EXHIBIT A
FORM OF VOTING UNDERTAKING
This VOTING UNDERTAKING (this "Agreement") dated as of July 30, 2006,
is entered into among SanDisk Corporation, a Delaware corporation (the
"Parent"), and the undersigned shareholder (the "Shareholder") of msystems Ltd.,
an Israeli company (the "Company"). Except as otherwise provided herein,
capitalized terms that are used but not otherwise defined herein shall have the
meanings assigned to them in the Merger Agreement (as defined below).
RECITALS
A. Contemporaneously with the execution of this Agreement, the
Company, the Parent and Project Desert Ltd. are entering into an Agreement and
Plan of Merger of even date herewith (the "Merger Agreement"), providing for,
among other things, the merger of Merger Sub with and into the Company, pursuant
to which Merger Sub will cease to exist and the Company will become a
wholly-owned subsidiary of the Parent (the "Merger"); and
B. As a condition to their willingness to enter into the Merger
Agreement, the Parent and Merger Sub have required that the Shareholder enter
into this Agreement.
AGREEMENT
NOW, THEREFORE, in order to induce the Parent and Merger Sub to enter
into the Merger Agreement, the parties hereto, intending to be legally bound,
agree as follows:
1. Representations of Shareholder. The Shareholder represents and
warrants to the Parent that:
(a) As of the date hereof, the Shareholder lawfully owns beneficially
(as such term is defined in Rule 13d-3 of the Exchange Act)) or of record each
of the Ordinary Shares, par value NIS 0.001 per share, of the Company (the
"Company Shares"), set forth on Schedule 1(a) (the "Shares"), free and clear of
all Liens (other than as set forth on Schedule 1(a) and proxies and other
restrictions in favor of the Parent and Merger Sub pursuant to this Agreement
and except for such transfer restrictions of general applicability as may be
provided under securities laws, including the Securities Act and the "blue sky"
laws of the various states of the United States) and, except for this Agreement
and as set forth on Schedule 1(a), there are no options, warrants or other
rights, agreements, arrangements or commitments of any character to which the
Shareholder is a party relating to the pledge, disposition or Voting (as defined
below) of any shares of capital stock of the Company and there are no Voting
trusts or Voting agreements with respect to such Shares;
(b) as of the date hereof, other than as set forth on Schedule 1(a),
the Shareholder does not beneficially own (as such term is used in Rule 13d-3 of
the Exchange Act, but ignoring the 60-day limitation set forth therein) any
Company Shares other than the Shares and does not have any options, warrants or
other rights to acquire any additional shares of capital stock of the Company or
any security exercisable for or convertible or exchangeable into shares of
capital stock of the Company;
(c) the Shareholder has full power and authority and has taken all
actions necessary to enter into, execute and deliver this Agreement and to
perform fully the Shareholder's obligations hereunder;
(d) this Agreement has been duly executed and delivered by the
Shareholder and constitutes the legal, valid and binding obligation of the
Shareholder enforceable against the Shareholder in accordance with its terms,
subject to the Bankruptcy and Equity Exception;
(e) other than filings under the Exchange Act and other than such as,
if not made, obtained or given, would not reasonably be expected to prevent or
materially delay the performance by Shareholder of any of its obligations under
this Agreement, no notices, reports or other filings are required to be made by
the Shareholder with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by the Shareholder from, any Governmental
Entity or any other Person or entity, in connection with the execution and
delivery of this Agreement by the Shareholder;
(f) the execution, delivery and performance of this Agreement by the
Shareholder does not, and the consummation by the Shareholder of the
transactions contemplated hereby will not, result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation, modification or
acceleration) (whether after the giving of or the passage of time of both) under
any contract, agreement, arrangement or commitment to which the Shareholder is a
party or which is binding on it, him or her or its, his or her assets and will
not result in the creation of any Lien on any of the assets or properties of the
Shareholder (other than the Shares), except for such violations, breaches,
defaults, terminations, cancellations, modifications, accelerations or Liens as
would not reasonably be expected to prevent or materially delay the performance
by Shareholder of any of its obligations under this Agreement; and
(g) upon delivery by the Shareholder to Parent of the Profit pursuant
to Section 6, Parent will receive good and valid title to the assets
constituting such Profit, free and clear of all security interests, liens,
claims, pledges, options, rights or first refusal, agreements, charges and other
encumbrances of any nature whatsoever (except any security interest created by
Parent).
2. Voting. From the date hereof until any termination of this
Agreement in accordance with its terms, Shareholder hereby agrees that at any
meeting of the shareholders of the Company, however called, and in any written
action by consent of shareholders of the Company, Shareholder shall cause to be
counted as present thereat for purposes of establishing a quorum and shall Vote,
or cause to be Voted, any and all of the Shares (or, with respect to New Shares
(as defined in Section 3), owned hereafter) as follows:
(a) FOR the adoption and approval of the Merger Agreement and the
Transactions contemplated thereby, including the Merger;
(b) AGAINST any action or agreement that would compete with, or
materially impede, or interfere with or that would reasonably be expected to
discourage the Transactions; or inhibit the timely consummation of the
Transactions, and
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(c) except for the Merger, AGAINST any Acquisition Proposal, or
merger, consolidation, business combination, reorganization, recapitalization,
liquidation or sale or transfer of any material assets of the Company or its
Subsidiaries not permitted pursuant to Section 4.1 of the Merger Agreement.
For purposes of this Agreement, "Vote" includes voting in person or by proxy in
favor of or against any action, otherwise consenting or withholding consent in
respect of any action. "Voting" shall have a correlative meaning.
3. Proxy. In furtherance of the Shareholder's agreement in Section 2
above, the Shareholder hereby appoints Xxx Xxxxxx and Xxxxxxx Xxx Xxxxx and each
of them as his, her or its proxies, with power of substitution and
resubstitution, to Vote all of the Shares and all Company Shares which the
Shareholder purchases or otherwise of which the Shareholder acquires beneficial
ownership (as such term is used in Rule 13d-3 of the Exchange Act, but ignoring
the 60-day limitation set forth therein, and excluding any Company Shares that
may be deemed to be beneficially owned by the Shareholder as a result of the
grant to the Shareholder of proxies in connection with the Company General
Meeting) after the execution of this Agreement ("New Shares") in the manner
described by Section 2 above.
This proxy (this "Proxy") applies to any Vote (i) at any meeting of
the shareholders of the Company, and any adjournment or postponement thereof, at
which the matters described above are considered, including the Company General
Meeting, and (ii) in connection with any written consent of the shareholders of
the Company. THIS PROXY IS COUPLED WITH AN INTEREST, REVOKES ALL PRIOR PROXIES
GRANTED BY THE SHAREHOLDER AND IS IRREVOCABLE (to the fullest extent permitted
by Israeli law and the Company Charter Documents) until such time as this
Agreement terminates in accordance with its terms, at which time this Proxy
shall expire.
4. No Voting Trusts. From the date hereof until any termination of
this Agreement in accordance with its terms, the Shareholder will not, nor will
the Shareholder permit any entity under the Shareholder's control to, deposit
any of the Shares or New Shares in a Voting trust or subject any of the Shares
or New Shares to any arrangement with respect to the Voting of such Shares or
New Shares other than agreements entered into with the Parent.
5. No Proxy Solicitations. From the date hereof until any
termination of this Agreement in accordance with its terms, the Shareholder will
not, nor will the Shareholder permit any entity under the Shareholder's control,
to:
(a) solicit, initiate, or take an action intended to encourage or
induce the making, submission or announcement of any Acquisition Proposal;
(b) take an action intended to, directly or indirectly, encourage, or
initiate or cooperate in, a shareholders' Vote or action by consent of the
Company's shareholders in opposition to or in competition with the consummation
of the Transactions, including the Merger; or
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(c) become a member of a "group" (as such term is used in Section
13(d) of the Exchange Act) with respect to any voting securities of the Company
for the purpose of opposing or competing with the consummation of the
Transactions, including the Merger.
