Document:

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                                                                    EXHIBIT 10.1

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                         FLASH PARTNERS MASTER AGREEMENT

                         Dated as of September 10, 2004

                                  by and among

                              TOSHIBA CORPORATION,

                               SANDISK CORPORATION

                                       and

                          SANDISK INTERNATIONAL LIMITED

================================================================================

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.

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                                Table of Contents

<TABLE>
<CAPTION>
                                                                                 Page
                                                                                 ----
<S>                                                                              <C>
1.  Definitions and Interpretation..............................................   2

2.  Closing and Post-Closing Transactions.......................................   4

3.  Purpose of Flash Partners...................................................   7

4.  Representations and Warranties of the Parties...............................   7

5.  Covenants...................................................................  11

6.  Covenants concerning NAND Flash Memory Products Business....................  12

7.  Other Agreements............................................................  25

8.  Termination.................................................................  28

9.  Miscellaneous...............................................................  33
</TABLE>

            This FLASH PARTNERS MASTER AGREEMENT, dated as of September 10,
2004, 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"), and SANDISK INTERNATIONAL LIMITED, a
company organized under the laws of the Cayman Islands ("SanDisk International",
and collectively with SanDisk Corporation, "SanDisk," and SanDisk together with
Toshiba, the "Parties").

            WHEREAS, pursuant to that certain New Master Agreement between
SanDisk Corporation and Toshiba, dated as of April 10, 2002, as amended by that
certain Amendment to New Master Agreement between the Parties dated as of August
13, 2002 (the "FVC Japan Master Agreement"), and the agreements referenced
therein, the Parties have had a collaboration for development and manufacture of
FVC Japan NAND Flash Memory Products (as hereinafter defined);

            WHEREAS, the Parties desire to extend their collaboration to
encompass additional joint development and manufacture of Y3 NAND Flash Memory
Products (as hereinafter defined) to be produced at the wafer fabrication
facility known as "Y3"; and

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            WHEREAS, in order to realize these goals, the Parties desire to
consummate or cause to be consummated the transactions described in this
Agreement, and any other transactions which the Parties may from time to time
consider necessary or appropriate to carry out the intent of the Parties as
expressed herein.

            NOW, THEREFORE, the Parties agree as follows:

1. DEFINITIONS AND INTERPRETATION.

1.1 Certain Definitions.

(a)   Capitalized terms used but not defined in this Agreement shall have the
      respective meanings assigned to them in Appendix A (Definitions, Rules of
      Construction and General Terms and Conditions).

(b)   As used herein, the term "Agreement" means this Flash Partners Master
      Agreement together with any Exhibits, Schedules, Appendices and
      Attachments hereto.

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

<TABLE>
<CAPTION>
        TERM                                                       DEFINED IN
        ----                                                       ----------
<S>                                                             <C>
Acquiring Party                                                 Section 8.1(d)
Alternative Use                                                 Section 6.3(c)(i)
Amendment No. 3 to Patent Cross License Agreement               Section 2.1(c)(iii)
Appointing Party                                                Section 6.7(b)(i)
[***]                                                           Section 6.3(c)(ii)(B)
Closing                                                         Section 2.1(a)
Committee Representatives                                       Section 6.7(b)(i)
Common R&D Agreement                                            Section 2.1(c)(i)
Common R&D Development Expenses                                 Section 6.6(a)(i)
Costs                                                           Section 6.3(c)(i)
Cross License Agreement                                         Section 2.1(c)(iii)
Defaulting Party                                                Section 6.10(d)
Excess Capacity Party/EC Party                                  Section 6.5(b)(i)
Embedded NAND Product                                           Section 6.5(c)(ii)
Employer                                                        Section 6.8(g)
Environmental Indemnification Agreement                         Section 2.1(b)(vii)
Equipment                                                       Section 6.3(c)(i)
Evaluation Wafers                                               Section 6.6(a)(iii)
Financing                                                       Section 6.10(b)(iii)
Flash Partners                                                  Section 2.1(b)
</TABLE>

[***] 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.

                                       2
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<TABLE>
<CAPTION>
        TERM                                                       DEFINED IN
        ----                                                       ----------
<S>                                                             <C>
FP Foundry Agreement                                            Section 2.1(b)(iv)
FP Operating Agreement                                          Section 2.1(b)(ii)
FP Operative Documents                                          Section 2.1(b)
FP Patent Indemnification Agreement                             Section 2.1(b)(vi)
FP Secondees                                                    Section 6.8
FP Termination Date                                             Section 8.1(b)
FP Units                                                        Section 4.2(a)
FVC Japan Master Agreement                                      Recitals
FVC Japan Operative Documents                                   Section 2.3
FVC Japan NAND Flash Memory Products                            Section 3.3(a)
Ics                                                             Section 3.2
Intellectual Property                                           Section 4.7
Investing Party                                                 Section 6.3(c)(i)
Joint Operative Documents                                       Section 2.1(c)
Lease Agreement                                                 Section 2.1(b)(viii)
Management Committee                                            Section 6.7
Minimum RUP Commitment                                          Section 6.3(c)(i)
Master Operative Documents                                      Section 2.2
NAND Flash Memory Integrated Circuits                           Section 6.11
NAND Flash Memory Products                                      Section 3.2
NAND Process Technology                                         Section 6.1(a)
Non-Defaulting Party                                            Section 6.10(d)
Non-Investing Party                                             Section 6.3(c)(i)
Non-Originating Party                                           Section 6.5(e)
Originating Party                                               Section 6.5(e)
Parties                                                         Heading
Product Development Agreement                                   Section 2.1(c)(ii)
Proprietary NAND Flash Memory Products                          Section 6.5(d)
Purchase and Supply Agreements                                  Section 2.1(b)(v)
Qualification Wafers                                            Section 6.6(a)(iv)
Ramp-Up Plan                                                    Section 6.3(b)
Requesting Party                                                Section 8.1(d)(i)
[***]                                                           Section 6.3(c)(ii)
[***]                                                           Section 6.3(c)(ii)
SanDisk                                                         Heading
SanDisk Corporation                                             Heading
SanDisk Financing                                               Section 6.10(b)(iii)
SanDisk International                                           Heading
</TABLE>

[***] 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.

                                       3
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<TABLE>
<CAPTION>
        TERM                                                       DEFINED IN
        ----                                                       ----------
<S>                                                             <C>
SanDisk Purchase and Supply Agreement                           Section 2.1(b)(v)
SanDisk Termination Capacity                                    Section 8.1(e)(i)
Selling Party                                                   Section 8.1(d)
Start-Up Costs                                                  Section 6.2
Termination Capacity                                            Section 8.1(d)(i)
Third Party Sale                                                Section 6.3(c)(i)
Toshiba                                                         Heading
Toshiba Financing                                               Section 6.10(b)(iii)
Toshiba Foundry NAND Flash Memory Products                      Section 3.3(a)
Toshiba Purchase and Supply Agreement                           Section 2.1(b)(v)
Toshiba-SanDisk Services Agreement                              Section 2.1(c)(iii)
[***]                                                           Section 6.3(c)(ii)(A)
Unit Purchase Agreement                                         Section 2.1(b)(i)
Y3 Direct R&D Development Products                              Section 6.6(a)(ii)
Y3 Facility                                                     Section 3.1
Y3 Facility Target Capacity                                     Section 7.3(b)
Y3 NAND Flash Memory Products                                   Section 3.3(a)
[***]                                                           Section 7.4(c)(i)
</TABLE>

1.3   Rules of Construction and Documentary Conventions. The rules of
      construction and documentary conventions and general terms and conditions
      set forth in Appendix A shall apply to this Agreement.

1.4   Precedence. The terms and provisions of this Agreement are binding on the
      Parties; provided, however, that to the extent that a description in this
      Agreement of another agreement (whether an Operative Document or
      otherwise) conflicts with or differs from the provisions of that
      agreement, then the provisions of that agreement shall control as to such
      conflict or difference.

2.    CLOSING AND POST-CLOSING TRANSACTIONS

2.1   Closing Transactions.

(a)   Closing. The Parties shall effect the transactions set forth in this
      Section 2.1, all of which shall be considered to occur on the date hereof
      unless otherwise stipulated (the effecting of such transactions,
      collectively, the "Closing").

(b)   Flash Partners Documents. Unless otherwise indicated in this Section
      2.1(c), as of the Closing Date, the Parties shall enter into or cause to
      be entered into or otherwise become effective the following agreements and
      documents (collectively with this Agreement, the "FP Operative Documents")
      to apply to their joint development, manufacture and selling of Y3 NAND
      Flash Memory Products by

[***] 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.

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      and through Flash Partners, Ltd., a Japanese yugen kaisha ("Flash
      Partners") (the description of each document below is for reference only
      and shall not be used in interpreting any such document):

      (i)    a Unit Purchase Agreement between Toshiba and SanDisk
             International, dated as of the date hereof, in the form of Exhibit
             A1 (the "Unit Purchase Agreement"), and which concerns the sale by
             Toshiba and purchase by SanDisk International at the Closing of
             49.9% of the FP Units;

      (ii)   an Operating Agreement between Toshiba and SanDisk International,
             dated as of the date hereof, in the form of Exhibit A2 (the "FP
             Operating Agreement"), and which concerns governance of Flash
             Partners;

      (iii)  Articles of Incorporation of Flash Partners in the form of Exhibit
             A to the FP Operating Agreement;

      (iv)   a Foundry Agreement, dated as of the date hereof, between Flash
             Partners and Toshiba in the form of Exhibit A3 (the "FP Foundry
             Agreement");

      (v)    a Purchase and Supply Agreement, dated as of the date hereof, by
             and between Flash Partners and SanDisk International in the form of
             Exhibit A4-1 (the "SanDisk Purchase and Supply Agreement") and a
             Purchase and Supply Agreement, dated as of the date hereof, between
             Flash Partners and Toshiba in the form of Exhibit A4-2 (the
             "Toshiba Purchase and Supply Agreement" and together with the
             SanDisk Purchase and Supply Agreement, the "Purchase and Supply
             Agreements"), and which concern the forecasting and purchase
             commitments by SanDisk and Toshiba, respectively, of Y3 NAND Flash
             Memory Products;

      (vi)   a Patent Indemnification Agreement between SanDisk Corporation and
             Toshiba, dated as of the date hereof, in the form of Exhibit A5
             (the "FP Patent Indemnification Agreement"), and which concerns
             patent indemnification obligations of Toshiba in favor of SanDisk
             and certain contribution obligations of SanDisk with respect to Y3
             NAND Flash Memory Products;

      (vii)  a Mutual Contribution and Environmental Indemnification Agreement
             between SanDisk Corporation and Toshiba, dated as of the date
             hereof, in the form of Exhibit A6 (the "Environmental
             Indemnification Agreement"), and which concerns indemnification
             obligations of the Parties in favor of one another with respect to
             Flash Partners and the Yokkaichi Facility; and

      (viii) a Lease Agreement between Flash Partners and Toshiba, as owner of
             the Yokkaichi Facility, dated as of the date hereof, in the form of
             Exhibit A7 (the "Lease Agreement"), and which concerns the leasing
             of Flash Partners' equipment to Toshiba as owner of the Yokkaichi
             Facility.

