securities in the Shelf Registration
Statement pursuant to this Agreement unless such Holder furnishes to the Issuer
in writing, prior to or on the 20th Business Day after the date of the notice
including a request therefor (the “Questionnaire Deadline”), such information
as the Issuer may reasonably request for use in connection with the Shelf
Registration Statement or Prospectus or preliminary Prospectus included therein
and in any application to be filed with or under state securities laws. In
connection with all such requests for information from Holders of Registrable
Securities, the Issuer shall notify such Holders of the requirements set forth
in the preceding sentence. No Holder of Registrable Securities shall be
entitled to Liquidated Damages pursuant to Section 3 hereof unless such Holder
shall have provided all such reasonably requested information prior to or on
the Questionnaire Deadline. Each Holder as to which the Shelf Registration
Statement is being effected agrees to furnish promptly to the Issuer all
information 

 

5

 

required to be disclosed in order to make information
previously furnished to the Issuer by such Holder not materially misleading.

 

3.             Liquidated Damages.

 

(a)           If:

 

(i)            the Shelf Registration Statement has
not been filed with the Commission prior to or on the Shelf Filing Deadline,

 

(ii)           the Shelf Registration Statement has
not been declared effective by the Commission prior to or on the Effectiveness
Target Date,

 

(iii)          subject to the provisions of Section
4(b)(i) hereof, the Shelf Registration Statement is filed and declared
effective but, during the Effectiveness Period and after the Effectiveness
Target Date, shall thereafter cease to be effective or fail to be usable in
connection with resales of Registrable Securities without being succeeded
within five Business Days by a post-effective amendment to the Shelf
Registration Statement or a report filed with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act that cures such failure
and, in the case of a post-effective amendment, is itself declared effective
within such five Business Day period, or

 

(iv)          prior to or on the 45th or 60th day,
as the case may be, of any Suspension Period, such suspension has not been
terminated, (each such event referred to in foregoing clauses (i) through (iv),
a “Registration
Default”),

 

then the Issuer hereby agrees to pay liquidated
damages (“Liquidated
Damages”) to each Holder from and including the day following the
Registration Default to but excluding the day on which all Registration
Defaults have been cured in an amount equal to:

 

(A)          with respect to such Holder’s
Convertible Notes, for the first 90-day period during which a Registration
Default shall have occurred and be continuing but excluding the day on which
all Registration Defaults have been cured, an amount equal to 0.25% per annum
on the principal amount of such Holder’s then outstanding and not converted
Convertible Notes, increasing to an amount equal to 0.50% per annum on the
principal amount of such Holder’s then outstanding and not converted
Convertible Notes on the 91st day, provided
that in no event shall the aggregate Liquidated Damages pursuant to this clause
accrue at a rate per annum exceeding 0.50% of the sum of the principal amount
of the then outstanding Convertible Notes;

 

(B)           with respect to such Holder’s Common
Stock issued upon conversion of Convertible Notes, for the first 90-day period during
which a Registration Default shall have occurred and be continuing but
excluding the day on which all Registration Defaults have been cured, an amount
equal to 0.25% per annum on the principal amount of such Holder’s converted
Convertible Notes, increasing to an amount equal to 0.50% per annum on the
principal amount of such Holder’s converted Convertible Notes on the 91st day, provided that in no 

 

6

 

event shall the aggregate Liquidated Damages pursuant
to this clause accrue at a rate per annum exceeding 0.50% of the sum of the
principal amount of the then converted Convertible Notes;

 

(b)           All accrued Liquidated Damages shall
be paid in arrears to Record Holders by the Issuer on each Damages Payment Date
by wire transfer of immediately available funds or by federal funds check.
Following the cure of all Registration Defaults relating to any particular
Convertible Note or share of Common Stock, the accrual of Liquidated Damages
with respect to such Convertible Note or share of Common Stock will cease.

 

All obligations of the Issuer set forth in this
Section 3 and in Section 4 that are outstanding with respect to any Registrable
Security at the time such security ceases to be a Registrable Security shall cease
to exist with respect to such Registrable Security.

 

The Liquidated Damages set forth above shall be the
exclusive monetary remedy available to the Holders of Registrable Securities
for such Registration Default.

 

4.             Registration Procedures.

 

(a)           In connection with the Shelf
Registration Statement, the Issuer shall comply with all the provisions of
Section 4(b) hereof and shall, in accordance with Section 2 hereof, prepare and
file with the Commission a Shelf Registration Statement relating to the registration
on any appropriate form under the Securities Act.

 

(b)           In connection with the Shelf
Registration Statement and any Prospectus required by this Agreement to permit
the sale or resale of Registrable Securities, the Issuer shall:

 

(i)            Subject to any notice by the Issuer
in accordance with this Section 4(b) of the existence of any fact or event of
the kind described in Section 4(b)(iii)(D), use its reasonable best efforts to
keep the Shelf Registration Statement continuously effective during the Effectiveness
Period; upon the occurrence of any event that would cause the Shelf
Registration Statement or the Prospectus contained therein (A) to contain a
material misstatement or omission or (B) not be effective and usable for resale
of Registrable Securities during the Effectiveness Period, the Issuer shall
file promptly an appropriate amendment to the Shelf Registration Statement or a
report filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or (B), use its
reasonable best efforts to cause such amendment to be declared effective and
the Shelf Registration Statement and the related Prospectus to become usable
for resale of Registrable Securities during the Effectiveness Period as soon as
practicable thereafter. Notwithstanding the foregoing, the Issuer may suspend
the use of the Prospectus (and may also elect to suspend the effectiveness of
the Shelf Registration Statement) by written notice to the Holders for a period
not to exceed an aggregate of 45 days in any 90-day period (each such period, a
“Suspension
Period”) if:

