ex10_1.htm


    
      
        Exhibit
10.1

        FOIA
Confidential Treatment Requested

        Execution
Version

      

    

     

    
      

      

    

    



    


    
      


       

    

     

    JOINT
VENTURE RESTRUCTURE 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.

                  	
                    2

                  
	
                    2.

                  	
                    Transactions.

                  	
                    4

                  
	
                    3.

                  	
                    Capital
      Equipment Acquisition Transactions

                  	
                    5

                  
	
                    4.

                  	
                    Allocation
      of Capacity to Toshiba

                  	
                    6

                  
	
                    5.

                  	
                    Modification
      of Joint Venture Agreements, Future Technology  Transaction and
      Expansion of Capacity

                  	
                    7

                  
	
                    6.

                  	
                    [***]

                  	
                    9

                  
	
                    7.

                  	
                    Foundry
      and [***]*

                  	
                    9

                  
	
                    8.

                  	
                    Representations
      and Warranties of Each of the Parties

                  	
                    9

                  
	
                    9.

                  	
                    Additional
      Matters

                  	
                    10

                  
	
                    10.

                  	
                    Miscellaneous

                  	
                    11

                  


          

        

      

    

     

     

     

     

    
      

    

      
      * 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.

       

    

     

     

    

      
        
           


        

        
          i

          
            

          

        

        
           


        

      


      This
JOINT VENTURE RESTRUCTURE
AGREEMENT (this “Agreement”), dated as
of January 29, 2009, is entered into by and among, on one side, TOSHIBA
CORPORATION, a Japanese corporation (“Toshiba”), and, on
the other side, SANDISK CORPORATION, a Delaware corporation (“SanDisk
Corporation”), SANDISK (CAYMAN) LIMITED, a company organized under the
laws of the Cayman Islands (“SanDisk Cayman”) and
SANDISK (IRELAND) LIMITED, a company organized under the laws of the Republic of
Ireland (“SanDisk
Ireland,” and collectively with SanDisk Corporation and SanDisk Cayman,
“SanDisk”),
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 “JVs” or “Joint Ventures” and
the Joint Ventures together with SanDisk and Toshiba, the “Parties”).

       

      WHEREAS,
pursuant to that certain Flash Partners Master Agreement (the “FP Master Agreement”)
by and among Toshiba, SanDisk Corporation and SanDisk Cayman, dated as of
September 10, 2004 and the agreements referenced therein (the “FP Agreements”), the
Parties have had a collaboration for development and manufacture of Y3 NAND
Flash Memory Products (as defined in the FP Agreements);

       

      WHEREAS,
pursuant to that certain Flash Alliance Master Agreement (the “FA Master Agreement”)
by and among Toshiba, SanDisk Corporation and SanDisk Ireland, dated as of July
7, 2006 and the agreements referenced therein (the “FA Agreements”), the
Parties have had a collaboration for development and manufacture of Y4 NAND
Flash Memory Products (as defined in the FA Agreements);

       

      [***]*;

       

      WHEREAS,
pursuant to that certain 3D Collaboration Agreement by and between Toshiba and
SanDisk Corporation, dated as of June 13, 2008 (the “3D Collaboration
Agreement”), the Parties have expanded the collaboration to include 3D
Memory Products as that term is defined in the 3D Collaboration Agreement
(“3D Memory
Products”), and the Patent Cross License Agreement between Toshiba and
SanDisk Corporation, dated as of July 30, 1997, as amended (the “Cross License
Agreement”) (collectively, the FP Agreements, the FA Agreements, [***]*, the 3D
Collaboration Agreement and the Cross License Agreement, are from time to time
referred to herein as the “Joint Venture
Agreements”);

       

      WHEREAS,
the Parties have entered into a non-binding memorandum of understanding dated as
of October 20, 2008 to restructure and amend the Joint Venture Agreements in
part and to provide for the acquisition by Toshiba of certain capacity and
equipment in connection with the production of NAND Flash Memory Products at the
Joint Ventures; and

       

      WHEREAS,
in order to realize these goals, the Parties desire to consummate or cause to be
consummated the Transactions described in this Agreement and an Equipment
Purchase Agreement substantially in the form of the attached Exhibit A (the “Equipment Purchase
Agreement”), a SanDisk Foundry Agreement substantially in the form of the
attached Exhibit
B (the “Foundry
Agreement”) and any other transactions which the Parties may from time
to

       

      

        

      

        
        * 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.

         

      


      
        
           


        

        
          1

          
            

          

        

        
           


        

      


      time
consider necessary or appropriate to carry out the intent of the Parties as
expressed herein and therein.

       

      NOW,
THEREFORE, in consideration of the mutual promises, covenants and conditions set
forth herein, the Parties hereby agree as follows:

       

      1. Definitions.

       

      
        	
                1.1  

              	
                The
      following capitalized terms used in this Agreement shall have the
      respective meanings assigned in this
Agreement:

              


      

       

      
        
          	
                  Term

                	
                  Defined In

                
	
                  3D
      Collaboration Agreement

                	
                  Recitals

                
	
                  3D
      Memory Products

                	
                  Recitals

                
	
                  [***]*

                	
                  Section
      5.4(b)

                
	
                  [***]*

                	
                  Section
      7.3

                
	
                  Agreement

                	
                  Heading

                
	
                  [***]*

                	
                  Section
      4.1(d)(iii)

                
	
                  [***]*

                	
                  Section
      6.1(a)(iii)

                
	
                  [***]*

                	
                  Section
      4.1(d)(ii)

                
	
                  Cross
      License Agreement

                	
                  Recitals

                
	
                  Equipment

                	
                  Section
      2.1(a)(i)

                
	
                  Equipment
      Purchase Agreement

                	
                  Recitals

                
	
                  FA

                	
                  Heading

                
	
                  FA
      Agreements

                	
                  Recitals

                
	
                  FA
      Master Agreement

                	
                  Recitals

                
	
                  [***]*

                	
                  Section
      5.4(a)(i)

                
	
                  Foundry
      Agreement

                	
                  Recitals

                
	
                  FP

                	
                  Heading

                
	
                  FP
      Agreements

                	
                  Recitals

                
	
                  FP
      Master Agreement

                	
                  Recitals

                
	
                  Governmental
      Authority

                	
                  Section
      8.3

                
	
                  [***]*

                	
                  Schedule
      4.1(a)

                
	
                  [***]*

                	
                  Section
      4.1(a)

                
	
                  [***]*

                	
                  Schedule
      4.1(a)

                
	
                  [***]*

                	
                  Recitals

                
	
                  Joint
      Venture Agreements

                	
                  Recitals

                
	
                  Joint
      Ventures

                	
                  Heading

                
	
                  JV

                	
                  Heading

                


        

      

      


      

        

      

        
        * 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

          
            

          

        

        
           


        

      


      


      
        
          
            
              
                	
                        [***]*

                      	
                        Schedule
      4.1(b)(ii)

                      
	
                        [***]*

                      	
                        Schedule
      4.1(b)(i)

                      
	
                        [***]*

                      	
                        Schedule
      4.1(b)(i)

                      
	
                        [***]*

                      	
                        Schedule
      4.1(b)(ii)

                      
	
                        Lien

                      	
                        Section
      8.3

                      
	
                        [***]*

                      	
                        Section
      4.1(d)(iv)

                      
	
                        Parties

                      	
                        Heading

                      
	
                        Person

                      	
                        Section
      8.3

                      
	
                        SanDisk

                      	
                        Heading

                      
	
                        SanDisk
      Cayman

                      	
                        Heading

                      
	
                        SanDisk
      Corporation

                      	
                        Heading

                      
	
                        SanDisk
      Ireland

                      	
                        Heading

                      
	
                        [***]*

                      	
                        Section
      7.2(a)

                      
	
                        [***]*

                      	
                        Section
      7.2(b)

                      
	
                        [***]*

                      	
                        Section
      5.6(a)

                      
	
                        Toshiba

                      	
                        Heading

                      
	
                        [***]*

                      	
                        Schedule
      4.1(b)(ii)

                      
	
                        [***]*

                      	
                        Section 5.2(a)

                      
	
                        [***]*

                      	
                        Schedule
      4.1(b)(i)

                      
	
                        [***]*

                      	
                        Schedule
      4.1(b)(i)

                      
	
                        [***]*

                      	
                        Schedule
      4.1(b)(ii)

                      
	
                        [***]*

                      	
                        Schedule
      4.1(b)(i)

                      
	
                        [***]*

                      	
                        Section
      4.1(d)(i)

                      
	
                        Transaction
      Agreements

                      	
                        Section
      2.1(a)

                      
	
                        Transactions

                      	
                        Section
      2.1(a)

                      
	
                        [***]*

                      	
                        Section
      5.4(a)(ii)

                      
	
                        [***]*

                      	
                        Section
      4.1(d)(i)

                      


              

            

          

        

      

      


       

      
        	
                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
      term “Rules of
      Construction and Documentary Convention” as used in this Agreement
      means those certain Rules of Construction and Documentary Convention
      attached to the FP Master Agreement and the FA Master Agreement, as
      applicable, commencing from Section 2.1
therein.

              


      

       

      

        

      

        
        * 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

          
            

          

        

        
           


        

      


       

      
        	
                1.4  

              	
                The
      term “R/W” as used in
      this Agreement refers to certain 3D Memory Products and has the meaning
      set forth in the 3D Collaboration
Agreement.

              


      

       

      
        	
                1.5  

              	
                The
      term “NAND” as used
      in this Agreement means NAND Flash Memory
  Products.

              


      

       

      
        	
                1.6  

              	
                The
      term [***]* as
      used in this Agreement means (i) the requirements of [***]* of the
      FP Master Agreement, (ii) the requirements of [***]* of the
      FA Master Agreement and (iii) the [***]*.

              


      

       

      
        	
                1.7  

              	
                The
      term “Y3
      Facility” as used in this Agreement means that facility located at
      Yokkaichi, Mie, Japan which, following the consummation of the
      Transactions, shall consist of FP equipment and production and Toshiba
      equipment and production.

              


      

       

      
        	
                1.8  

              	
                The
      term “Y4
      Facility” as used in this Agreement means that facility located at
      Yokkaichi, Mie, Japan which, following the consummation of the
      Transactions, shall consist of FA equipment and production and Toshiba
      equipment and production.

              


      

       

      
        	
                1.9  

              	
                Capitalized
      terms not otherwise set forth in this Section 1 shall have
      the meanings assigned to them in the Equipment Purchase Agreement, the FP
      Agreements, the FA Agreements and/or the 3D Collaboration Agreement as the
      context requires.

              


      

       

      2. Transactions.

       

      
        	
                2.1  

              	
                Transactions and
      Deliveries.

              


      

       

      
        	
                (a)  

              	
                Basic
      Transactions.  Subject to and on the terms and conditions
      set forth in this Agreement, the Equipment Purchase Agreement, the Foundry
      Agreement, any amendments to the Joint Venture Agreements including any
      Joint Venture equipment lease agreements and other agreements signed of even
      date herewith (collectively, the “Transaction
      Agreements”) the Parties agree to effect the transactions set forth
      in this Section
      2.1 (the “Transactions”),  all
      of which shall be considered binding as of, and to occur on, the date
      hereof unless the date for actual performance is otherwise
      stipulated:

              


      

       

      
        	
                (i)  

              	
                Committed Capacity
      Transfer.  Toshiba shall acquire approximately [***]* of the
      current production capacity of each of FP and FA for NAND Memory Products
      as set forth in Article 4 below;
and

              


      

       

      
        	
                (ii)  

              	
                Toshiba Equipment
      Purchase.  Upon the terms and conditions set forth in the
      Equipment Purchase Agreement, Toshiba shall acquire owned equipment
      representing approximately [***]* of the
      capacity of each of FP and FA and leased equipment representing
      approximately [***]* of the
      capacity of each of FP and FA (the “Equipment”).

              


      

       

      

        

      

        
        * 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

          
            

          

        

        
           


        

      


      
        	
                (iii)  

              	
                Foundry
      Option.  Toshiba and SanDisk shall enter into the Foundry
      Agreement pursuant to which, until [***]*,
      SanDisk will have the right to purchase NAND Memory Products on the terms
      and conditions set forth therein.

