exv10w1



 







Exhibit 10.1




Guarantee Agreement




June 20, 2006




SanDisk Corporation




IBJ Leasing Co., Ltd.




Sumisho Lease Co., Ltd.




Toshiba Finance Corporation





 









 








Guarantee Agreement




     SanDisk Corporation (the “Guarantor”) and IBJ Leasing Co., Ltd., Sumisho Lease Co., Ltd., and
Toshiba Finance Corporation as SD Lessor (in such capacity, collectively, the “SD Lessors”) hereby
enter into this guarantee agreement (the “Agreement”) with respect to the Master Lease Agreement
dated June 20, 2006 and the related individual agreements entered into thereunder (collectively,
the “Lease Agreement”), in each case entered into by and between the SD Lessors and IBJ Leasing
Co., Ltd. and Sumisho Lease Co., Ltd. as Toshiba Lessor thereunder (in such capacity, collectively,
the “Toshiba Lessors”) and Flash Partners Yugen Kaisha (the “Lessee”).



     Unless as otherwise specified in this Agreement, the words defined in the Lease Agreement shall
have the same meaning in this Agreement.



Article 1. (Guarantee)




     The Guarantor shall guarantee the performance, from time to time, of the obligations subject to the
guarantee below (the “Guaranteed Obligation”) to the SD Lessors, jointly and severally
(rentai-hosho) with the Lessee (the “Guarantee”).



(Guaranteed Obligation)




     Guaranteed Obligation shall mean payment obligations of lease rental (lease-ryo), stipulated loss
payment (kitei-songaikin), purchase option exercise price (konyu-sentakuken-koshikagaku), terminal
return adjustment amount (henkanji-choseikin), break funding cost, late charges (chien-songaikin),
and any and all payment obligations of other amounts concerning SD Tranche I and SD Tranche II in
individual transactions pursuant to the Lease Agreement; provided that the Guarantor and the SD
Lessors may consult in the event of any doubt concerning “other amounts” as mentioned above.



     In any event, the Guarantor shall not pay any obligation concerning Toshiba Tranche 1 and Toshiba
Tranche 2, and all amounts owing from Lessee to the Toshiba Lessors in relation to Toshiba Tranche
1 or Toshiba Tranche 2 or otherwise are expressly excluded from the Guaranteed Obligations.



Article 2. (Period of Request for the Performance of Guarantee Obligation)




     In the event the SD Lessors demand performance of the Guarantee to the Guarantor, the SD Lessors
must make a written demand to the Guarantor for performance of the Guaranteed Obligation which the
Lessee has failed to duly and punctually perform. The SD Lessors may, upon each failure of due and
punctual performance of the Guaranteed Obligation, make demand pursuant to this Article; any delay
in making such demand will not exempt the Guarantor from the obligations under this Guarantee.



Article 3. (Performance of Guaranteed Obligation)





	3.1	 	The Guarantor shall, in the event the Lessee fails to perform all or any part of its
obligations under the Guaranteed Obligation within 10 business days from each due date, perform the
Guarantee in favor of the SD Lessors within 20 business days from the receipt of the written demand
from the SD Lessors.





 









 






	3.2	 	If there is any Guaranteed Obligation upon the occurrence of any termination event (kaijo-jiyu)
under the Lease Agreement, the Guarantor shall perform the Guarantee within 20 business days from
the receipt of the written demand from the SD Lessors.
	 
	3.3	 	If any termination event under the Lease Agreement occurs, the Guarantor may, pursuant to
Article 26, Paragraph 8 or Article 26, Paragraph 9 of the Lease Agreement, succeed the rights,
obligations and legal title of the Lessee under the Lease Agreement or the rights, obligations and
legal title of Other Guarantor (defined below) under the guarantee agreement dated the same date
hereof by and between Toshiba Corporation (the “Other Guarantor”) and the Toshiba Lessors,
whereupon such termination event shall be deemed cured.
	 
	3.4	 	The Guarantor may not exercise the right of subrogation, prior indemnity and post indemnity
with respect to the Guarantee against the Lessee until any and all receivables of the SD Lessors
and Toshiba Lessors against the Lessee in respect of this Agreement and the Lease Agreement have
been paid in full.