(c)   Joint Operative Documents. The Parties acknowledge and agree that the
      following agreements shall remain in force or be amended or executed as
      indicated below

                                       5
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      and shall apply generally to the Parties' collaboration with respect to
      NAND Flash Memory Products and related products (collectively, the "Joint
      Operative Documents"):

      (i)   the Amended and Restated Common R&D and Participation Agreement,
            dated as of the date hereof, between SanDisk Corporation and Toshiba
            (the "Common R&D Agreement"), a copy of which is Exhibit B1 and
            which concerns collaboration between the Parties with respect to
            research and development activities;

      (ii)  the Amended and Restated Product Development Agreement, dated as of
            the date hereof, between the SanDisk Corporation and Toshiba (the
            "Product Development Agreement"), a copy of which is Exhibit B2 and
            which concerns collaboration between the Parties with respect to
            product development activities;

      (iii) an Amendment No. 3 to Patent Cross License Agreement, dated as of
            the date hereof, between SanDisk Corporation and Toshiba (the
            "Amendment No. 3 to Patent Cross License Agreement"), a copy of
            which is Exhibit B3, amending that certain Patent Cross License
            Agreement between SanDisk Corporation and Toshiba, dated as of July
            30, 1997 (as amended by Amendment No. 1 to Patent Cross License
            Agreement, dated as of May 9, 2000, and Amendment No. 2 to Patent
            Cross License Agreement, dated as of April 10, 2002, the "Cross
            License Agreement"), and which concerns certain patent licenses
            granted by SanDisk Corporation and Toshiba to one another; and an
            Amendment No. 1 to Services Agreement, dated as of the date hereof,
            between SanDisk Corporation and Toshiba ("Toshiba-SanDisk Services
            Agreement"), a copy of which is Exhibit B4, amending that certain
            Toshiba-SanDisk Services Agreement, dated as of July 1, 2002, which
            concerns Toshiba's provision of certain services to SanDisk and
            SanDisk's payment to Toshiba for such services.

2.2   Further Assurances. Following the Closing, each Party shall, and shall
      cause its Affiliates and Flash Partners to, take all reasonable actions
      necessary or appropriate to effectuate the transactions contemplated by
      this Agreement, the FP Operative Documents and the Joint Operative
      Documents (collectively, the "Master Operative Documents"), and to obtain
      (and cooperate with the other Party in obtaining) any Governmental Action
      or third party consent required to be obtained or made by it in connection
      with any of the transactions contemplated by the Master Operative
      Documents; provided, that no Burdensome Condition shall be made to exist
      with respect to such Party or any of its Affiliates in connection
      therewith.

2.3   Continuation of FVC Japan Documents. The Parties agree that unless
      otherwise expressly stated herein (A) the FVC Japan Operative Documents
      shall not affect the interpretation of this Agreement or the governance or
      operation of Flash Partners or the Y3 Facility and (B) the FP Operative
      Documents shall not affect the interpretation of the FVC Japan Master
      Agreement or the governance operation of FVC Japan or the FVC Japan
      Equipment. The Parties further

                                       6
<PAGE>

      acknowledge that their agreement concerning the relationship between the
      FVC Japan Operative Documents and FP Operative Documents is stated in a
      letter agreement between Toshiba and SanDisk, dated as of the date hereof
      (which is not itself either an FVC Japan Operative Document or FP
      Operative Document).

3.    PURPOSE OF FLASH PARTNERS

3.1   Purpose. The Parties acknowledge and agree that the purpose of the Master
      Operative Documents and Flash Partners is the manufacture, including by
      subcontract to Toshiba pursuant to the FP Foundry Agreement, and sale to
      the Parties of NAND Flash Memory Products manufactured at the facility of
      the Flash Partners known by the Parties as "Y3" (the "Y3 Facility"), which
      is a part of the Yokkaichi Facility (defined in Appendix A).

3.2   NAND Flash Memory Products. "NAND Flash Memory Products" are NAND (both
      binary and MLC Flash Memory) Flash Memory Integrated Circuits ("ICs"),
      excluding any products with process design rules generally greater than
      .25 microns. Embedded IC's incorporating NAND Flash Memory Products shall
      be considered to constitute "NAND Flash Memory Products" if the main
      function and value of such IC is flash memory, but shall not be considered
      to constitute "NAND Flash Memory Products" if the main function and value
      of such IC is logic. For the purpose of the foregoing, the "main function
      and value" of any product shall be considered to be flash memory if (x)
      the total NAND flash memory array area is greater than [***] of the total
      die area or (y) the product is a cut-down or derivative of a standard NAND
      Flash Memory Product.

3.3   Products.

(a)   NAND Flash Memory Products manufactured at the Y3 Facility are referred to
      as "Y3 NAND Flash Memory Products," NAND Flash Memory Products
      manufactured for FVC Japan using the FVC Japan Equipment are referred to
      as "FVC Japan NAND Flash Memory Products" and NAND Flash Memory Products
      manufactured at the Toshiba Foundry Facility (defined in Appendix A) are
      referred to as "Toshiba Foundry NAND Flash Memory Products".

(b)   Each Party shall be permitted to market and sell all NAND Flash Memory
      Products to any third party in any form, including chips, packaged
      devices, wafers, die and cards.

4.    REPRESENTATIONS AND WARRANTIES OF THE PARTIES

      Except as may be disclosed in disclosure schedules attached to this
      Agreement, each Party represents and warrants to the other Party, as of
      the Closing, as follows:

4.1   Organization, Ownership Interest, etc.

(a)   It and each of its Affiliates that is a party to any Master Operative
      Document is duly organized, validly existing and in good standing under
      the laws of its

[***] 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.

                                       7
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      jurisdiction of organization or incorporation and has the power and
      authority to carry on its business as conducted on the date hereof, to own
      or hold under lease its properties and to enter into and perform its
      obligations under each Master Operative Document to which it is a party.