6. Payment with Respect to Certain Profits. If (a) (x) after the
date hereof the Merger Agreement shall have been terminated (i) pursuant to
Section 7.1(b) of the Merger Agreement under the circumstances described in the
second proviso to Section 7.1(b) of the Merger Agreement, (ii) pursuant to
Section 7.1(d) of the Merger Agreement under the circumstances described in the
proviso to Section 7.1(d) of the Merger Agreement, (iii) pursuant to Section
7.1(f) of the Merger Agreement under the circumstances described in the second
proviso to Section 7.1(f) of the Merger Agreement, (iv) pursuant to Section
7.1(h) of the Merger Agreement or (v) pursuant to Section 7.1(i) of the Merger
Agreement (clauses (i) through (iii) each a "Tail Termination Event," and
clauses (iv) and (v) each a "Non-Tail Termination Event"), and (y) as a result
of any such termination descried in clauses (i) through (v), a Termination Fee
shall have become payable by the Company to the Parent pursuant to Section
7.1(b), Section 7.1(d), Section 7.1(f), Section 7.1(h) or Section 7.1(i) of the
Merger Agreement (in the case of Section 7.1(b), 7.1(d) or 7.1(f), a "Tail
Triggering Event"), and (b) in the case of a Non-Tail Termination Event,
concurrently with or at any time within 12 months after the date of such
termination (such 12-month period being referred to herein as the "Covered
Period"), the Company consummates an Acquisition Transaction with an Person or
group (other than an Affiliate of Parent) (a "Non-Tail Triggering Event"), then
the Shareholder shall, within five Business Days after the consummation of such
Tail Triggering Event or Non-Tail Triggering Event, as applicable, if such Tail
Termination Event or Tail Triggering Event results in the payment of
consideration to the Shareholder pursuant to an Acquisition Transaction, pay to
the Parent an amount equal to 50% of the aggregate Profit (as hereinafter
defined) received by the Shareholder, if any, in such Acquisition Transaction.
As used in this Section, the "Profit" shall be calculated on a per Share basis
and shall mean an amount equal to the excess, if any, of (A) the Current Market
Value attributable to each Share upon consummation of the applicable Acquisition
Transaction over (B) the product of (1) the closing sale price for Parent Common
Stock on the Nasdaq National Market on the date of the relevant termination of
the Merger Agreement multiplied by (2) the Exchange Ratio (as adjusted to
reflect any stock dividend, split-up, merger, recapitalization, combination,
exchange of shares or similar transaction after the date hereof). Such 50% of
the Profit received by the Shareholder shall be paid to the Parent in the same
form and in the same proportion as was received by the Shareholder, and the
value of any non-cash consideration shall be its Current Market Value. The
"Current Market Value" shall equal (x) with respect to securities traded on any
national securities exchange or by any registered securities association, a
value based on the closing sale price or asked price for such securities on
their principal trading market on the date of the Tail Triggering Event or
Non-Tail Triggering Event, as applicable, and (y) with respect to other
consideration, the value ascribed to such consideration by the proponent of such
Acquisition Transaction, or if no such value is ascribed, a value determined in
good faith by the Board of Directors of Parent.
7. Transfer and Encumbrance. On or after the date hereof and during
the term of this Agreement, the Shareholder agrees not to (a) directly or
indirectly, sell, offer, contract or grant any option to sell (including without
limitation any short sale), pledge, transfer, establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Exchange Act or
otherwise dispose of any of the Shares or the New Shares, (b) publicly announce
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an intention to do any of the foregoing, or (c) enter into any swap or other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequences of ownership of any Shares or New Shares,
whether any such swap or transaction is to be settled by delivery of Shares, New
Shares or other securities, in cash or otherwise encumber any of the Shares or
New Shares. Notwithstanding the foregoing, the Shareholder may (i) sell Shares
or New Shares pursuant to the terms of a trading plan adopted pursuant to Rule
10b5-1 under the Exchange Act in effect prior to the date hereof, and (ii) sell
New Shares acquired pursuant to the exercise of Company Stock Options after the
date hereof consistent with the Shareholder's past practice relating to the sale
of Company Shares after exercise of Company Stock Options.
8. Shareholder Capacity. To the extent that the Shareholder is an
officer or director of the Company, nothing in this Agreement shall be construed
as preventing or otherwise affecting any actions taken by the Shareholder in his
or her capacity as an officer or director of the Company or any of its
Subsidiaries or from fulfilling the obligations of such office (including the
performance of obligations required by the fiduciary duties of the Shareholder
acting solely in his or her capacity as an officer or director) , including,
without limitation, participating in any such capacity in any discussions or
negotiations in accordance with Section 5.6 of the Merger Agreement.
9. Specific Performance. The parties acknowledge that there may be
no adequate remedy at law for a breach of this Agreement and that money damages
may not be an appropriate remedy for breach of this Agreement. Therefore, the
parties agree that each party has the right to seek injunctive relief and
specific performance of this Agreement in the event of any breach hereof in
addition to any rights it may have for damages. The remedies set forth in this
Section 9 are cumulative and shall in no way limit any other remedy any party
hereto has at law, in equity or pursuant hereto.
10. Entire Agreement; Amendment; Waiver. This Agreement (including
the schedule hereto) contains the entire agreement between the parties hereto
with respect to the subject matter hereof and thereof and supersedes all prior
agreements and understandings, oral or written, with respect to such matters.
Any provision of this Agreement may be amended or waived if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by
the parties, or in the case of a waiver, by the party against whom the waiver is
to be effective. No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
11. Notices. All notices, claims, demands and other communications
hereunder shall be in writing and shall be deemed given when delivered
personally or by internationally recognized overnight courier (providing proof
of delivery), or sent via telecopy (receipt confirmed) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
To the Parent:
Sandisk Corporation
000 XxXxxxxx Xxxxxxxxx
0
Xxxxxxxx, XX 00000
Telecopy No.: + 1 408 801 8504
Attention: General Counsel
with a copy (which shall constitute notice) to :
O'Melveny & Xxxxx LLP
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
XXX
Telecopy No.: x0 000.000.0000
Attention: Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxxx
and a copy (which shall not constitute notice) to :
Xxxxxxxx, Xxxxxxx & Xx.
0 Xxxxx Xxxxxx
Xxx-Xxxx 00000
Xxxxxx
Telecopy No.: x000.0.000.0000
Attention: Xxxxxx X. Amir
If to the Shareholder, to the address or facsimile number set forth for
the Shareholder on the signature page hereof:
with a copy to :
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 XXX
Telecopy No.: x0 000 000 0000
Attention: Xxxxxx Xxxxxxxxxx
Xxxxxxx Xxxxxx
and:
Meitar Liquornik Geva & Leshem Xxxxxxxxx
00 Xxxx Xxxxxx Xxxxxx Xx.
Xxxxx Xxx 00000, Israel
Telecopy No.: x000 0 000 0000
Attention: Xxx Xxxx
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12. Miscellaneous.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
ANY OTHER CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF NEW YORK OR OTHERWISE) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF
ANY JURISDICTION, OTHER THAN THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT
PROVISIONS THAT ARE REQUIRED UNDER ISRAELI LAW TO BE GOVERNED BY ISRAELI LAW
WILL BE SO GOVERNED.
