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Exhibit 10.2 Equipment Purchase Agreement

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Exhibit 10.2

FOIA Confidential Treatment Requested

Execution Version










EQUIPMENT PURCHASE AGREEMENT





Dated as of January 29, 2009





by and among





TOSHIBA CORPORATION,





SANDISK (IRELAND) LIMITED,





SANDISK (CAYMAN) LIMITED,





SANDISK CORPORATION,





FLASH PARTNERS LIMITED,





and





FLASH ALLIANCE LIMITED



















TABLE OF CONTENTS



Page
1. Definitions and Interpretation 1




2. The Transaction 3




3. Purchase Price; Closing 6




4. Representations and Warranties of Each of the Parties 10




5. Representations and Warranties of the Sellers 11




6. Covenants 12




7. Conditions Precedent to the Sellers' Obligations at the First Closing 13




8. Conditions Precedent to Toshiba's Obligations at the First Closing 14




9. Conditions Precedent to the Subsequent Closings 15




10. Indemnification 15




11. Termination of the Agreement 16




12. General Provisions 16




Attachments:










i














This EQUIPMENT PURCHASE AGREEMENT (this " Agreement ") dated as of January 29, 2009, is entered into by and among TOSHIBA CORPORATION, a Japanese corporation (" Toshiba "), SANDISK (CAYMAN) LIMITED, a company organized under the laws of the Cayman Islands ( ? SanDisk Cayman "), SANDISK (IRELAND) LIMITED, a company organized under the laws of the Republic of Ireland (" SanDisk Ireland "), SANDISK CORPORATION, a Delaware corporation (" SanDisk " and, together with SanDisk Cayman and SanDisk Ireland, the " SanDisk Parties "), FLASH PARTNERS LIMITED, a tokurei yugen kaisha organized under the laws of Japan (" FP "), and FLASH ALLIANCE LIMITED, a tokurei yugen kaisha organized under the laws of Japan (" FA " and, together with FP, the " Sellers " and the Sellers together with the SanDisk Parties and Toshiba, the " Parties ").



WHEREAS, Toshiba and certain SanDisk Parties are each shareholders in FP and FA;



WHEREAS, FP owns the machinery, equipment and other tangible assets described on attached Schedule 2.1(a)(i) and leases the machinery, equipment and other tangible assets described on attached Schedule 2.1(a)(ii) ;



WHEREAS, FA owns the machinery, equipment and other tangible assets described on attached Schedule 2.1(b)(i) and leases the machinery, equipment and other tangible assets described on attached Schedule 2.1(b)(ii) ;



WHEREAS, Toshiba desires to purchase from the Sellers, and the Sellers desire to sell to Toshiba, such owned equipment and the Sellers' rights under such leases, and Toshiba is prepared to assume certain obligations and liabilities in connection therewith, all on the terms and conditions set forth below; and



WHEREAS, simultaneous herewith, Toshiba, SanDisk, SanDisk Cayman and SanDisk Ireland are entering into a Joint Venture Restructure Agreement (the " JVRA "), pursuant to which the parties are amending the Flash Partners Master Agreement by and among Toshiba, SanDisk and SanDisk Cayman dated September 10, 2004, the Flash Alliance Master Agreement by and among Toshiba, SanDisk, and SanDisk Ireland dated July 7, 2006, and also entering into certain other agreements relevant to the operation of FA and FP, as provided therein;



NOW, THEREFORE, in consideration of the premises, representations, warranties, covenants and agreements set forth herein, and for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Sellers, the SanDisk Parties and Toshiba hereby agree as follows:





1. Definitions and Interpretation



1.1 Certain Definitions . The following capitalized terms used in this Agreement shall have the respective meanings assigned in this Agreement:




Term Defined In
Action Section 2.3(d)
Agreement Heading
Applicable Law Section 5.1
Assumed Liabilities Section 2.4







1










Closing Section 3.2(a)
Closing Date Section 3.2(c)
Equipment Section 2.1
Equipment Leases Section 2.1(b)(ii)
Equipment Purchase Closing Section 3.2(b)
Equipment Transactions Section 3.2(a)
Excluded Assets Section 2.2
Excluded Liabilities Section 2.3
FA Heading
FA Equipment Section 2.1(b)(ii)
FA Leased Equipment Section 2.1(b)(ii)
FA Leases Section 2.1(b)(ii)
FA Owned Equipment Section 2.1(b)(i)
FA Purchase Price Section 3.1(a)(ii)
FA Purchased Assets Section 2.1(b)
FP Heading
FP Equipment Section 2.1(a)(ii)
FP Leased Equipment Section 2.1(a)(ii)
FP Leases Section 2.1(a)(ii)
FP Owned Equipment Section 2.1(a)(i)
FP Purchase Price Section 3.1(a)(i)
FP Purchased Assets Section 2.1(a)
Governmental Authority Section 2.3
[***]* Section 10.3
Indemnifying Party Section 10.1
JVRA Recitals
Lease Closing Section 3.2(b)
Lease Transfer Costs Section 3.7(a)
Leased Equipment Section 2.1(b)(ii)
Lien Section 4.4
[***]* Section 8.5
Material Adverse Effect Section 8.10
Material Consent Section 6.3
[***]* Section 3.1
Owned Equipment Section 2.1
Party Heading
Permit Section 5.2
Person Section 4.4



* Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.





2



Post-Closing Period Section 3.7(d)
Pre-Closing Period Section 3.7(d)
Purchased Assets Section 2.1
Resolution Section 3.6(c)
Resolution Period Section 3.6(c)
SanDisk Heading
SanDisk Cayman Heading
SanDisk Ireland Heading
SanDisk Party Heading
Seller Heading
Subsequent Closing Section 3.2(c)
Subsequent Closing Date Section 3.2(c)
Tax Section 2.3
Toshiba Heading


1.2 Interpretation . Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed, as the context indicates, to be followed by the words "but (is/are) not limited to." Wherever in this Agreement words indicating the plural number appear, such words will be considered as words indicating the singular number and vice versa where the context indicates the propriety of such use.




1.3 The terms " Y3 Facility " and " Y4 Facility " as used in this Agreement shall have the meanings assigned to them in the JVRA.






2. The Transaction



2.1 Purchased Assets . Subject to the terms and conditions of this Agreement, and on the basis of the representations, warranties, covenants and agreements set forth herein, at the applicable Closing, the Sellers shall sell, transfer, convey, assign and deliver to Toshiba, and Toshiba shall purchase from the Sellers, all right, title and interest in and to the following assets (collectively, the " Purchased Assets "):




(a) FP Purchased Assets . To be purchased from FP (collectively, the " FP Purchased Assets "):




(i) FP Owned Equipment . The machinery, equipment and other assets described on the attached Schedule 2.1(a)(i) , [***]* which shall represent approximately [***]* of the wafer output capacity of FP and which shall have been calculated from the list of assets owned by FP (the " FP Owned Equipment ");




(ii) FP Leased Equipment . All rights and obligations of FP in connection with the machinery, equipment and other assets, [***]* set forth on attached Schedule 2.1(a)(ii) , which shall represent approximately [***]* of the wafer output capacity of FP (the " FP Leased Equipment " and together with the FP Owned Equipment, the " FP Equipment "), that are subject to the leases specified thereon (the " FP Leases "), it being understood that the assignment and assumption of such rights and obligations shall be effected as set forth in Section 3.6; and











* Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.







3












(iii) FP Documents . All books, records and materials in the possession or control of FP and that are reasonably necessary or appropriate for Toshiba to operate the FP Equipment in substantially the same manner as operated by FP as of the date of this Agreement and as of each Closing Date, including vendor agreements, title documents, user manuals, operating guides, bills of materials, records, maintenance schedules and records, supplier and other vendor ordering information and records, warranties for both materials and equipment purchased and products sold, and all other operational, commercial and technical information related to the FP Equipment.