(b)   It and each of its Affiliates that is a party to any Master Operative
      Document is duly qualified to own or lease its properties and generally to
      conduct its business as currently, or proposed under the Master Operative
      Documents to be, conducted in each jurisdiction necessary for purposes of
      the transactions contemplated by the Master Operative Documents, except
      where failure to so qualify would not have a material adverse effect on
      either Party or Flash Partners.

4.2   Authorization; No Conflict.

(a)   It and each of its Affiliates has duly authorized by all necessary action
      (i) the execution, delivery and performance of each Master Operative
      Document to which it or any of its Affiliates is a party and (ii) the
      exercise of its rights as a holder of units (shusshi mochibun) of Flash
      Partners (the "FP Units") to approve the execution, delivery and
      performance by Flash Partners of each Master Operative Document to which
      it is a party and for which the approval of the holders of FP Units is
      required.

(b)   Its and each of its Affiliates' execution and delivery of each Master
      Operative Document to which it is a party, its and each of its Affiliates'
      consummation of the transactions contemplated thereby and its and each of
      its Affiliates' compliance therewith does not and will not (i) require any
      approval of its or any of such Affiliates' stockholders or any approval or
      consent of any trustee or holder of any of its or any of such Affiliates'
      Indebtedness or obligations, (ii) contravene any Governmental Rule
      applicable to or binding on it or any of such Affiliates or any of its or
      their properties if such contravention would have a material adverse
      effect on it or any of such Affiliates or on its or their ability to
      perform any of its or any of such Affiliates' obligations under any Master
      Operative Document, (iii) contravene or result in any breach of, or
      constitute any default, with or without the passage of time, the giving of
      notice or both, under its charter or by-laws, or contravene or result in
      any breach of or constitute any default under, or result in the creation
      of any Lien (other than Permitted Liens) upon any of its or any of such
      Affiliates property or the property of Flash Partners under, any material
      indenture, mortgage, chattel mortgage, deed of trust, conditional sales
      contract, loan or credit agreement, non-compete agreement, license
      agreement, partnership or joint venture agreement or other material
      agreement or document to which it or any of such Affiliates is a party or
      by which it or any of such Affiliates or any of its or their properties is
      or is intended to be bound or by which Flash Partners or any of its
      properties is or is intended to be bound, (iv) require any negotiation
      with, or notice to, any labor union or violate, or require any procedure
      to be followed under, any collective bargaining or other agreement with
      employees or (v) require any Governmental Action (other than immaterial
      Governmental Actions such as routine qualifications to do business
      intended to be obtained as needed or Governmental Actions needed in
      connection

                                       8
<PAGE>

      with the construction and operation of the Y3 Facility), except, in each
      case described in clauses (i) through (v) above, such as have been duly
      obtained, made, taken or otherwise accomplished and which are in full
      force and effect. All consents and approvals of any Governmental Authority
      (other than immaterial Governmental Actions such as routine qualifications
      to do business intended to be obtained as needed or Governmental Actions
      needed in connection with the operation of the Y3 Facility) or other third
      Person necessary or advisable for such Party or any of its Affiliates to
      consummate in all material respects the transactions contemplated by the
      Master Operative Documents have been obtained. No Burdensome Condition
      exists with respect to such Party, any of its Affiliates or Flash Partners
      in connection with the transactions contemplated by the Master Operative
      Documents.

4.3   Enforceability.

(a)   It has duly executed and delivered this Agreement and, upon the execution
      and delivery of this Agreement by the other Party, this Agreement will
      constitute its legal, valid and binding obligation, enforceable against it
      in accordance with its terms except as enforceability may be limited by
      bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
      the enforcement of creditors' rights generally or the availability of
      equitable remedies (regardless of whether enforceability is considered in
      a proceeding at law or in equity).

(b)   It and each of its Affiliates have duly executed and delivered each other
      Master Operative Document to which it or any such Affiliate is a party
      and, upon the execution and delivery of each such other Master Operative
      Document by each other party thereto, each such other Master Operative
      Document will constitute its legal, valid and binding obligation,
      enforceable against it or its Affiliates in accordance with its terms
      except as enforceability may be limited by bankruptcy, insolvency,
      fraudulent conveyance or similar laws affecting the enforcement of
      creditors' rights generally or the availability of equitable remedies
      (regardless of whether enforceability is considered in a proceeding at law
      or in equity).

4.4   Proceedings. There are no actions, claims, investigations or proceedings
      pending, or to its knowledge threatened, by or before any Governmental
      Authority that, if adversely determined, would have a material adverse
      effect on it or any of its Affiliates that is a party to any Master
      Operative Document or, on the conduct of the business of Flash Partners
      following the Closing as contemplated in the Master Operative Documents or
      on it or any of its Affiliates' ability to perform any material obligation
      under any Master Operative Document.

4.5   Litigation; Decrees. Except as set forth in Schedule 4.5, there are no
      lawsuits, arbitrations or other legal proceedings pending, or to its
      knowledge threatened, by or against or affecting it or any of its
      Affiliates or any of their respective properties that (i) are reasonably
      likely, based on information known to it as of the date hereof, to have a
      material adverse effect on the conduct of the business of Flash Partners
      following the Closing as contemplated by the Master Operative Documents or
      (ii) relate to any of the transactions contemplated by the Master

                                       9
<PAGE>

      Operative Documents in a manner which is material to it, any of its
      Affiliates' or Flash Partners ability of it to carry out the transactions
      contemplated hereby and in the FP Operative Documents or which could have
      a material adverse effect on the conduct of the business of Flash Partners
      following the Closing as contemplated in the Master Operative Documents.

4.6   Compliance with Other Instruments. Neither it nor any of its Affiliates
      that is a party to any Master Operative Document is in default in any
      material respect in the performance of any material obligation, agreement,
      instrument or undertaking to which it or any of its Affiliates is a party
      or by which it or any of its Affiliates or any of its of their properties
      is bound, and there is no such obligation, agreement, instrument or
      undertaking to which it or any of its Affiliates is a party or by which it
      or any of its Affiliates or any of its or their properties is bound, in
      each case which is reasonably likely to have a material adverse effect on
      the conduct of the business of Flash Partners following the Closing as
      contemplated by the Master Operative Documents.

4.7   Patents and Proprietary Rights. Except as set forth in Schedule 4.7, to
      its knowledge, it owns or possesses sufficient legal rights to all
      patents, utility models, trademarks, service marks, trade names,
      copyrights, applications for any of the foregoing, mask works, software,
      trade secrets, licenses, information and proprietary rights and processes
      (collectively, "Intellectual Property") necessary (i) to carry out its or
      any of its Affiliates' obligations under the Master Operative Documents
      and (ii) for the conduct of the business of Flash Partners following the
      Closing as contemplated in the Master Operative Documents, without any
      conflict with or infringement of the rights of others, except as will not
      have a material adverse effect on either (i) or (ii) above. Except with
      respect to items referenced in Schedule 4.7, it has not received any
      communications alleging that its Intellectual Property violates, or by its
      or any of its Affiliates entering into the transactions contemplated by
      the Master Operative Documents, would violate the Intellectual Property of
      any other Person or entity, which violation could reasonably be expected
      to have a material adverse effect on either (i) or (ii) above.

4.8   Compliance with Laws. It and each of its Affiliates has complied and is
      complying in all material respects with all laws, statutes, permit
      requirements, licensing requirements, rules and regulations and judicial
      or administrative decisions, except where the failure to so comply would
      not have a material adverse effect on its or any of its Affiliates ability
      to perform its or their obligations hereunder or under any other Master
      Operative Document or on the conduct of the business of Flash Partners
      following the Closing as contemplated by the Master Operative Documents.

4.9   Patent Cross Licenses. Except as set forth on Schedule 4.9, with respect
      to (a) Toshiba, there are no patent cross licenses between it and any
      third party that would require Flash Partners to make any payment pursuant
      to Section 10 of the Cross License Agreement, and (b) SanDisk, there are
      no patent cross licenses between it and any third party that would require
      Flash Partners to make any payment pursuant to Section 8 of the Cross
      License Agreement.

                                       10
<PAGE>

5.    COVENANTS

5.1   Covenants of the Parties. Each Party agrees that, during the term of this
      Agreement:

(a)   Performance of Obligations. It and each of its Affiliates shall fully and
      faithfully carry out (i) all its obligations under each Master Operative
      Document to which it or any Affiliate is a party, and (ii) once agreed,
      each applicable Business Plan (as defined in the FP Operating Agreement).

(b)   Ownership Interest. Except as otherwise expressly permitted by the FP
      Operating Agreement and this Agreement, it shall not Transfer or permit
      any of its Affiliates to Transfer all or any portion of its FP Units (or
      all or any portion of its interest in any Affiliate through which it
      beneficially owns its FP Units), to any Person without the consent of the
      other Party.

5.2   Public Announcements.

(a)   At or following the Closing, neither Party shall, nor shall it permit any
      of its Affiliates to, without the prior written consent of the other
      Party:

      (i)   issue any public release, announcement or other document, or
            otherwise publicly disclose any information or make any public
            statement, concerning the operations of Flash Partners or that
            refers to the other Party or any of its Affiliates in connection
            therewith (other than a general reference to affiliation with Flash
            Partners) that (A) concerns the financial condition or results of
            operations of Flash Partners other than as required by any
            Governmental Rule, Japanese GAAP, Japanese GAAS, US GAAP or US GAAS,
            with respect to the financial disclosure obligations of either Party
            or (B) disparages either Party, or Flash Partners' performance or
            reflects negatively on either Party's commitment to either of Flash
            Partners; or

      (ii)  other than as may be required in connection with filings required to
            be made with Governmental Authorities with respect to the
            transactions contemplated by the FP Operative Documents pursuant to
            the Japanese Foreign Exchange and Foreign Trade Law and related
            regulations, (A) publicly file all or any part of any Master
            Operative Document or any description thereof or (B) issue or
            otherwise make publicly available any press release, announcement or
            other document that contains Confidential Information belonging to
            the other Party (or its Affiliates) or Flash Partners, except as may
            be required by any applicable Governmental Rule, in which case such
            Party shall (or shall cause the Person required to make such filing
            to) cooperate with the other Party, to the extent reasonable and
            practicable, in obtaining any confidential treatment for such filing
            requested by the other Party.

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(b)   Each Party shall use commercially reasonable efforts to grant or deny any
      approval required under this Section 5.2 within five (5) days of receipt
      of written request by the other Party; provided, however, a Party's
      failure to respond within said time period shall not be deemed to
      constitute such Party's approval or consent.

5.3   Expenses. Each Party shall bear its own expenses in connection with the
      negotiation, execution and delivery of the Master Operative Documents.

5.4   Undertaking as to Affiliate Obligations. Each Party shall cause all
      covenants, conditions and agreements to be performed, observed or
      satisfied by each of its Affiliates that is a party to any Master
      Operative Documents to be fully and faithfully observed, performed and
      satisfied by such Affiliate, and shall not cause or permit to exist (i) an
      Event of Default with respect to such Affiliate or (ii) except as
      otherwise permitted by the FP Operating Agreement, any event of
      dissolution of Flash Partners caused by such Affiliate. Nothing in Section
      5.1 or in this Section 5.4 shall be construed to create any right in any
      Person other than the Parties. Without limiting the generality of the
      foregoing, SanDisk hereby guarantees the obligations of SanDisk
      International hereunder and under any Master Operative Document to which
      SanDisk International is a party.

5.5   Continuity and Maintenance of Operations. During the term of this
      Agreement, each Party agrees on behalf of itself and each of its
      Affiliates that is a party to any Master Operative Document to use all
      reasonable efforts consistent with past practice and policies to (i)
      preserve intact in all material respects its and their present business
      operations, (ii) keep available the services of its and their key
      employees as a group, and (iii) preserve its relationships with suppliers,
      licensors, licensees, and others having business relationships with it or
      them, each to the extent necessary to allow it and such Affiliates to
      perform its and their obligations under the Master Operative Documents and
      to allow Flash Partners to conduct its business as contemplated in its
      most recently approved Business Plan.

5.6   Certain Deliveries and Notices. Each Party shall promptly inform in
      writing the other Party of (i) any event or occurrences which could be
      reasonably expected to have a material adverse effect on its or any of its
      Affiliates' ability to perform its or their obligations under any of the
      Master Operative Documents or the ability of Flash Partners to conduct its
      business as contemplated in its most recently approved Business Plan, or
      (ii) any breach or failure to satisfy any condition or covenant contained
      herein or in any other Master Operative Document by such Party or any of
      its Affiliates.

6.    COVENANTS CONCERNING NAND FLASH MEMORY PRODUCTS BUSINESS

6.1   Technology Transfers.

(a)   Toshiba will make available to Flash Partners its 90 nanometer [***]
      process technology applicable to the manufacturing and testing of NAND
      Flash Memory Products ("NAND Process Technology") on the fastest
      practicable

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      schedule. All process integration for new processes will be led by Toshiba
      employees at the Yokkaichi Facility to the extent reasonably possible.
      Toshiba will cause its employees, including its advanced microelectronics
      center

      employees, to cooperate in achieving an efficient transition from
      development module to operating process and volume production. Flash
      Partners will establish a pilot line where (unless impracticable)
      substantially all tests for 300 millimeter NAND technology will be
      conducted.

(b)   Whenever a technology transfer is required hereunder, Toshiba shall
      deliver such level of NAND Process Technology to the Y3 Facility as would
      be normal practice by the Toshiba Semiconductor Company whenever it
      transfers a technology to a new manufacturing facility or transfers a new
      or advanced technology to an existing manufacturing facility in order to
      achieve successful implementation of the newly transferred technology.

(c)   A technology transfer hereunder shall be deemed complete when the
      transferred technology passes a reasonable qualification procedure to be
      mutually agreed upon by the Parties.

(d)   [***]

(e)   [***]

6.2   Start-Up Services for Y3. The Parties acknowledge that either or both of
      the Parties and Flash Partners have incurred or will incur costs in
      connection with developing Flash Partners and the Y3 Facility and
      preparing the Y3 Facility for production, including personnel costs,
      materials costs and other operating expenses, that are properly allocable
      to Flash Partners and for which each Party has the obligation ultimately
      to bear 50% of the responsibility ("Start-Up Costs"). The Parties shall
      discuss in good faith and agree upon the Start-Up Costs, the allocation to
      Flash Partners of Start-Up Costs borne by either Party and the means and
      timing of each Party being reimbursed or credited for having incurred more
      than 50% of the Start-Up Costs or of making payments due to having
      incurred less than 50% of the Start-Up Costs.

6.3   Y3 Facility Ramp-Up Plan.

(a)   Equal Participation and Purchase Price Per Unit. The Parties intend to
      meet demand for increased capacity by equally investing in, and jointly
      building, and sharing, on equal or substantially equal terms, equal
      amounts of new capacity for Y3 NAND Flash Memory Products, except as they
      may otherwise agree as contemplated herein. [***]

(b)   Ramp-Up Plan. The Parties acknowledge that they intend to expand their Y3
      NAND Flash Memory Product manufacturing capacity through development of
      the Y3 Facility according to volumes and timing set forth in Schedule
      6.3(b) (including to [***] L/M, the "Ramp-Up Plan"). The Parties will
      discuss in good

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      faith whether the production capacity of Y3 should be expanded by the
      Parties toward the Y3 Facility's targeted capacity of approximately [***]
      L/M.

(c)   Ramp-Up Plan Commitments and Changes. The Parties agree as follows
      concerning the Ramp-Up Plan:

      (i)   The initial 600 L/M in aggregate increases in production capacity of
            the Y3 Facility identified on the Ramp-Up Plan shall be considered
            firmly committed by each Party (i.e., 300 L/M each) as of the times
            specified in the Ramp-Up Plan and in accordance with this Section
            6.3(c)(i) (the "Minimum RUP Commitment"). The Parties shall agree
            upon one or more Business Plans that provide for implementing the
            Minimum RUP Commitment. [***]

6.4   Capacity.

(a) Priority.

      [***]

(b)   [***]

(c)   Technology Transfer. If the Parties mutually agree to secure external
      manufacturing sources other than the Yokkaichi Facility through joint
      investment, Flash Partners and Toshiba, as applicable, will jointly
      transfer the applicable manufacturing technology and know-how to such
      source. Flash Partners (with respect to 300 millimeter wafers) and FVC
      Japan (with respect to 200 millimeter wafers) will conduct all
      negotiations with the external manufacturing source; provided, however,
      the terms and conditions of any agreement shall be subject to prior
      consultation with and the approval of Toshiba. In connection with any
      technology transfer to such external source, Toshiba will be reimbursed
      its mutually agreed transfer costs for assisting in the transfer of
      manufacturing technology and know-how. If the new capacity secured at such
      external manufacturing source is requested by only one of the Parties,
      such Party will pay the transfer costs and be entitled to purchase the
      full output of NAND Flash Memory Products purchased by FVC Japan or Flash
      Partners, as applicable, from such external manufacturing source. If both
      Parties request such new external capacity, then FVC Japan or Flash
      Partners, as applicable, will pay the transfer costs to Toshiba. Neither
      Party shall have the right to grant manufacturing licenses to such
      external manufacturing source or to disclose or transfer to any such
      external manufacturing source, manufacturing know-how related to the
      manufacture of NAND Flash Memory Products, except through FVC Japan or
      Flash Partners.

6.5   Capacity Sharing Arrangement.

(a)   Equal right to capacity. Subject to Section 6.3(c), each of the Parties
      will have the right and obligation, through Flash Partners, to utilize 50%
      of the wafers produced

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      at the Y3 Facility based on a measure of equivalent lots out per week with
      the equivalency being weighed based on the process complexity factors (as
      calculated by a formula to be mutually determined by the Parties) of the
      Y3 NAND Flash Memory Products.

(b)   Alternative use of allotted capacity.

      (i)   If a Party is unable to utilize its allotted manufacturing capacity
            for Y3 NAND Flash Memory Products (such Party, an "Excess Capacity"
            or "EC Party"), it may do any of the following:

            (A)   An EC Party may request the other Party to negotiate the terms
                  of transfer of its capacity shortfall to the other Party,
                  which may choose whether to accept such additional capacity
                  and on what terms in its sole discretion.

            (B)   An EC Party may use its capacity for Embedded NAND Products,
                  as defined in and subject to Section 6.5(c).

                                       15
<PAGE>

            (C)   An EC Party may use its capacity for Proprietary NAND Flash
                  Memory Products and non-Proprietary NAND Flash Memory
                  Products, in accordance with and subject to Sections 6.5(d)
                  and (e).

            If an EC Party is not able to utilize or transfer its allotted
            capacity pursuant to Section 6.5(b), it shall pay the incremental
            cost increase to the Party not experiencing a shortfall (or pay to
            Flash Partners an under-utilization fee in accordance with a formula
            to be mutually determined by the Parties).

      (ii)  If both Parties are EC Parties because demand for both Parties' Y3
            NAND Flash Memory Products are significantly below expectations, the
            Parties will discuss in good faith whether to permit products which
            are not Y3 NAND Flash Memory Products to be produced at the Y3
            Facility; provided that (A) the inability of the Parties so to agree
            shall not constitute a Deadlock (as defined in the FP Operating
            Agreement) and (B) the foregoing shall not limit either Party's
            rights in the remainder of this Section 6.5.

(c)   Either Party shall have the right use a portion of its total allocated
      capacity with respect to the Y3 Facility to run a memory product which is
      not a Y3 NAND Flash Memory Product (solely because the NAND flash memory
      array area is equal to or less than [***] of the total die area ("Embedded
      NAND Product")) so long as such Embedded NAND Product [***]. If a Party
      exercises its option to run Embedded NAND Products, it must [***]. The
      conditions stated in Sections 6.5(d) and (e) do not apply to Embedded NAND
      Products.

(d)   Each Party may use a portion of its total allocated capacity to cause to
      be manufactured NAND Flash Memory Products which are proprietary to that
      Party ("Proprietary NAND Flash Memory Products") and which need not be
      shared with the other Party. Proprietary NAND Flash Memory Products may be
      produced at the Y3 Facility so long as such products [***]. If a Party
      exercises such option, it must [***]. No such Proprietary NAND Flash
      Memory Products may be run if doing so [***]. Each Party shall give the
      other Party at least ninety (90) days' advance written notice of its
      intention to use a portion of its allocated capacity to manufacture
      Proprietary NAND Flash Memory Products and the Parties shall refer the
      matter to the Board of Directors for consultation and planning, with the
      intention to minimize the impact of such allocation. Such notifying Party
      will limit the output volume of such Proprietary NAND Flash Memory
      Products to [***] of such Party's total allocated output at the Y3
      Facility unless it receives the consent of the other Party to an increase
      in such output volume above such limit.

(e)   Each Party (the "Originating Party") shall inform the other (the
      "Non-Originating Party") of the development plans by the Originating Party
      to develop NAND Flash Memory Products, and the Originating Party and the
      Non-Originating Party shall each refer such matter to the Coordinating
      Committee (as defined in the Product Development Agreement). If the
      Coordinating Committee unanimously decides that such planned development
      shall be undertaken jointly, then the cost

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      of such joint development shall be borne by each Party in accordance with
      the Product Development Agreement, and the NAND Flash Memory Products
      manufactured following such joint development shall be considered
      non-Proprietary NAND Flash Memory Products for purposes of Section 6.5(d);
      provided, however, the NAND Flash Memory Products set forth in Exhibit A
      to the Product Development Agreement shall be deemed to be non-Proprietary
      NAND Flash Memory Products without any action by the Coordinating
      Committee. Subject to the foregoing, if the Coordinating Committee does
      not unanimously decide that such planned development shall be undertaken
      jointly, then the Originating Party may, at its sole discretion, either
      (i) transfer to the Non-Originating Party the technology, including the
      items in Exhibit C to the Product Development Agreement relating to such
      technology, used to manufacture such NAND Flash Memory Products on a
      royalty-free basis, whereupon such NAND Flash Memory Products shall be
      considered non-Proprietary NAND Flash Memory Products, or (ii) treat such
      NAND Flash Memory Products as Proprietary NAND Flash Memory Products for
      purposes of Section 6.5(d). In the event the Originating Party elects to
      treat any NAND Flash Memory Products as Proprietary NAND Flash Memory
      Products in accordance with the preceding sentence, but thereafter the
      Coordinating Committee unanimously determines that such Proprietary NAND
      Flash Memory Products should be developed jointly, the Originating Party
      shall transfer to the other Party the technology used to manufacture such
      NAND Flash Memory Products on reasonable terms and conditions to be
      mutually agreed upon by the Parties, whereupon such Proprietary NAND Flash
      Memory Products shall be treated as non-Proprietary NAND Flash Memory
      Products.

6.6   Engineering Wafers and Development Expense. Each Party will have full
      access to all operational and engineering data and reports related to
      engineering wafers manufactured at Y3.