 

7

 

(x)            an event occurs and is continuing as
a result of which the Shelf Registration Statement would, in the Issuer’s
reasonable judgment, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and

 

(y)           the Issuer reasonably determines that
the disclosure of such event at such time would have a material adverse effect
on the business of the Issuer (and its subsidiaries, if any, taken as a whole);

 

provided,
that (A) in the event the disclosure relates to a previously undisclosed
proposed or pending material business transaction, the disclosure of which
would impede the Issuer’s ability to consummate such transaction, the Issuer
may extend a Suspension Period from 45 days to 60 days and (B) the Suspension
Periods shall not exceed an aggregate of 90 days in any 360-day period.  No Liquidated Damages shall accrue, or be
payable as a result of the failure of the Registration Statement and the Prospectus
to be effective and usable, during any Suspension Period.  Each Holder, by its acceptance of a
Registrable Security, agrees to hold in confidence any communication by the
Issuer relating to an event described in Section 4(b)(i)(x) and (y) or Section 4(b)(iii)(D).

 

(ii)           Prepare and file with the Commission
such amendments and post-effective amendments to the Shelf Registration
Statement as may be necessary to keep the Shelf Registration Statement
effective during the Effectiveness Period; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 under the Securities Act, and to comply fully
with the applicable provisions of Rules 424 and 430A under the Securities Act
in a timely manner; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by the Shelf Registration
Statement during the applicable period in accordance with the intended method
or methods of distribution by the sellers thereof set forth in the Shelf
Registration Statement or supplement to the Prospectus.

 

(iii)          Advise the underwriter(s), if any,
and, in the case of (A), (C) and (D) below, the selling Holders promptly and,
if requested by such Persons, to confirm such advice in writing:

 

(A)          when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to the
Shelf Registration Statement or any post-effective amendment thereto, when the
same has become effective,

 

(B)           of any request by the Commission for
amendments to the Shelf Registration Statement or amendments or supplements to
the Prospectus or for additional information relating thereto,

 

(C)           of the issuance by the Commission of
any stop order suspending the effectiveness of the Shelf Registration Statement
under the Securities Act or of the suspension by any state securities
commission of the 

 

8

 

qualification of the Registrable Securities for
offering or sale in any jurisdiction, or the initiation of any proceeding for
any of the preceding purposes, or

 

(D)          of the existence of any fact or the
happening of any event, during the Effectiveness Period, that makes any
statement of a material fact made in the Shelf Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document incorporated
by reference therein untrue, or that requires the making of any additions to or
changes in the Shelf Registration Statement or the Prospectus in order to make
the statements therein not misleading.

 

If at any time the
Commission shall issue any stop order suspending the effectiveness of the Shelf
Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Registrable Securities under state securities or Blue Sky
laws, the Issuer shall use its reasonable best efforts to obtain the withdrawal
or lifting of such order at the earliest possible time.

 

(iv)          Furnish to one counsel for the selling
Holders and each of the underwriter(s), if any, before filing with the
Commission, a copy of the Shelf Registration Statement and copies of any
Prospectus included therein or any amendments or supplements to either of the
Shelf Registration Statement or Prospectus (other than documents incorporated
by reference after the initial filing of the Shelf Registration Statement),
which documents will be subject to the review of such counsel and
underwriter(s), if any, for a period of two Business Days, and the Issuer will
not file the Shelf Registration Statement or Prospectus or any amendment or
supplement to the Shelf Registration Statement or Prospectus (other than
documents incorporated by reference) to which such counsel or the
underwriter(s), if any, shall reasonably object within two Business Days after
the receipt thereof. Such counsel or underwriter, if any, shall be deemed to
have reasonably objected to such filing if the Shelf Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to be filed,
contains a material misstatement or omission.

 

(v)           Subject to the execution of a
confidentiality agreement reasonably acceptable to the Issuer, make available
at reasonable times for inspection by one or more representatives of the
selling Holders, designated in writing by a Majority of Holders whose
Registrable Securities are included in the Shelf Registration Statement, any
underwriter, if any, participating in any distribution pursuant to the Shelf
Registration Statement, and any attorney or accountant retained by the Majority
of Holders or any of the underwriter(s), all financial and other records,
pertinent corporate documents and properties of the Issuer as shall be
reasonably necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the Issuer’s officers, directors, managers and
employees to supply all information reasonably requested by any such
representative or representatives of the selling Holders, underwriter, attorney
or accountant in connection with the Shelf Registration Statement after the
filing thereof and before its effectiveness; provided, however, that any
information designated by the Issuer 

 

9

 

as confidential at the time of delivery of such
information shall be kept confidential by the recipient thereof.

 

(vi)          If requested by any selling Holders or
the underwriter(s), if any, incorporate in the Shelf Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if necessary,
such information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein with respect to: (1) the “Plan of
Distribution” of the Registrable Securities, (2) the principal
amount of Convertible Notes or number of shares of Common Stock being sold, (3)
the purchase price being paid therefor and (4) any other terms of the offering
of the Registrable Securities to be sold in such offering; and make all
required filings of such Prospectus supplement or post-effective amendment as
soon as reasonably practicable after the Issuer is notified of the matters to
be incorporated in such Prospectus supplement or post-effective amendment.

 

(vii)         Furnish to each selling Holder and each
of the underwriter(s), if any, without charge, at least one copy of the Shelf
Registration Statement, as first filed with the Commission, and of each
amendment thereto (and any documents incorporated by reference therein or
exhibits thereto (or exhibits incorporated in such exhibits by reference) as
such Person may request in writing).

 

(viii)        Deliver to each selling Holder and each
of the underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as such Persons reasonably may request; subject to any notice by the Issuer in
accordance with this Section 4(b) of the existence of any fact or event of the
kind described in Section 4(b)(i)(x) or (y), the Issuer hereby consents to the
use of the Prospectus and any amendment or supplement thereto by each of the
selling Holders and each of the underwriter(s), if any, in connection with the
offering and the sale of the Registrable Securities covered by the Prospectus
or any amendment or supplement thereto.

 

(ix)           If an underwriting agreement is
entered into, in the case of an Underwritten Offering, the Issuer shall:

 

(A)          upon request, furnish to each selling
Holder and each underwriter, if any, in such substance and scope as they may reasonably
request and as are customarily made by issuers to underwriters in primary
underwritten offerings, upon the date of closing of any sale of Registrable
Securities in an Underwritten Offering:

 

(1)           a certificate, dated the date of such
closing, signed by (y) the Chairman of the Board, the Chief Executive Officer,
the President or a Vice President and/or (z) the Chief Financial Officer of the
Issuer confirming, as of the date thereof, such matters as such parties may
reasonably request;

 

10

 

(2)           opinions, each dated the date of such
closing, of counsel to the Issuer covering such matters as are customarily
covered in legal opinions to underwriters in connection with primary
underwritten offerings of securities; and

 

(3)           customary comfort letters, dated the
date of such closing, from the Issuer’s independent accountants (and from any
other accountants whose report is contained or incorporated by reference in the
Shelf Registration Statement), in the customary form and covering matters of
the type customarily covered in comfort letters to underwriters in connection
with primary underwritten offerings of securities;

 

(B)           set forth in full in the underwriting
agreement, if any, indemnification provisions and procedures which provide
rights no less protective than those set forth in Section 6 hereof with respect
to all parties to be indemnified; and

 

(C)           deliver such other documents and
certificates as may be reasonably requested by such parties to evidence compliance
with clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the selling Holders
pursuant to this clause (ix).

 

(x)            Before any public offering of
Registrable Securities, cooperate with the selling Holders, the underwriter(s),
if any, and their respective counsel in connection with the registration and
qualification of the Registrable Securities under the securities or Blue Sky
laws of such jurisdictions as the selling Holders or underwriter(s), if any,
may reasonably request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Shelf Registration Statement; provided, however, that the
Issuer shall not be required (A) to register or qualify as a foreign
corporation or a dealer of securities where it is not now so qualified or to
take any action that would subject it to the service of process in any
jurisdiction where it is not now so subject or (B) to subject itself to
taxation in any such jurisdiction if it is not now so subject.

 

(xi)           Cooperate with the selling Holders
and the underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends (unless required by applicable securities
laws); and enable such Registrable Securities to be in such denominations and
registered in such names as the Holders or the underwriter(s), if any, may
reasonably request at least two Business Days before any sale of Registrable
Securities made by such underwriter(s).

 

(xii)          Subject to Section 4(b)(i) hereof, use
its reasonable best efforts to cause the Registrable Securities covered by the
Shelf Registration Statement to be registered with or approved by such other
U.S. governmental agencies or authorities as 

 

11

 

may be necessary to enable the seller or sellers
thereof or the underwriter(s), if any, to consummate the disposition of such
Registrable Securities, subject to the proviso in clause (x) above.

 

(xiii)         Subject to Section 4(b)(i) hereof, if
any fact or event contemplated by Section 4(b)(iii)(D) hereof shall exist or
have occurred, use its reasonable best efforts prepare a supplement or
post-effective amendment to the Shelf Registration Statement or related
Prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the 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 not misleading.

 

(xiv)        Provide CUSIP numbers for all
Registrable Securities not later than the effective date of the Shelf
Registration Statement and provide the Trustee under the Indenture with
certificates for the Convertible Notes that are in a form eligible for deposit
with The Depository Trust Company.

 

(xv)         Cooperate and assist in any filings
required to be made with the NASD and in the performance of any due diligence
investigation by any underwriter that is required to be retained in accordance
with the rules and regulations of the NASD.

 

(xvi)        Subject to Section 4(b)(i) hereof,
otherwise use its reasonable best efforts to comply with all applicable rules
and regulations of the Commission and all reporting requirements under the
rules and regulations of the Exchange Act.

 

(xvii)       Cause the Indenture to be qualified under
the TIA not later than the effective date of the Shelf Registration Statement
required by this Agreement, and, in connection therewith, cooperate with the
Trustee and the holders of Convertible Notes to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use its reasonable best
efforts to cause the Trustee thereunder to execute all documents that may be
required to effect such changes and all other forms and documents required to
be filed with the Commission to enable such Indenture to be so qualified in a
timely manner.

 

(xviii)      Cause all Registrable Securities covered
by the Shelf Registration Statement to be listed or quoted, as the case may be,
on each securities exchange or automated quotation system on which securities
issued by the Issuer of the same series are then listed or quoted.

 

(xix)         Provide promptly to each Holder upon
written request each document filed with the Commission pursuant to the
requirements of Section 13 and Section 15 of the Exchange Act after the
effective date of the Shelf Registration Statement, unless such documents are
available from the Commission’s Electronic Data Gathering And Retrieval system.