(b) Venue; Waiver of Jury Trial. In addition, each of the parties (a)
consents to submit itself to the personal jurisdiction of any Federal court (and
if such Federal court finds that it can not exercise jurisdiction any Delaware
state court) sitting in Newcastle County in the State of Delaware and higher
courts sitting in other locations with jurisdiction with respect to any appeals
from such courts, if any dispute arises out of this Agreement, (b) agrees that
it will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, including (i) any claim that it is
not personally subject to the jurisdiction of the above-named courts for any
reason other than the failure to lawfully serve process, (ii) that it or its
property is exempt or immune from jurisdiction of any such court or from any
legal process commenced in such courts (whether through service of notice,
attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or otherwise), (iii) to the fullest extent permitted by
applicable law, that (1) the suit, action or proceeding in any such court is
brought in an inconvenient forum, (2) the venue of such suit, action or
proceeding is improper and (iii) this Agreement, or the subject matter hereof,
may not be enforced in or by such courts and (c) agrees that it will not bring
any action relating to this Agreement in any court other than a Federal court
(or if such Federal court finds that it can not exercise jurisdiction) such
Delaware state court sitting in Newcastle County in the State of Delaware. EACH
OF THE PARENT AND THE SHAREHOLDER IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY
RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE NEGOTIATION OR ENFORCEMENT HEREOF. Each party to this
Agreement hereby agrees that in connection with any such action process may be
served in the same manner as notices may be delivered under Section 11 and
irrevocably waives any defenses or objections it may have to service in such
manner.
(c) Severability. If any term or other provision of this Agreement or
the application hereof is invalid, illegal or incapable of being enforced by any
rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect. If the final
judgment of a court of competent jurisdiction or other authority declares that
any term or provision hereof is invalid, void or unenforceable, the parties
agree that the court making such determination shall have the power to and
shall, subject to the discretion of such court, reduce the scope, duration, area
or applicability of the term or provision, to delete specific words or phrases,
or to replace any invalid, void or unenforceable term or provision with a term
or provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision.
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(d) Binding Effect and Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but, except as
otherwise specifically provided herein, neither this Agreement nor any of the
rights, interests or obligations of the parties hereto may be assigned or
delegated by either of the parties without prior written consent of the other.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered (whether delivered by telecopy or
otherwise) one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other parties, it being understood and agreed that all parties need not sign the
same counterpart.
(f) Termination. This Agreement shall terminate upon the earliest to
occur of (i) the Closing and (ii) the termination of the Merger Agreement in
accordance with its terms; provided that, if a Non-Tail Termination Event or a
Tail Termination Event shall have occurred, then Sections 6, 9, 10, 11 and 12 of
this Agreement shall survive such termination until the later of (x) in the
event of a Non-Tail Termination Event, the expiration of the Covered Period and
(y) the completion by Shareholder of its obligations pursuant to Section 6,
whereupon such Sections shall also terminate; provided, further, that
termination of this Agreement shall not relieve any party from breach of its
obligations hereunder prior to such termination.
(g) Further Assurances. Each party hereto shall execute and deliver
such additional instruments and other documents and shall take such further
actions as may be necessary or desirable to effectuate, carry out and comply
with all of the terms of this Agreement and the transactions contemplated
hereby.
(h) Headings. The heading references herein hereof are for
convenience purposes only, and shall not be deemed to limit or affect any of the
provisions hereof.
(i) THIRD PARTY BENEFICIARIES. NOTHING IN THIS AGREEMENT, EXPRESS OR
IMPLIED, IS INTENDED TO CONFER UPON ANY PERSON OTHER THAN THE PARENT, THE
SHAREHOLDER AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, ANY RIGHTS OR REMEDIES
UNDER OR BY REASON OF THIS AGREEMENT.
(j) Rules of Construction. The parties hereto agree that they have
been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document. Section 8.6 of the Merger Agreement shall be applicable to this
Agreement as if set forth herein.
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EXHIBIT A
The parties hereto have executed and delivered this Agreement as of the
date first written above.
SANDISK CORPORATION
By:
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Name:
Title:
SHAREHOLDER
By: .
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Name:
Address:
Facsimile:
Schedule 1(a)
Shareholder:
Shares Held of Record:
Shares Beneficially Owned:
Options and Other Rights:
Liens:
1(a)