              


      

       

      
        	
                (iv)  

              	
                SanDisk Conversion
      Option.  Subject to Toshiba’s consent, to be granted or
      withheld at the time of exercise, SanDisk will have the option to cause FP
      and FA to reacquire a portion of the production capacity and Equipment
      being transferred to Toshiba pursuant to this Agreement and the Equipment
      Purchase Agreement, as set forth in Section 7.2
      below.

              


      

       

      
        	
                (v)  

              	
                Amendment to Joint
      Venture Agreements.  The Parties agree that the Joint
      Venture Agreements are hereby amended to the extent necessary to conform
      to the provisions set forth herein.

              


      

       

      
        	
                (vi)  

              	
                Transfer of Additional
      Capacity to Toshiba.  The Parties may, if mutually agreed
      in [***]*,
      effect the transfer to Toshiba of additional capacity and owned equipment
      as provided in and subject to Section 7.3.

              


      

       

      
        	
                (vii)  

              	
                JV Ownership Interest
      Remains Unchanged.  For the avoidance of doubt, nothing
      in this Agreement shall affect the Parties’ equity interests in each of FP
      and FA (i.e. 50.1% for Toshiba and 49.9% for
  SanDisk).

              


      

       

      
        	
                (b)  

              	
                Deliveries.  Each
      of the relevant Parties agrees to make the following deliveries to the
      other Parties at the time of the execution of this
    Agreement:

              


      

       

      
        	
                (i)  

              	
                Counterpart
      originals of this Agreement duly executed by each of the Parties as of the
      date hereof concurrently with the execution of this
    Agreement;

              


      

       

      
        	
                (ii)  

              	
                Counterpart
      originals of the Equipment Purchase Agreement duly executed as of the date
      hereof concurrently with the execution and delivery of this Agreement;
      and

              


      

       

      
        	
                (iii)  

              	
                Counterpart
      originals of the Foundry Agreement (as provided for in Section 7.1 below)
      duly executed by the Parties as of the date hereof concurrently with the
      execution and delivery of this
Agreement.

              


      

       

      3. Capital
Equipment Acquisition Transactions

       

      
        	
                3.1  

              	
                Capital Equipment
      Purchase by Toshiba.  Upon the terms and subject to the
      conditions set forth in the Equipment Purchase Agreement, Toshiba shall
      acquire the Equipment.

              


      

       

      
        	
                3.2  

              	
                Use of Proceeds by
      Joint Ventures. The Parties shall
      cause each of FP and FA upon receipt of proceeds to payoff or pay down (on
      an equal pro-rata basis) loans from its shareholders with the proceeds
      realized from the sale of the Equipment.  Subject
    to

              


      

       

      

        

      

        
        * 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

          
            

          

        

        
           


        

      


      further
mutual agreement of the Parties, any remaining funds will be retained in FP and
FA for technology transitions and capacity expansions, or otherwise used to
return equity investments made in FP and FA by the shareholders.

       

      4. Allocation
of Capacity to Toshiba

       

      
        	
                4.1  

              	
                Allocation of Current
      Capacity to Toshiba; Allocation of Fab Lot
  Output.

              


      

       

      
        	
                (a)  

              	
                Initial Toshiba
      Capacity.  Pursuant to the implementation schedule set
      forth in Section 4.1(c) below, the Parties shall allocate to Toshiba,
      and Toshiba shall acquire, approximately [***]* of the
      pre-restructuring production capacity (and related Equipment) from each of
      FP and FA, [***]*. Such
      initial allocation in the percentages set forth on Schedule 4.1(a)
      shall be referred to herein as the [***]*.

              


      

       

      
        	
                (b)  

              	
                Output
      Allocation.  

              


      

       

      
        	
                (i)  

              	
                Except
      as described in Section 4.1(b)(ii), the actual monthly lot output from
      each of the Y3 Facility and the Y4 Facility shall be allocated between
      Toshiba and FP or FA, as applicable, based on [***]* and
      the applicable [***]*, as
      set forth in Schedule 4.1(b)(i).

              


      

       

      
        	
                (ii)  

              	
                During
      any month during which the planned production of any of FP, FA or the
      Toshiba Capacity, as applicable, [***]*, as
      defined in Schedule 4.1(b)(i), the Parties
      (as between the Joint Ventures and Toshiba) shall be [***]*.

              


      

       

      
        	
                (c)  

              	
                Implementation
      Schedule.  The capacity associated with each Equipment
      transfer contemplated by the Equipment Purchase Agreement shall transfer
      at the time of Toshiba’s acquisition of the related Equipment, subject,
      however, to Section 3.6 of the Equipment Purchase
      Agreement.  Subject to Sections 3.6 and 3.7(a) of the Equipment
      Purchase Agreement, depreciation and lease costs associated with the
      transferred equipment or capacity shall be borne by Toshiba immediately
      after the date of Toshiba’s acquisition of the related
      Equipment.

              


      

       

      
        	
                (d)  

              	
                Work in Process
      Inventory.  [***]*.

              


      

       

      
        	
                (i)  

              	
                [***]*.

              


      

       

      
        	
                (ii)  

              	
                [***]*.

              


      

       

      
        	
                (iii)  

              	
                [***]*.

              


      

       

      
        	
                (iv)  

              	
                [***]*.

              


      

       

      

        

      

        
        * 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

          
            

          

        

        
           


        

      


      5. Modification
of Joint Venture Agreements, Future TechnologyTransaction and Expansion of
Capacity

       

      
        	
                5.1  

              	
                Operations.

              


      

       

      
        	
                (a)  

              	
                No Operational Effects
      from Toshiba Capacity. 

              


      

       

      
        	
                (i)  

              	
                Except
      as otherwise provided in or necessary to implement the Transaction
      Agreements, the FA, FP and Toshiba Capacity equipment in the Y3 and Y4
      Facilities will be [***]*.  There
      will be no change in the fabs’ operating methods, engineering, production
      control processes, access, financial, investment or operational
      transparency, or otherwise as a result of the inclusion of the Toshiba
      Capacity in the Y3 Facility and the Y4
Facility.

              


      

       

      
        	
                (ii)  

              	
                For
      the Toshiba Capacity in the Y3 and Y4 Facility, Toshiba will provide to
      the applicable Joint Venture [***]*,
      including but not limited to [***]*.  Notwithstanding
      the foregoing, Toshiba shall have sole discretion over the use and
      disposition of the equipment representing the Toshiba Capacity, provided
      [***]*.

              


      

       

      
        	
                (b)  

              	
                Improvements Not
      Related to Expansion.  To the extent practical and
      commercially feasible, each of the Parties shall use commercially
      reasonable efforts to enhance the [***]* of the
      Y3 and Y4 Facilities.

              


      

       

      
        	
                (c)  

              	
                Incentives. All
      governmental incentives (financial or otherwise) received with respect to
      the Y4 Facility (including any Toshiba Capacity) shall be disclosed and
      the Parties will discuss such incentives and the sharing thereof based on
      the type of incentives.

              


      

       

      
        	
                5.2  

              	
                Expansion and
      Transition of Capacity.

              


      

       

      
        	
                (a)  

              	
                General Rule;
      [***]*
      Expansion.  Except as provided in this Section, the terms
      of Section 6.3(c)(iv) of the FP Master Agreement and Section 6.5(c)(iv) of
      the FA Master Agreement will apply to [***]* within
      FP, FA and other facilities.
      [***]*.

              


      

       

      
        	
                (b)  

              	
                Technology
      Transitions.  The Joint Ventures shall be given priority
      for any technology transition.  Should either FP or FA not
      accept any proposal for a NAND technology transition, the non-rejecting
      Party (as between SanDisk and Toshiba) shall be able to implement such
      technology transition on its capacity and [***]*.  Subject
      to the foregoing priority granted to the Joint Ventures, nothing in this
      Agreement shall in any way limit Toshiba’s ability to implement NAND
      technology transitions within the Toshiba Capacity, which shall be made in
      Toshiba’s sole discretion.

              


      

       

      
        	
                5.3  

              	
                Effect on [***]*; Priority;
      Proprietary Products.

              


      

       

      
        	
                (a)  

              	
                [***]*.

              


      

       

      

        

      

        
        * 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.

         

      


      
        
           


        

        
          7

          
            

          

        

        
           


        

      


      
        	
                (b)  

              	
                Priority.

              


      

       

      
        	
                (i)  

              	
                Section
      6.4(a)(ii) of the FP Master Agreement and Section 6.6(a)(ii) of the FA
      Master Agreement are each hereby amended such that each of Sub-section
      6.4(a)(ii)(B) in the FP Master Agreement and Sub-section 6.6(a)(ii)(C) in
      the FA Master Agreement shall be replaced
with

              


      

       

      [***]*.

       

      
        	
                (ii)  

              	
                Section 6.4(a)(i)
      of the FP Master Agreement and Section 6.6(a)(i) of the FA Master
      Agreement are each hereby amended such that each of
      Sub-section 6.4(a)(i)(C) in the FP Master Agreement and
      Sub-section 6.6(a)(i)(D) in the FA Master Agreement shall be replaced
      with

              


      

       

      [***]*.

       

      
        	
                (c)  

              	
                Proprietary
      Products.  [***]*.

              


      

       

      
        	
                5.4  

              	
                Effect on
      Costs.

              


      

       

      
        	
                (a)  

              	
                [***]* Manufacturing
      Costs.  All costs of manufacturing shall be [***]*.

              


      

       

      
        	
                (i)  

              	
                [***]*.

              


      

       

      
        	
                (ii)  

              	
                [***]*.

              


      

       

      
        	
                (b)  

              	
                [***]*.

              


      

       

      
        	
                (c)  

              	
                The
      Joint Ventures shall not be responsible or invoiced for [***]*.  Any
      other [***]* shall
      be subject to mutual good faith discussion and agreement regarding the
      terms by which [***]* shall
      be borne by the applicable Joint
Venture.

              


      

       

      
        	
                (d)  

              	
                Cost
      benefits associated with [***]* will
      be discussed by the Parties [***]* and
      mutually agreed by the Parties.

              


      

       

      
        	
                5.5  

              	
                [***]*.

              


      

       

      
        	
                (a)  

              	
                For
      [***]*
      for the Y3 or Y4 Facility that are owned by the applicable Joint Venture
      as of the date hereof, [***]*,
      within [***]* of
      each Closing under the Equipment Purchase Agreement, [***]*.

              


      

       

      
        	
                (b)  

              	
                For
      [***]*
      for the Y3 or Y4 Facility that will be [***]*, the
      Parties agree that:

              


      

       

      
        	
                (i)  

              	
                For
      such [***]*
      related to [***]*;
      and

              


      

       

      
        	
                (ii)  

              	
                Each
      Party (as between Toshiba and SanDisk) shall be solely responsible for the
      purchase of [***]*.

              


      

       

      

        

      

        
        * 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.

         

      


      
        
           


        

        
          8

          
            

          

        

        
           


        

      


      
        	
                5.6  

              	
                [***]*.

              


      

       

      
        	
                (a)  

              	
                On
      [***]*,
      Toshiba shall sell to the applicable Joint Venture, and such Joint Venture
      shall purchase from Toshiba, the portion of the then existing [***]*.  Payment
      for such [***]* shall
      be made by SanDisk and Toshiba to the applicable Joint Ventures, pursuant
      to invoices from the Joint Ventures, no later than [***]*, and
      the Joint Ventures [***]*.

              


      

       

      
        	
                (b)  

              	
                [***]*, shall
      sell to each of the Joint Ventures, and each of the Joint Ventures shall
      purchase [***]* and
      [***]*
      allocable to such Joint Venture [***]*.  Payment
      for such [***]* shall be made by
      SanDisk and Toshiba to the applicable Joint Venture, pursuant to a payment
      mechanism and schedule to be agreed between the Parties, provided that
      payment shall occur [***]*.

              


      

       

      6. [***]*.

       

      7. Foundry
and Conversion Options; Additional Capacity Transfer

       

      
        	
                7.1  

              	
                Foundry
      Option.  Toshiba and SanDisk shall enter into the Foundry
      Agreement which shall
      provide for a foundry arrangement between the Parties until [***]*.

              


      

       

      
        	
                7.2  

              	
                Conversion
      Option.

              


      

       

      
        	
                (a)  

              	
                [***]*.

              


      

       

      
        	
                (b)  

              	
                [***]*.

              


      

       

      
        	
                (c)  

              	
                [***]*.

              


      

       

      
        	
                7.3  

              	
                [***]*.

              


      

       

      8. Representations
and Warranties of Each of the Parties

       

      Each
Party, severally and not jointly, represents and warrants to each other Party
that the following are true and correct as of the date hereof:

       

      
        	
                8.1  

              	
                Organization and
      Standing.  It is duly organized and validly existing and,
      where applicable, in good standing under the laws of the jurisdiction in
      which it is organized.

              


      

       

      
        	
                8.2  

              	
                Authority;
      Enforceability.  It has the requisite corporate or
      equivalent power and authority to enter into this Agreement, to execute
      any certificates or other instruments to be executed by it in connection
      with the Transactions, and otherwise carry out the
      Transactions.  All corporate or equivalent proceedings required
      to be taken by it to authorize the execution, delivery and performance of
      this Agreement, and any such certificates and instruments, and the
      consummation of the Transactions, have been or will be as of the Closing
      properly taken.  This Agreement has been duly and validly
      executed and delivered by it and constitutes a valid and binding
      obligation of it, enforceable against it in accordance with its
      terms.

              


      

       

      

        

      

        
        * 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.

         

      


      
        
           


        

        
          9

          
            

          

        

        
           


        

      


       

      
        	
                8.3  

              	
                No
      Conflict.  The execution, delivery and performance of
      this Agreement by it do not and will not (a) breach, violate or
      conflict with any provision of its charter documents as amended to date,
      (b) conflict with or violate any law, rule, regulation, order, writ,
      judgment, injunction, decree, determination or award applicable to it, or
      (c) result in the creation or imposition of any Lien (other than as
      may result from the actions contemplated by the Equipment Purchase
      Agreement)on any of the Purchased Assets.  No consent, approval
      or authorization of, or filing with, any Governmental Authority, or any
      other Person, is required to be made or obtained by it in connection with
      the execution, delivery and performance by it of this Agreement and the
      consummation by it of the Transactions.  The term “Lien” as used
      in this Agreement means any lien, pledge, hypothecation, security
      interest, claim, lease, charge, option, right of first refusal, transfer
      restriction, encumbrance or any other restriction or limitation
      whatsoever.  The term “Person” as used
      in this Agreement means any individual, corporation, partnership, limited
      liability company, firm, joint venture, association, joint-stock company,
      trust, unincorporated organization, Governmental Authority or other
      entity.  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.

              


      

       

      
        	
                8.4  

              	
                Brokers’ or Finders’
      Fees.  It has not incurred and will not incur, directly
      or indirectly, any liability for brokerage or finders’ fees or agents’
      commissions or any similar charges in connection with this Agreement or
      any certificates and instruments executed or contemplated to be executed
      by the Parties.  It has not taken any action or entered into any
      agreement or understanding that will cause any other Party to incur any of
      the foregoing liabilities.

              


      

       

      
        	
                8.5  

              	
                Litigation.  There
      is no Action pending, or, to its knowledge, threatened, or directly
      relating to the Transactions and which, if successful, would materially
      impair such Party’s ability to consummate the
      Transactions.  There is no judgment, order, writ or decree that
      substantially restrains its ability to consummate the
      Transactions.

              


      

       

      9. Additional
Matters

       

      
        	
                9.1  

              	
                [***]*.

              


      

       

      
        	
                9.2  

              	
                Insurance.  Toshiba
      shall continue to maintain insurance policies as contemplated under
      Section 7.5(d) of the FP Master Agreement and Section 7.5(d) of
      the FA Master Agreement covering the entire business of the Joint Ventures
      and the Toshiba Capacity, provided that [***]*.

              


      

       

      

        

      

        
        * 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.

         

      


      
        
           


        

        
          10

          
            

          

        

        
           


        

      


      
        	
                9.3  

              	
                Environmental
      Liabilities.  The Environmental Indemnification
      Agreements with respect to FA and FP in effect shall continue in effect
      without amendment, except that, beginning on the earlier of [***]* (i)
      Toshiba shall be responsible for its share of liability for Environmental
      Costs (as defined in the Environmental Indemnification Agreements) [***]* FA
      and/or FP, as applicable, at the time of the contamination or release, if
      determinable, and (ii) if the time of such contamination or release is not
      determinable, the liability for Environmental Costs shall be allocated
      [***]*
      of NAND Flash production through the time of discovery of such
      contamination or release.