Article 4. (Relationship with Other Security Rights)





	4.1	 	The guarantee under this Agreement shall be granted in addition to other security interests or
guarantees held by the SD Lessors in connection with the Guaranteed Obligation, and the
effectiveness of such other securities or guarantees shall not be affected by the security
interests pursuant to this Agreement.
	 
	4.2	 	The Guarantor shall not claim exemption even if the SD Lessors, in their reasonable discretion,
alter or terminate other security interests or guarantees securing the Guaranteed Obligations,
provided, however, that the SD Lessors shall give at least fifteen (15) days prior notice to the
Guarantor in case of such alteration or termination unless the same is contemplated by the Related
Agreements (honken-kanren-keiyaku).





Article 5. (Transfer of Rights and Obligations)




     The SD Lessors and the Guarantor shall not, without obtaining prior written consent of the other
party, transfer or pledge the rights and obligations under this Agreement to any third party,
provided, however, this Article shall not prohibit any assignment by the Guarantor to persons who
acquire all or substantial part of the assets, business and shares of or in the Guarantor by means
of sale, merger, acquisition or other change in management control. In addition, in each individual
transaction, (i) pursuant to the SD Receivables Sale and Purchase Agreement
(Honken-SD-Saiken-Baibai-Keiyaku), the SD Lessors may transfer the right to demand the performance
of the Guaranteed Obligation with respect to SD Tranche I hereunder to the SD Borrower
(Honken-SD-Kariirenin) and (ii) pursuant to the SD Receivables Security Assignment Agreement


(Honken-SD-Saiken-Joto-Tampo-Keiyaku), the SD Borrower may transfer the right to demand performance
of the Guaranteed Obligation with respect to SD Tranche I hereunder to the SD Lenders
(Honken-SD-Kashitsukenin). The Guarantor hereby grants prior consent to such transfers and agrees
to cooperate with the SD Lessors in preparing and delivering the documents requested by the SD
Lessors.





 









 








Article 6. (Limited Recourse)




     The limitation of liability by the limited recourse provision pursuant to Article 29, Paragraph 1
of the Lease Agreement shall not prevent the exercise of the rights of the SD Lessors against the
Guarantor pursuant to this Agreement, nor shall the provisions thereof affect the performance of
the guarantee obligations pursuant to this Agreement.



Article 7. (Modification of the Agreement)




     This Agreement may not be modified except with the written consent of the Guarantor, the SD Lessors
and the Toshiba Lessors.



Article 8. (Governing Law)




     This Agreement shall be governed by, and construed in accordance with, the laws of Japan in every
respect.



Article 9. (Jurisdiction)




     Any and all disputes arising out of or in connection with this Agreement shall be subject to the
exclusive jurisdiction of the Tokyo District Court.



 









 





     This Guarantee Agreement shall be prepared in four counterparts and the Guarantor and the SD
Lessors shall each retain one copy hereof.



June 20, 2006




	 	 	 	 	 
	 

	 	 	 	[Guarantee Agreement]

	 

	 	Guarantor:
	 	SanDisk Corporation
	 
	 	 	 	/s/ Eli Harari 
	 

	 	 	 	By: Eli Harari
	 

	 	 	 	Title: Chief Executive Officer






 









 






	 	 	 	 	 
	 

	 	 	 	[Guarantee Agreement]

	 

	 	SD Lessor:
	 	IBJ Leasing Co., Ltd.
	 
	 	 	 	/s/ IBJ Leasing Co., Ltd.
	 

	 	 	 	By:
	 

	 	 	 	Title:






 









 







	 	 	 	 	 
	 

	 	 	 	[Guarantee Agreement]

	 

	 	SD Lessor:
	 	Sumisho Lease Co., Ltd.
	 
	 	 	 	/s/ Sumisho Lease Co., Ltd.
	 

	 	 	 	By:
	 

	 	 	 	Title:






 









 






	 	 	 	 	 
	 

	 	 	 	[Guarantee Agreement]

	 

	 	SD Lessor:
	 	Toshiba Finance Corporation
	 
	 	 	 	/s/ Toshiba Finance Corporation
	 

	 	 	 	By:
	 

	 	 	 	Title: