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Entry into a Material Definitive

Parent

) and Schrader Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary of Parent (

Merger Sub

), entered into an Agreement and Plan of Merger (the

Merger Agreement

) with SanDisk Corporation, a Delaware corporation (

SanDisk

), providing for the acquisition of SanDisk by Parent.

The Merger

The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into SanDisk (the

Merger

), with SanDisk as the surviving corporation and a wholly-owned subsidiary of Parent. The time at which the Merger becomes effective, pursuant to the terms of the Merger Agreement, is referred to as the

Effectiv e Time

, the closing of the Merger is referred to as the

Closing

and the date on which the Closing occurs is referred to as the

Closing Date

.

As publicly announced by Parent in Parents Current Report on Form 8-K filed on September30, 2015, on September29, 2015, Parent entered into a stock purchase agreement with Unis Union Information System Ltd., a Hong Kong corporation (the

Unis Investor

), and Unisplendour Corporation Limited, a Chinese corporation (the

Unis Guarantor

and, together with Unis Investor, the

Unis Parties

), pursuant to which Parent agreed to issue and sell to the Unis Investor 40,814,802 shares of Parents common stock, $0.01 par value (the

Parent Common Stock

) for $92.50 per share, for an aggregate purchase price of approximately $3.775 billion, and the Unis Guarantor agreed to guarantee the payment and performance of the Unis Investors obligations therein (collectively, the

Unis Transaction

and, the consummation of the Unis Transaction, the

Unis Closing

). The obligations of Parent and the Unis Parties to cause the Unis Closing to occur are subject to certain regulatory and other conditions as described in Parents public filings, including clearance by the U.S. Committee on Foreign Investment in the United States (

CFIUS

), the receipt of requisite regulatory approvals and approval of the Unis Transaction by stockholders of the Unis Guarantor.

In the Merger, each issued and outstanding share of common stock of SanDisk, $0.001 par value (the

SanDisk Common Stock

), other than shares of SanDisk Common Stock held in the treasury of SanDisk, shares of Common Stock owned by stockholders who have validly exercised their appraisal rights under Delaware law and shares of Common Stock owned by Parent or any subsidiary of Parent (including Merger Sub), will be converted into the right to receive the below consideration per share of SanDisk Common Stock, subject to reallocation as described further below (the

Per Share Merger Consideration

):

(A) If the Unis Closing has occurred prior to the Effective Time, (i)$85.10 per share in cash; and (ii)0.0176 shares of Parent Common Stock; or

(B) If the Unis Closing has not occurred or the Unis Transaction has been terminated prior to the Effective Time, (i)$67.50 per share in cash; and (ii)0.2387 shares of Parent Common Stock.

The above allocation between cash and shares of Parent Common Stock is subject to reallocation, at Parents election: if the amount of cash that SanDisk has available for use in the United States without payment of withholding or United States income taxes on the Closing Date falls short of a target cash amount of $4.049 billion, if the Closing occurs before June30, 2016, or $4.139 billion, if the Closing occurs on or after June30, 2016 (the amount of such shortfall, if any, the

Closing Cash Shortfall

). If Parent so elects, the cash portion of the Per Share Merger Consideration will be reduced by the Closing Cash Shortfall, divided by the number of shares of SanDisk Common Stock outstanding as of the Closing Date (the

Per Share Cash Reduction Amount

), and the Parent Common Stock portion of the Per Share Merger Consideration will be correspondingly increased by a number of shares of Parent Common Stock equal to the Per Share Cash Reduction Amount divided by $79.5957.

The transaction will be financed by a mix of cash, new debt financing and Parent Common Stock. In connection with the transaction, Parent expects to enter into new debt facilities totaling $18.1 billion. Parent has received commitments for a $1 billion revolving credit facility, $3 billion in amortizing term loans, $6 billion in other term loans and $8.1 billion in secured and unsecured bridge facilities. Parent expects to issue approximately $5.1 billion in secured and unsecured notes in lieu of drawing the bridge facilities at close, with the balance of the bridge facilities to be repaid with available cash. The proceeds from the new debt facilities are expected to be used to pay part of the purchase price, refinance existing debt of Parent and SanDisk and pay transaction related fees and expenses.

Effect on SanDisk Equity Awards.

The treatment of SanDisk stock options under the Merger Agreement will vary depending on whether the exercise price of such options exceeds the value of the Per Share Merger Consideration as of the Closing Date (the

Closing Merger Consideration

Value

), determined by the sum of (i)the cash portion of the applicable Per Share Merger Consideration and (ii)the value of the Parent Common Stock portion of the Per Share Merger Consideration based on the volume weighted average trading price of the Parent Common Stock over the five trading days preceding the Closing Date.

Under the Merger Agreement, Parent will assume all unvested and outstanding SanDisk stock options, all unvested restricted stock units and all outstanding SanDisk stock options with a per share exercise price that is greater than or equal to the Closing Merger Consideration Value (whether or not such options have vested) held by employees immediately prior to the Closing. All such stock options and restricted stock units will be converted into Parent stock options and restricted stock units, respectively, pursuant to the exchange ratio set forth in the Merger Agreement, and subject to the same vesting schedule (including any acceleration of vesting) as such stock options and restricted stock units had prior to being converted. Upon exercise or vesting after the Closing Date, respectively, such stock options and restricted stock units will entitle the holder to receive shares of Parent Common Stock; provided, that if the Unis Closing has occurred, Parent may elect to settle some or all of stock options and restricted stock units in cash, based on Parents share price on the exercise date or vesting date, respectively.

All vested SanDisk stock options with an exercise price less than the Closing Merger Consideration Value, and all vested restricted stock units, after giving effect to any acceleration, will be canceled at the Effective Time in exchange for the Per Share Merger Consideration, reduced by the...


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