Purchase Agreement____ 54 ____ • May 27th, 2005 • M-Systems Flash Disk Pioneers LTD • Computer storage devices • New York
M-Systems Finance Inc., an exempted company limited by shares organized under the laws of the Cayman Islands (the "Company") and a direct wholly owned subsidiary of M-Systems Flash Disk Pioneers Ltd., a company organized under the laws of the State of Israel (the "Guarantor"), proposes to issue and sell to the several parties named in Schedule I hereto (the "Initial Purchasers"), for whom you (the "Representatives") are acting as representatives, U.S.$75,000,000 principal amount of its 1% Convertible Senior Notes Due 2035 (the "Firm Notes"), which are to be unconditionally guaranteed by the Guarantor (the "Firm Guarantees" and together with the Firm Notes, the "Firm Securities"). The Company also proposes to grant to the Initial Purchasers an option to purchase up to U.S.$25,000,000 additional principal amount of such Notes, if any (the "Option Notes") similarly guaranteed (the "Option Guarantees" and together with the Option Notes, the "Option Securities"). The Firm Securities and the
