EXHIBIT 10.32
AMENDMENT TO COMMON R&D AND PARTICIPATION AGREEMENT
THIS AMENDMENT (the "Amendment") to the Common R&D and Participation
Agreement (the "Agreement"), dated as of May 9, 2000 by and between Toshiba
Corporation, a Japanese corporation with a principal place of business at 1-1,
Shibaura 1-chome, Minato-ku, Tokyo 105-8001, Japan, (hereinafter "Toshiba"), and
SanDisk Corporation, a Delaware corporation with a principal place of business
at 140 Caspian Court, Sunnyvale, CA 94089, U. S. A. (hereinafter "SanDisk"), is
dated and effective as of April 10, 2002.
WITNESSETH
----------
WHEREAS, Toshiba and SanDisk have entered into a New Master Agreement dated
as of April 10, 2002;
WHEREAS, Toshiba and SanDisk desire to amend the Agreement in order to make
it consistent with the foregoing and the terms and conditions of the New Master
Agreement.
NOW THEREFORE, in consideration of the premises and of the mutual promises
herein contained, the parties hereto agree as follows:
AGREEMENT
---------
1. Amendment to Section 5.1(i). Section 5.1(i) of the Agreement is hereby
deleted in its entirety and the following is substituted in lieu thereof:
"From the second quarter of the calendar year 2000 through and
including March 31, 2002:
SanDisk will share in Toshiba's Common R&D expenditures as set forth
in Table A below, and SanDisk shall pay Toshiba for such Common R&D
expenditures in the amounts and on or prior to the dates provided in
Table B as follows:
- ----------------------------------------------------------------------------------------------------------------------
Table A
- ----------------------------------------------------------------------------------------------------------------------
SanDisk's Allocation of Common R&D Expenses
- ----------------------------------------------------------------------------------------------------------------------
2000 2001 2002
- ----------------------------------------------------------------------------------------------------------------------
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
- ----------------------------------------------------------------------------------------------------------------------
(amounts incurred in millions of Yen)
- ----------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***] [***] [***] [***] [***]
- ----------------------------------------------------------------------------------------------------------------------
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
[***] INDICATES THAT CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO RULE 24B-2. CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
- ----------------------------------------------------------------------------------------------------------------------
Table B
- ----------------------------------------------------------------------------------------------------------------------
Payment by SanDisk for Common R&D Expenses
- ----------------------------------------------------------------------------------------------------------------------
2002 Total
- ----------------------------------------------------------------------------------------------------------------------
June 30 September 30 December 31
- ----------------------------------------------------------------------------------------------------------------------
(amounts payable in millions of Yen)
- ----------------------------------------------------------------------------------------------------------------------
[***] [***] [***] [***]
- ----------------------------------------------------------------------------------------------------------------------
Notwithstanding the foregoing, in the event of the termination of this
Agreement after the Effective Date but prior to December 31, 2002, SanDisk shall
be obligated immediately to pay any unpaid amount set forth in Table B.
2. Amendment to Sections 5.1(ii) and (iii). Sections 5.1(ii) and (iii) of
the Agreement are hereby deleted in their entirety and the following is
substituted in lieu thereof:
"(ii) After March 31, 2002:
The parties acknowledge that after March 31, 2002, it will be difficult to
predetermine Toshiba's total Common R&D expenditures and a fixed allocation
of Common R&D expenditures for SanDisk. Therefore, after March 31, 2002,
the payment by SanDisk to Toshiba for Common R&D expenditures will be based
on a percentage of SanDisk's Net Sales (as hereinafter defined), and
calculated and paid as follows:
Within thirty days of the end of each calendar quarter based on SanDisk's
Net Sales of NAND Flash Memory Products for the quarter just ended as
follows:
From April 1, 2002 to December 31, 2002
(a) [***] of the first US $ 100 million for the quarter reported;
(b) [***] of the next US $ 100 million for the quarter reported; and
(c) [***] of net sales in excess of US $ 200 million per quarter.
For the purpose of this Article, "Net Sales" shall mean the invoice price
for NAND Flash Memory Products billed by SanDisk.
(iii) Notwithstanding (ii) above, SanDisk's quarterly contribution for
Common R&D pursuant to (i) and (ii) above shall not exceed the sum of (a)
[***] of the total Common R&D annual expenditure of the Semiconductor
Company of Toshiba, as notified to SanDisk by Toshiba at the beginning of
each of Toshiba fiscal year ("Total R&D Budget") for the first [***] of the
Total R&D Budget and (b) [***] of the portion of such Total R&D Budget in
excess of [***]."
3. Pricing for 2003 and Beyond. For 2003 and beyond, SanDisk's quarterly
common R&D payments shall be agreed upon by the parties and will be based on
certain percentages of SanDisk's Net Sales (as defined in the Agreement) and
calculated in a manner
[***] INDICATES THAT CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO RULE 24B-2. CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
consistent with Section 5.1(ii) of the Agreement, provided that the percentages
used in such calculation shall not exceed (a) the percentages of the applicable
SanDisk Net Sales amount set forth in Section 5.1(ii) of the Agreement, as
amended herein and (b) the applicable percentages of the Total R&D Budget set
forth in Section 5.1(iii) of the Agreement, as amended herein.
4. Effect of this Amendment. Except as specifically amended hereby, the
Agreement shall remain in full force and effect as in existence on the date
hereof and is hereby ratified and confirmed in all respects.
5. Governing Law. This Amendment shall be governed by and construed in
accordance with the Governing Law provision incorporated by reference into the
Agreement.
6. Counterparts. This Amendment may be executed in any number of
counterparts which together shall constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
and year first above written.
TOSHIBA CORPORATION
By: /s/ Takeshi Nakagawa
----------------------------------------
Name: Takeshi Nakagawa
Title: Corporate Senior Vice President
President & CEO
Semiconductor Company
SANDISK CORPORATION
By: /s/ Eli Harari
----------------------------------------
Name: Eli Harari
Title: President & Chief Executive Officer
[Signature Page to Amendment to
Common R&D Agreement]