(b) FA Purchased Assets . To be purchased from FA (collectively, the " FA Purchased Assets "):




(i) FA Owned Equipment . The machinery, equipment and other assets described on the attached Schedule 2.1(b)(i) , [***]* which shall represent approximately [***]* of the wafer output capacity of FA and which shall have been calculated from the list of assets owned by FA (the " FA Owned Equipment ");




(ii) FA Leased Equipment . All rights and obligations of FA in connection with the machinery, equipment and other assets, [***]* set forth on attached Schedule 2.1(b)(ii) , which shall represent approximately [***]* of the wafer output capacity of FA (the " FA Leased Equipment " and, together with the FA Owned Equipment, the " FA Equipment " or together with the FP Leased Equipment, the " Leased Equipment "), that are subject to the leases specified thereon (the " FA Leases " and, together the with FP Leases, the " Equipment Leases "), it being understood that the assignment and assumption of such rights and obligations shall be effected as set forth in Section 3.6; and




(iii) FA Documents . All books, records and papers in the possession or control of FA and that are reasonably necessary for Toshiba to operate the FA Equipment in substantially the same manner as operated by FA as of the date of this Agreement and as of each Closing Date, including vendor agreements, title documents, user manuals, operating guides, bills of materials, records, maintenance schedules and records, supplier and other vendor ordering information and records, warranties for both materials and equipment purchased and products sold, and all other operational, commercial or technical information related to the FA Equipment.




As used in this Agreement, the term " Owned Equipment " means the FP Owned Equipment together with the FA Owned Equipment, and the term " Equipment " means the Owned Equipment together with the Leased Equipment.



(c) Tool Selection Methodology; Substitution of Purchased Assets .











* Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.









4








it is understood by the Parties that the Equipment has been selected with the intention that each of the FP Equipment and the FA Equipment represents approximately [***]* of the equivalent wafer output capacity of the fabs utilized by FP and FA, respectively, as of the date of this Agreement, preserving actual toolset line balance between the capacity transferred to Toshiba and the remaining capacity of FP and FA, which in each case represents as nearly as practicable [***]* the capital equipment of each of FP and FA.



(i) To the extent that the Parties determine that the purchase of Owned Equipment or assignment and assumption of the Equipment Leases with respect to Leased Equipment (1) requires consents of third parties that cannot be obtained in a timely manner or without undue difficulty or expense, (2) would not release SanDisk from the guaranty obligations related to the Leased Equipment, or (3) involves Equipment which, prior to the relevant Closing, is materially damaged, the Parties shall endeavor in good faith to promptly reach agreement on such adjustments to Schedules 2.1(a)(i) , 2.1(a)(ii) , 2.1(b)(i) and/or 2.1(b)(ii) as are necessary to address the foregoing issues.




2.2 Excluded Assets . Notwithstanding anything to the contrary set forth in this Agreement, except for the Purchased Assets, the Sellers shall not transfer at Closing any other assets of the Sellers (such assets, the " Excluded Assets "), which Excluded Assets shall be retained by the Sellers.




2.3 Excluded Liabilities . Notwithstanding anything to the contrary set forth in this Agreement, except for the Assumed Liabilities, the Sellers shall not transfer at Closing any liability for any contracts, agreements, commitments or liabilities of the Sellers or any SanDisk Party whatsoever, including any of the following (collectively, the " Excluded Liabilities "), which Excluded Liabilities shall be retained by the Sellers and/or the SanDisk Parties as applicable:




(a) any liability relating to, arising out of or incurred in connection with the Purchased Assets, or use, operation or possession thereof, prior to the Closing; and




(b) any trade accounts payable, accrued liability or other liability of the Sellers as of the Closing whether or not such amounts are known or payable on or prior to the Closing;




(c) except as expressly provided for in Sections 3.1(a) and 3.7 below, any Taxes or similar charges that may become payable in any jurisdiction by the Sellers by reason of the sale and transfer of the Purchased Assets pursuant hereto, or arising from or relating to Sellers' receipt of the FP Purchase Price or FA Purchase Price (or relief from any Assumed Liability); and




(d) any liability relating to, arising out of or incurred in connection with any final nonappealable decision arising out of any suit, litigation, arbitration or administrative proceeding before any Governmental Authority (all " Actions ") prior to the Closing or initiated after the Closing but based in whole or part on an act or omission of a Seller,











* Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.









5








or any current or former officer, director, employee or agent of a Seller or the use, operation or possession of the Purchased Assets prior to the date of this Agreement.



The term " Tax " (and, with correlative meaning, " Taxes " and ? Taxable ") as used in this Agreement means any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other tax, governmental fee or other assessment or charge of any kind whatsoever, together with any interest or any penalty, addition to tax or additional amount and any interest on such penalty, addition to tax or additional amount imposed by any Governmental Authority. The term " Governmental Authority " as used in this Agreement means any court, tribunal, arbitrator or any government or political subdivision thereof, whether foreign, federal, state or county, or any agency, authority, official or instrumentality of such government or political subdivision.



2.4 Assumed Liabilities . Subject to the terms and conditions of this Agreement, at each Closing, each Seller shall assign to Toshiba, and Toshiba shall assume, the related Assumed Liabilities (as defined below). Thereafter, Toshiba shall pay and discharge all such Assumed Liabilities as and when such Assumed Liabilities become due and owing. The term " Assumed Liabilities ? as used in this Agreement means only those liabilities which relate to, arise out of or are incurred in connection with the Purchased Assets on or after the Closing at which such assets are transferred, including the Equipment Leases to the extent assigned, but not including any Excluded Liabilities and not including any liabilities in connection with the Purchased Assets that are specifically allocated to the Sellers or the SanDisk Parties under other agreements relating to the operation of the Y3 Facility and the Y4 Facility.






3. Purchase Price; Closing



3.1 Purchase Price .




(a) Timing of Purchase Price Payment by Toshiba . Subject to the terms and conditions of this Agreement, as full consideration for the sale, assignment, transfer and delivery of the Owned Equipment by the Sellers to Toshiba, and the execution and delivery by the Sellers of this Agreement and any and all certificates and instruments executed or contemplated to be executed by SanDisk in connection with the Equipment Purchase Closing, Toshiba shall deliver [***]*, by wire transfer of immediately available funds to an account designated by FP or FA, as applicable, an amount equal to:




(i) for FP, [***]* (the " FP Purchase Price "); and




(ii) for FA, [***]* (the " FA Purchase Price ");




provided, however, that, in the event that the sale-and-leaseback arrangements described at Section 3.6(b) below are not obtained, Toshiba and SanDisk shall discuss and agree on a reasonable delay of payment; provided, further, that in no event shall payment be delayed beyond [***]*.










* Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.









6








(b) [***]* by Joint Venture . No later than [***]*, each Seller shall transfer the entire FP Purchase Price and FA Purchase Price, as applicable and [***]*, to each of SanDisk and Toshiba (with each of SanDisk and Toshiba receiving 50% of the applicable purchase price), by wire transfer of immediately available funds to accounts designated by SanDisk and Toshiba, [***]*. SanDisk and Toshiba each agree to provide acknowledgment of such repayment to each Seller.




As used in this agreement, [***]* shall mean [***]*.



3.2 Closing .




(a) The transactions contemplated by this Agreement (the " Equipment Transactions ") shall be consummated at a series of closings (each a " Closing ").




(b) At each Closing, Toshiba will either purchase Owned Equipment (the " Equipment Purchase Closing ") or acquire rights and obligations of the Sellers in connection with the Leased Equipment or, as applicable, the Equipment Leases, each as provided in Section 3.6 below (a " Lease Closing ").




(c) Provided that all of the conditions to a Closing have been met or waived in writing by the Party that has the benefit thereof, each Closing will take place on the date set forth on Schedule 3.2 , or at such other place, date and time as the Parties mutually agree. As set forth on Schedule 3.2 , the first Closing is contemplated to be a Lease Closing. As used in this Agreement, the term " Subsequent Closing " shall mean each of (i) any Lease Closing after the first Closing and (ii) the Equipment Purchase Closing (the date of each such Closing a " Subsequent Closing Date ," and the first Closing Date together with the Subsequent Closing Dates, the " Closing Dates ").




3.3 Deliveries by the Sellers . At each Closing, the Sellers shall (i) take all steps necessary to place Toshiba in actual possession and operating control of all Purchased Assets to be transferred at such Closing, and (ii) deliver the following items, duly executed by the Sellers, in each case in form and substance acceptable to Toshiba:




(a) FP Assignment and Assumption Agreements and Bill of Sal e.




(i) At each Closing, an Assignment and Assumption Agreement executed by FP covering any rights and obligations under any FP Lea
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