              


      

       

      
        	
                9.4  

              	
                Further Assurances;
      Cooperation. Each
      of the Parties shall from time to time, at the reasonable request of the
      other Parties, and without further consideration (unless otherwise
      provided for under this Agreement), execute and deliver such instruments,
      cooperate and take such actions (as a member of the FP and FA joint
      ventures or otherwise) as may be reasonably necessary to effectuate the
      Transactions.

              


      

       

      10. Miscellaneous

       

      
        	
                10.1  

              	
                Entire
      Agreement.  This Agreement, together with the exhibits,
      schedules, appendices and attachments hereto, the Joint Venture Agreements
      (as and if amended hereby) and the other Transaction Agreements constitute
      the entire agreement of the Parties to this Agreement with respect to the
      subject matter hereof and supersede all prior written and oral agreements
      and understandings with respect to such subject
  matter.

              


      

       

      
        	
                10.2  

              	
                Precedence. The terms and
      provisions of this Agreement are binding on the Parties.  To the
      extent that a provision in this Agreement or another Transaction
      Agreement expressly
      conflicts with a Joint Venture Agreement, then the provisions of this
      Agreement shall control; provided however, that unless otherwise provided
      herein, the provisions of the Joint Venture Agreements remain in
      effect.

              


      

       

      
        	
                10.3  

              	
                Governing
      Law.  This Agreement shall in all respects be governed by
      and construed in accordance with the internal laws of the State of
      California applicable to agreements made and to be performed entirely
      within such state without regard to the conflict of laws principles of
      such state.

              


      

       

      
        	
                10.4  

              	
                Remedies; Rules of
      Construction and Documentary Convention.  The Parties
      agree that the Rules of Construction and Documentary Convention set forth
      in each of the Joint Venture Agreements shall apply in the event that a
      dispute arises out of or relates to this Agreement or a particular Joint
      Venture Agreement.

              


      

       

      


       

      [Remainder of page
intentionally left blank.]

       

      

        

      

        
        * 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.

         

      


      
        
           


        

        
          11

          
            

          

        

        
           


        

      


      IN
WITNESS WHEREOF, this Agreement is executed as of the date first written
above.

       

      


       

      
        	
                “FP”

                FLASH
      PARTNERS LIMITED

                By
      ________________________________

                Name
      ______________________________

                Title
      _______________________________

                 

              	
                “FA”

                FLASH
      ALLIANCE LIMITED

                By
      ________________________________

                Name
      ______________________________

                Title
      _______________________________

              
	
                “TOSHIBA”

                TOSHIBA
      CORPORATION

                By
      ________________________________

                Name
      ______________________________

                Title
      _______________________________

                 

              	
                “SANDISK
      CORPORATION”

                SANDISK
      CORPORATION

                By
      ________________________________

                Name
      ______________________________

                Title
      _______________________________

              
	
                “SANDISK
      CAYMAN”

                SANDISK
      (CAYMAN) LIMITED

                By
      ________________________________

                Name
      ______________________________

                Title
      _______________________________

              	
                “SANDISK
      IRELAND”

                SANDISK
      (IRELAND) LIMITED

                By
      ________________________________

                Name
      ______________________________

                Title
      _______________________________

              


      

      


       


      
        
           


        

        
          12

          
            

          

        

        
           


        

      


       Schedule
4.1(a)

       

      [***]*

       

      


       

      

        

      

        
        * 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.

         

      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Schedule
4.1(b)(i)

       

      [***]*

       

      

        

      

        
        * 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.

         

      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


       

      Schedule
4.1(b)(ii)

       

      [***]*

       

       

      
        

      

        
        * 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.

         

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Schedule
5.4(a)(i)

       

      [***]*

       

      

        

      

        
        * 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.

         

      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Schedule
5.4(a)(ii)

       

      [***]*

       

      

        

      

        
        * 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.

         

      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Schedule
5.4(b)-1

       

      [***]*

       

      

        

      

        
        * 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.

         

      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Schedule
5.4(b)-2

       

      [***]*

       

      

        

      

        
        * 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.