 

(c)           Each Holder agrees by acquisition of
a Registrable Security that, upon receipt of any notice from the Issuer
pursuant to Section 4(b)(i) of the existence of any 

 

12

 

fact of the kind described in Section 4(b)(i)(x) or
(y) hereof, such Holder will, and will use its reasonable best efforts to cause
any underwriter(s) in an Underwritten Offering to, forthwith discontinue
disposition of Registrable Securities pursuant to the Shelf Registration Statement
until such Holder is advised in writing (the “Advice”)
by the Issuer that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated by
reference in the Prospectus or of the supplemented or amended Prospectus
contemplated by Section 4(b)(xiii) hereof.

 

If so directed by the Issuer, each Holder will deliver
to the Issuer (at the Issuer’s expense) all copies, other than permanent file
copies then in such Holder’s possession, of the Prospectus covering such
Registrable Securities that was current at the time of receipt of such notice
of suspension.

 

(d)           Each Holder who intends to be named
as a selling Holder in the Shelf Registration Statement shall furnish to the
Issuer in writing, within 20 Business Days after the date of the notice
including a request therefor as set forth in a questionnaire in the form
attached hereto as Annex A, such information regarding such Holder and
the proposed distribution by such Holder of its Registrable Securities as the
Issuer may reasonably request for use in connection with the Shelf Registration
Statement or Prospectus or preliminary Prospectus included therein. Holders
that do not complete the questionnaire and deliver it to the Issuer shall not
be named as selling securityholders in the Prospectus or preliminary Prospectus
included in the Shelf Registration Statement and therefore shall not be
permitted to sell any Registrable Securities pursuant to the Shelf Registration
Statement. Each Holder who intends to be named as a selling Holder in the Shelf
Registration Statement shall promptly furnish to the Issuer in writing all
information required to be disclosed in order to make information previously
furnished to the Issuer by such Holder not materially misleading and such other
information as the Issuer may from time to time reasonably request in writing.

 

(e)           Upon the effectiveness of the Shelf
Registration Statement, each Holder shall notify the Issuer at least three
Business Days prior to any intended distribution of Registrable Securities
pursuant to the Shelf Registration Statement (a “Sale Notice”), which notice
shall be effective for five Business Days. Each Holder of this Security, by
accepting the same, agrees to hold any communication by the Issuer in response
to a Sale Notice in confidence.

 

5.             Registration Expenses.

 

(a)           All expenses incident to the Issuer’s
performance of or compliance with this Agreement shall be borne by the Issuer
regardless of whether a Shelf Registration Statement becomes effective,
including, without limitation:

 

(i)            all registration and filing fees and
expenses (other than filings made by any Initial Purchasers or Holders with the
NASD);

 

(ii)           all fees and expenses of compliance
with federal securities and state Blue Sky or securities laws;

 

13

 

(iii)          all expenses of printing (including
printing of Prospectuses and certificates for the Common Stock to be issued
upon conversion of the Convertible Notes), messenger and delivery services, and
telephone;

 

(iv)          all reasonable fees and disbursements
of counsel to the Issuer and, subject to Section 5(b) below, the Holders of
Registrable Securities;

 

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

 

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

 

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

 

(b)           In connection with the Shelf
Registration Statement required by this Agreement, the Issuer shall reimburse
the Initial Purchasers and the Holders of Registrable Securities being
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, which shall be
Latham & Watkins or such other counsel chosen by a Majority of Holders for
whose benefit the Shelf Registration Statement is being prepared and is
reasonably acceptable to the Issuer. The Issuer shall not be required to pay
any underwriter discount, commission or similar fees related to the sale of the
Securities.

 

6.             Indemnification and Contribution.

 

(a)           The Issuer shall indemnify and hold
harmless each Holder, such Holder’s directors, officers, employees,
representatives, agents and each person, if any, who controls such Holder
within the meaning of Section 15 of the Securities Act (each, an “Indemnified
Holder”), from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to resales of the
Registrable Securities), to which such Indemnified Holder may become subject,
under the Securities Act or otherwise, insofar as any such loss, claim, damage,
liability or action arises out of, or is based upon:

 

(i)            any untrue statement or alleged
untrue statement of a material fact contained in (A) the Shelf Registration
Statement or Prospectus or any amendment or supplement thereto; or

 

(ii)           the omission or alleged omission to
state in the Shelf Registration Statement any material fact required to be
stated therein or necessary to make the statements therein not misleading, or
the omission or alleged omission to state in the Prospectus any material fact
required to be stated therein or necessary to make the 

 

14

 

statements therein, in the light of the circumstances
under which they were made, not misleading, and shall reimburse each
Indemnified Holder promptly upon demand for any legal or other expenses
reasonably incurred by such Indemnified Holder in connection with investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Issuer shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action (A) arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
made in the Shelf Registration Statement or Prospectus or amendment or supplement
thereto in reliance upon and in conformity with written information furnished
to the Issuer by or on behalf of any Holder (or its related Indemnified Holder)
in writing specifically for use therein; provided, further, that as to any
preliminary Prospectus, this indemnity agreement shall not inure to the benefit
of any Indemnified Holder or any officer, employee, representative, agent,
director or controlling person of that Indemnified Holder on account of any
loss, claim, damage, liability or action arising from the sale of the
Registrable Securities sold pursuant to the Shelf Registration Statement to any
person by such Indemnified Holder if (i) that Indemnified Holder failed to send
or give a copy of the Prospectus, as the same may be amended or supplemented,
to that person within the time required by the Securities Act and (ii) the
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact in such preliminary Prospectus was
corrected in the Prospectus or a supplement or amendment thereto, as the case
may be, unless in each case, such failure resulted from noncompliance by the
Issuer with Section 4, or (B) results from noncompliance by the Indemnified
Holder with its obligations under Section 4(c) or Section 4(e). The foregoing
indemnity agreement is in addition to any liability that the Issuer may
otherwise have to any Indemnified Holder.

 

(b)           Each Holder, severally and not
jointly, shall indemnify and hold harmless the Issuer, its directors, officers,
employees, representatives, agents and each person, if any, who controls the
Issuer within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof, to which the Issuer or any such
officer, employee, representative, agent or controlling person may become
subject, insofar as any such loss, claim, damage or liability or action arises
out of, or is based upon:

 

(i)            any untrue statement or alleged
untrue statement of any material fact contained in the Shelf Registration
Statement or Prospectus or any amendment or supplement thereto; or

 

(ii)           the omission or the alleged omission
to state in the Shelf Registration Statement any material fact required to be
stated therein or necessary to make the statements therein not misleading, or
the omission or alleged omission to state in the Prospectus 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, but 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 furnished to the Issuer by or on behalf of
such Holder (or its related Indemnified Holder) specifically for use therein,
and shall 

 

15

 

reimburse the Issuer and any such director, officer,
employee, representative, agent or controlling person promptly upon demand for
any legal or other expenses reasonably incurred by the Issuer or any such
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred. The foregoing indemnity
agreement is in addition to any liability that any Holder may otherwise have to
the Issuer and any such director, officer, employee or controlling person.

 

(c)           Promptly after receipt by an
indemnified party under this Section 6 of notice of any claim or the
commencement of any action or proceeding (including a governmental
investigation), the indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under this Section 6, notify the
indemnifying party in writing of the claim or the commencement of that action;provided,
however, that the failure to notify the indemnifying party shall not
relieve it from any liability that the indemnifying party may have under this
Section 6 except to the extent it has been materially prejudiced by such
failure and, provided, further,
that the failure to notify the indemnifying party shall not relieve the
indemnifying party from any liability that it may have to an indemnified party
otherwise than under this Section 6. If any such claim or action shall be
brought against an indemnified party, and it notifies the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and,
to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel satisfactory to
the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to so assume the defense thereof, the
indemnifying party shall not be liable to the indemnified party under this
Section 6 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that the indemnified
party shall have the right to employ counsel to represent jointly the
indemnified party and its respective directors, employees, officers and
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the indemnified party against the
indemnifying party under this Section 6 if such indemnified party shall have
been advised in writing that the representation of such indemnified party and
those directors, employees, officers and controlling persons by the same
counsel would be inappropriate under applicable standards of professional
conduct due to actual or potential differing interests between them, and in
that event the fees and expenses of such separate counsel shall be paid by the
indemnifying party. It is understood that the indemnifying party shall not be
liable for the fees and expenses of more than one separate firm (in addition to
local counsel in each jurisdiction) for all indemnified parties in connection
with any proceeding or related proceedings. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 6(a) and 6(b),
shall use its reasonable best efforts to cooperate with the indemnifying party
in the defense of any such action or claim. No indemnifying party shall:

 

(i)            without the prior written consent of
the indemnified parties (which consent shall not be unreasonably withheld)
effect any settlement of any pending or threatened action in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such 

 

16

 

claim or action) unless such settlement, compromise or
consent includes an unconditional release of such indemnified party from all
liability arising out of such claim, action, suit or proceeding and 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, or

 

(ii)           be liable for any settlement of any
such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be
a final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against
any loss of liability by reason of such settlement or judgment in accordance
with this Section 6.

 

(d)           If the indemnification provided for
in this Section 6 is unavailable or insufficient to hold harmless an
indemnified party under Sections 6(a) or 6(b) above, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to in Section 6(a) or 6(b) (i) in such proportion as
is appropriate to reflect the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from
the registration of the Registrable Securities pursuant to the Shelf
Registration, or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities (or actions in
respect thereof) as well as any other relevant equitable considerations. The
relative fault of the parties 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 Issuer on the one hand or such Holder or such other
indemnified party, as the case may be, on the other, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such 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 Section 6(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 Section 6(d).
Notwithstanding any other provision of this Section 6(d), the Holders of the
Registrable Securities shall not be required to contribute any amount in excess
of the amount by which the gross proceeds received by such Holders from the
sale of the Registrable Securities pursuant to the Shelf Registration Statement
exceeds the amount of 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 Section 6(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 

 

17

 

any, who controls the Issuer within the meaning of the
Securities Act or the Exchange Act shall have the same rights to contribution
as the Issuer.

 

(e)           The indemnity and contribution
provisions contained in this Section 6 shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Initial Purchaser, any Holder or any
person controlling any Initial Purchaser or any Holder, or by or on behalf of
the Issuer, its officers or directors or any person controlling the Issuer, and
(iii) any sale of Registrable Securities pursuant to the Shelf Registration
Statement.

 

7.             Rule 144A.

 

In the event the Issuer is not subject to Section 13
or 15(d) of the Exchange Act, the Issuer hereby agrees with each Holder, for so
long as any Registrable Securities remain outstanding, to make available to any
Holder or beneficial owner of Registrable Securities in connection with any
sale thereof and any prospective purchaser of such Registrable Securities from
such Holder or beneficial owner, the information required by Rule 144A(d)(4)
under the Securities Act in order to permit resales of such Registrable
Securities pursuant to Rule 144A.

 

8.             Underwritten Registrations.

 

(a)           The Underwriting Majority may sell
its Registrable Securities in an Underwritten Offering pursuant to the Shelf
Registration Statement, if the Underwriting Majority shall so request in
writing within 30 days of such sale, but only with the Issuer’s consent, which
consent may be granted or withheld in the Issuer’s sole discretion.  The Holders shall not be entitled to sell
Registrable Securities in an Underwritten Offering in the absence of such a
request by the Underwriting Majority and consent by the issuer.

 

(b)           Participation of Holders. No Holder may
participate in any Underwritten Registration hereunder unless such Holder:

 

(i)            agrees to sell such Holder’s
Registrable Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements; and

 

(ii)           completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents reasonably required under the terms of such
underwriting arrangements.

 

(c)           Selection of Underwriters. In any such
Underwritten Offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by a Majority of
Holders whose Registrable Securities are included in such Underwriting
Offering; provided, that such
investment bankers and managers must be reasonably satisfactory to the Issuer.

 

18

 

9.             Miscellaneous.

 

(a)           Remedies. The Issuer acknowledges and
agrees that any failure by the Issuer to comply with its obligations under
Section 2 hereof may result in material irreparable injury to the Initial
Purchasers 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 Purchasers or any Holder may
obtain such relief as may be required
to specifically enforce the Issuer’s obligations under Section 2 hereof. The
Issuer 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 Issuer
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. In
addition, the Issuer shall not grant to any of its security holders (other than
the holders of Registrable Securities in such capacity) the right to include
any of its securities in the Shelf Registration Statement provided for in this
Agreement other than the Registrable Securities. Other than as disclosed in the
Issuer’s Offering Memorandum dated February 27, 2002, the Issuer has not
previously entered into any agreement (which has not expired or been
terminated) granting any registration rights with respect to its securities to
any Person, which rights conflict with the provisions hereof.

 

(c)           Adjustments Affecting Registrable Securities. The
Issuer shall not, directly or indirectly, take any action with respect to the
Registrable Securities as a class that would adversely affect the ability of
the Holders of Registrable Securities to include such Registrable Securities in
a registration undertaken pursuant to this Agreement.

 

(d)           Amendments and Waivers. This Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given, unless the Issuer has
obtained the written consent of a Majority of Holders; provided, however, that no
amendment, modification, supplement, waiver or consent to or departure from the
provisions of Section 6 that materially and adversely affects a Holder hereof
shall be effective as against any such Holder of Registrable Securities unless
consented to in writing by such Holder.

 

(e)           Notices. All notices and other
communications provided for or permitted hereunder shall be made in writing by
hand-delivery, first-class mail (registered or certified, return receipt requested),
telex, telecopier, or air courier guaranteeing overnight delivery:

 

(i)            if to a Holder, at the address set
forth on the records of the registrar under the Indenture or the transfer agent
of the Common Stock, as the case may be; and

 

19

 

(ii)           if to the Issuer:

 

Adaptec, Inc.

691 South Milpitas Blvd.

Milpitas, CA  95035

Fax No.:  (408) 945-8600

Attention:  Chief Financial Officer

 

With a copy to:

 

Fenwick & West LLP

Two Palo Alto Square

Palo Alto, CA  94306

Fax No.:  (650) 494-1417

Attention:  Daniel J. Winnike, Esq.

 

(iii)          if to the Initial Purchasers:

 

c/o Bear, Stearns &
Co. Inc.

383 Madison Avenue 

New York, New York  10179

Fax No.:  (212) 272-3092 

Attention:  Convertible Capital Markets

 

With a copy to:

 

Latham & Watkins

505 Montgomery Street

Suite 1900

San Francisco, CA  94111

Fax No.:  (415) 395-8095

Attention:  Tracy K. Edmonson, Esq.

 

All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if personally delivered;
five Business Days after being deposited in the mail, postage prepaid, if
mailed; when receipt acknowledged, if telecopied; and on the next Business Day,
if timely delivered to an air courier guaranteeing overnight delivery.

 

Copies of all such notices, demands or other
communications shall be concurrently delivered by the Person giving the same to
the Trustee at the address specified in the Indenture.

 

A document or notice shall be deemed to have been
furnished to the Holders of the Registrable Securities if it is provided to the
registered holders of the Registrable Securities at the address set forth in
clause (i) above.

 

20

 

(f)            Successors and Assigns. This Agreement
shall inure to the benefit of and be binding upon the successors, assigns and
transferees of each of the parties, including without limitation and without
the need for an express assignment, subsequent Holders of Registrable
Securities; provided,
however, that (i) nothing contained herein shall be deemed to permit
any assignment, transfer or other disposition of Registrable Securities in
violation of the terms of the Purchase Agreement or the Indenture and (ii) this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign acquired
Registrable Securities from such Holder. If any transferee of any Holder shall
acquire Registrable Securities, in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Securities
such person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement and such Person shall
be entitled to receive the benefits hereof. The Initial Purchasers (in their
capacity as Initial Purchasers) shall have no liability or obligation to the
Issuer with respect to any failure by a Holder to comply with, or breach by any
Holder of, any of the obligations of such Holder under this Agreement.

 

(g)           Purchases and Sales of Convertible Notes. The
Issuer shall not, and shall use its reasonable best efforts to cause its
affiliates (as defined in Rule 405 under the Securities Act) within its Control
not to, resell or otherwise transfer any Convertible Notes acquired by the
Company or such affiliates, except pursuant to an effective registration
statement under the Securities Act or an exemption therefrom.

 

(h)           Third Party Beneficiary. The Holders shall
be third party beneficiaries to the agreements made hereunder between the
Issuer and the Initial Purchasers, and such Initial Purchasers shall have the
right to enforce such agreements directly to the extent they deem such
enforcement necessary or advisable to protect their rights or the rights of
Holders hereunder.

 

(i)            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.

 

(j)            Securities Held by the Issuer or Their Affiliates. Whenever
the consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Issuer or
its affiliates (as such term is defined in Rule 405 under the Securities Act)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.

 

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

 

(l)            Governing Law. This agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.

 

21

 

(m)          Consent to Jurisdiction. Each party
irrevocably agrees that any legal suit, action or proceeding arising out of or
based upon this Agreement or the transactions contemplated hereby (“Related
Proceedings”) may be instituted in the federal courts of the United
States of America located in the City of New York or the courts of the State of
New York in each case located in the Borough of Manhattan in the City of New
York (collectively, the “Specified Courts”), and irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a “Related
Judgment”), as to which such jurisdiction is non-exclusive) of such
courts in any such suit, action or proceeding. The parties further agree that
service of any process, summons, notice or document by mail to such party’s
address set forth above shall be effective service of process for any lawsuit,
action or other proceeding brought in any such court. The parties hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any lawsuit, action or other proceeding in the Specified Courts, and hereby
further irrevocably and unconditionally waive and agree not to plead or claim
in any such court that any such lawsuit, action or other proceeding brought in
any such court has been brought in an inconvenient forum.

 

(n)           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.

 

(o)           Entire Agreement. This Agreement, together
with the Purchase Agreement and the Indenture, is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Issuer with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

 

[Signature page to
follow]

 

22

 

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  ADAPTEC, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David A. Young

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David A. Young

  
	
   

  	
   

  	
  Title:

  	
  Vice President and

  Chief Financial Officer

  
					

 

The foregoing Registration Rights Agreement is hereby
confirmed and accepted as of the date first above written.

 

	
   

  	
  BEAR, STEARNS & CO. INC.,

  
	
   

  	
   

  	
  on behalf of the Initial Purchasers

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen Parish

  	
   

  
	
   

  	
  Name:

  	
  STEPHEN PARISH

  
	
   

  	
  Title:

  	
  SENIOR MANAGING DIRECTOR

  
						

 

 

 

ANNEX A

 

Adaptec,
Inc.

Notice of Registration Statement

and Selling Securityholder Election and Questionnaire

 

Notice

 

Adaptec, Inc. (the “Company”) has filed, or
intends shortly to file, with the Securities and Exchange Commission (the “Commission”)
a registration statement on Form S-3 or such other Form as may be available
(the “Shelf
Registration Statement”) for the registration and resale under Rule
415 of the Securities Act of 1933, as amended (the “Securities Act”), of the
Company’s 3% Convertible Subordinated Notes due 2007 (CUSIP No. 006-51F-AD0)
(the “Notes”),
and common stock, $.001 par value per share, issuable upon conversion and
thereof (the “Shares” and together with the Notes, the “Transfer
Restricted Securities”) in accordance with the terms of the
Registration Rights Agreement, dated as of March 5, 2002 (the “Registration
Rights Agreement”) among the Company and Bear, Stearns & Co.
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America
Securities LLC and Morgan Stanley & Co. Incorporated.  A copy of the Registration Rights Agreement
is available from the Company. All capitalized terms not otherwise defined
herein have the meaning ascribed thereto in the Registration Rights Agreement.

 

To sell or otherwise dispose of any Transfer
Restricted Securities pursuant to the Shelf Registration Statement, a
beneficial owner of Transfer Restricted Securities generally will be required
to be named as a selling securityholder in the related Prospectus, deliver a
Prospectus to purchasers of Transfer Restricted Securities, be subject to
certain civil liability provisions of the Securities Act and be bound by those
provisions of the Registration Rights Agreement applicable to such beneficial
owner (including certain indemnification rights and obligations, as described
below). To be included in the Shelf Registration Statement, this Election and
Questionnaire must be completed, executed and delivered to the Company at the
address set forth herein for receipt PRIOR TO
OR ON  the 20th
business day from the receipt hereof (the “Election and Questionnaire Deadline”).  Beneficial Owners that do not complete and return this
Election and Questionnaire to the Company as provided below prior to the
Election and Questionnaire Deadline will not be named as Selling
Securityholders in the Prospectus and therefore will not be permitted to sell
any Transfer Restricted Securities pursuant to the Shelf Registration
Statement.

 

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 Transfer Restricted
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.

 

Annex A-1

 

ELECTION

 

The undersigned holder (the “Selling Securityholder”) of
Transfer Restricted Securities hereby elects to include in the Shelf
Registration Statement the Transfer Restricted Securities beneficially owned by
it and listed below in Item 3 (unless otherwise specified under Item 3). The
undersigned, by signing and returning this Election and Questionnaire,
understands that it will be bound with respect to such Transfer Restricted
Securities by the terms and conditions of this Election and Questionnaire and
the Registration Rights Agreement.

 

Pursuant to the Registration Rights Agreement, the
Selling Securityholder has agreed to indemnify and hold harmless the Company,
the Company’s directors, the Company’s officers, employees, representatives and
agents who sign the Shelf Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against certain losses arising
in connection with statements concerning the Selling Securityholder made in the
Shelf Registration Statement or the related Prospectus in reliance upon the
information provided in this Election and Questionnaire.

 

The Selling Securityholder 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
Transfer Restricted 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 Transfer Restricted Securities listed in (3) are held:

 

	
   

  	
   

  	
   

  

 

2.                             Address
for notices to Selling Securityholders:

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

	
   

  	
  Telephone:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Fax:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Contact Person:

  	
   

  	
   

  

 

Annex A-2

 

3.                             Beneficial
ownership of Transfer Restricted Securities:

 

(a)                                  Type
of Transfer Restricted Securities beneficially owned, and principal amount of
Notes or Number of shares of Common Stock, as the case may be, beneficially
owned:

 

	
   

  	
   

  	
   

  

 

(b)           CUSIP No(s). of such Transfer
Restricted 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 securities of the
Company other than the Transfer Restricted Securities listed above in Item (3)
(“Other
Securities”).

 

(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 equity holders (5% or
more) has held any position or office or has had any other material
relationship with the Company (or their predecessors or affiliates) during the
past three years.

 

State any exceptions here:

 

	
   

  	
   

  	
   

  

 

6.                             Plan
of Distribution:

 

Except as set forth below, the undersigned (including
its donees or pledgees) intends to distribute the Transfer Restricted
Securities listed above in Item (3) pursuant to the Shelf Registration
Statement only as follows (if at all). Such Transfer Restricted Securities may
be sold from time to time directly by the undersigned or, alternatively,
through underwriters, broker-dealers or agents. If the Transfer Restricted
Securities are sold through underwriters or broker-dealers, the Selling
Securityholder will be responsible for underwriting discounts or commissions or
agent’s commissions. Such Transfer Restricted Securities may be 

 

Annex A-3

 

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 prices. Such sales may be effected in
transactions (which may involve crosses or block transactions):

 

(i)                                     on
any national securities exchange or quotation service on which the Transfer
Restricted 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 Transfer Restricted
Securities or otherwise, the undersigned may enter into hedging transactions
with broker-dealers, which may in turn engage in short sales of the Transfer
Restricted Securities and deliver Transfer Restricted Securities to close out
such short positions, or loan or pledge Transfer Restricted Securities to
broker-dealers that in turn may sell such securities.

 

State any exceptions here:

 

	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
   

  

 

Note:
In no event will such method(s) of distribution take the form of an
underwritten offering of the Transfer Restricted Securities without the prior
agreement of the Company.

 

By signing below, the Selling Securityholder
acknowledges that it understands its obligation to comply, and agrees it will
comply, with the provisions of the prospectus delivery and other provisions of
the Securities Act and Exchange Act and the respective rules and regulations
promulgated thereunder, particularly Regulation M thereunder (or any successor
rules or regulations), in connection with any offering of Transfer Restricted
Securities pursuant to the Shelf Registration Statement.

 

If the Selling Securityholder transfers all or any
portion of the Transfer Restricted Securities listed in Item 3 above after the
date on which such information is provided to the Company, the Selling
Securityholder agrees to notify the transferee(s) at the time of the transfer
of its rights and obligations under this Election and Questionnaire and the
Registration Rights Agreement.

 

By signing below, the Selling Securityholder consents
to the disclosure of the information contained herein in its answers to Items
(1) through (6) above and the inclusion of 

 

Annex A-4

 

such information in the Shelf Registration Statement and the related
Prospectus. The Selling Securityholder 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.

 

In accordance with the Selling Securityholder’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 Selling Securityholder 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.

 

Once this Election and Questionnaire is executed by
the Selling Securityholders and received by the Company, the terms of this
Election and Questionnaire and the representations and warranties contained
herein shall be binding on, shall inure to the benefit of and shall be
enforceable by the respective successors, heirs, personal representatives and
assigns of the Company and the Selling Securityholder with respect to the
Transfer Restricted Securities beneficially owned by such Selling
Securityholder and listed in Item 3 above. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.

 

Annex A-5

 

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

 

	
  Dated:

  	
   

  	
   

  
	
  Beneficial Owner

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

Please return the completed and executed Election and Questionnaire for
receipt prior to or on the 20th business day
from receipt hereof to Adaptec, Inc. at:

 

Adaptec, Inc.

691 South Milpitas Blvd.

Milpitas, CA 
95035

Attention: 
Chief Financial Officer

 

Annex A-6

 

EXHIBIT
1 TO ANNEX A

 

NOTICE
TO TRANSFER PURSUANT

TO REGISTRATION STATEMENT

 

Adaptec, Inc.

691 South Milpitas Blvd.

Milpitas, CA  95035

 

Wells Fargo Bank, N.A.

707 Wilshire Blvd., 17th Floor

Los Angeles, CA  90017

Attention:  Corporate Trust
Department

 

Re:          Adaptec,
Inc. 3% Convertible Subordinated Notes due 2007 (the “Notes”)

 

Dear Sirs:

 

Please be advised that                     has transferred $                     aggregate principal amount of the above-referenced
Notes or                                                               
shares of the Company’s Common Stock issued on conversion or repurchase
of Notes, pursuant to the Registration Statement on Form S-3 (File No.
333-                     ) filed by the
Company.

 

We hereby certify that the prospectus delivery
requirements, if any, of the Securities Act of 1933, as amended, have been
satisfied with respect to the transfer described above and that the above named
beneficial owner of the Notes or Common Stock is named as a selling
securityholder in the Prospectus dated                                           , or in amendments or
supplements thereto, and that the aggregate principal amount of the Notes or number
of shares of Common Stock transferred are [all or a portion of] the Notes or
Common Stock listed in such Prospectus, as amended or supplemented, opposite
such owner’s name.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [name]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  (Authorized signature)

  
	
  Dated:

  	
   

  	
   

  	
   

  
					

 

Annex A-7Exhibit
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.

 

2

 

“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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}]]