(a)   Engineering wafers and development expenses are further and more
      completely defined in four categories: Common R&D Development Expenses, Y3
      Direct R&D Development Products, Evaluation Wafers, and Qualification
      Wafers (each as defined below).

      (i)   "Common R&D Development Expenses" means [***]. The Parties agree to
            set up pilot-line(s) [***]. The Parties confirm their intent that
            [***]. Notwithstanding the foregoing, the Parties shall meet from
            time to time [***]. The Parties shall meet at the end of each
            quarter to determine if any engineering activities performed during
            the quarter [***], whether agreed in advance or not [***]. If any
            activities performed [***] are agreed by the parties to [***].

      (ii)  "Y3 Direct R&D Development Products" are those products developed
            [***].

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      (iii) "Evaluation Wafers" are those wafers manufactured [***]. Both
            parties are entitled to receive evaluation wafers [***]. The cost of
            Evaluation Wafers is [***].

      (iv)  "Qualification Wafers" are those wafers [***]. The Parties will
            discuss and agree on the appropriate quantity of Qualification
            Wafers required for each Y3 NAND Flash Memory Product. [***].

(b)   [***].

6.7   Creation of Management Committee. The management committee established by
      the Parties pursuant to the FVC Japan Master Agreement to facilitate
      management of the operations of FVC Japan (the "Management Committee")
      shall do the same for Flash Partners, as detailed in this Section 6.7.

(a)   Authority. The Management Committee shall have the authority to (i) advise
      Flash Partners with respect to policy and operating matters common to
      Toshiba and SanDisk as well as on such other matters as Flash Partners may
      refer to the Management Committee from time to time, (ii) hear and seek to
      resolve any disputes regarding operational matters or alleged breaches of
      any Master Operative Documents (including dispute resolution), and (iii)
      take the actions specified to be taken by the Management Committee in this
      Agreement or any Master Operative Document, including in this Section 6.7
      and in Section 6.1.

(b)   Members of the Management Committee; Voting; etc.

      (i)   The Management Committee shall consist of six members (the
            "Committee Representatives"), three of whom shall be appointed by
            Toshiba, and three of whom shall be appointed by SanDisk (for such
            purpose, each of the Parties is referred to in this Section 6.7 as
            an "Appointing Party"). Each Appointing Party shall be entitled to
            appoint an alternate Committee Representative to serve in the place
            of any Committee Representative appointed by such Appointing Party
            should any such Committee Representative be unable to attend a
            meeting. Each Party shall be entitled to invite a reasonable numbers
            of observers to all Management Committee meetings.

      (ii)  Each Committee Representative or alternate Committee Representative
            shall serve at the pleasure of the designating Appointing Party and
            may be removed as such, with or without cause, and his successor
            designated, by the designating Appointing Party. Each Appointing
            Party shall have the right to designate a replacement Committee
            Representative in the event of any vacancy among such Appointing
            Party's appointees.

      (iii) Each Appointing Party shall bear any cost and expense incurred by
            any Committee Representative or alternate Committee Representative
            designated by such Appointing Party to serve on the Management
            Committee, and no Committee Representative or alternate Committee

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             Representative shall be entitled to compensation from Flash
             Partners for serving in such capacity.

      (iv)   Each Appointing Party shall notify the other Appointing Party and
             Flash Partners in writing of the name, business address and
             business telephone and facsimile numbers of each Committee
             Representative and each alternate Committee Representative that
             such Appointing Party has been appointed to the Management
             Committee. Each Appointing Party shall promptly notify the other
             Appointing Party and Flash Partners of any change in such
             Appointing Party's appointments or of any change in any such
             address or number.

      (v)    For purposes of any approval or action taken by the Management
             Committee, each Committee Representative shall have one vote. All
             of the votes eligible to be cast at any meeting must be voted in
             favor of any action to be taken by the Management Committee at such
             meeting.

      (vi)   At any meeting of the Management Committee, a Committee
             Representative, in the absence of one or more other Committee
             Representatives appointed by the same Appointing Party or an
             alternate Committee Representative, may cast the vote such absent
             Committee Representatives would otherwise be entitled to cast.

      (vii)  The quorum necessary for any meeting of the Management Committee
             shall be those Committee Representatives entitled to cast all of
             the votes held by the members of the Management Committee. A quorum
             shall be deemed not to be present at any meeting for which notice
             was not properly given under Section 6.7(c), unless the Committee
             Representative or Committee Representatives as to whom such notice
             was not properly given attend(s) such meeting without protesting
             the lack of notice or duly execute(s) and deliver(s) a written
             waiver of notice or a written consent to the holding of such
             meeting.

      (viii) Each appointment by an Appointing Party to the Management Committee
             shall remain in effect until the Appointing Party making such
             appointment notifies the other Appointing Party and Flash Partners
             in writing of a change in such appointment. The resignation or
             removal of a Committee Representative shall not invalidate any act
             of such Committee Representative taken before the giving of such
             written notice of the removal or resignation of such Committee
             Representative (or alternate Committee Representative).

(c)   Meetings, Notice, etc.

      (i)   Meetings of the Management Committee shall be held at such location
            or locations as may be selected by the Management Committee from
            time to time.

                                       19
<PAGE>

      (ii)  Regular meetings of the Management Committee shall be held on such
            dates and at such times as shall be determined by the Management
            Committee and shall be held as required or as requested by the Board
            of Directors.

      (iii) Notice of any regular meeting or special meeting pursuant to Section
            6.7(c)(iv) shall be given to each Committee Representative at least
            ten (10) Business Days prior to such meeting in the case of a
            meeting in person or at least five (5) Business Days prior to such
            meeting in the case of a meeting by conference telephone or similar
            communications equipment pursuant to Section 6.7(c)(vi), which
            notice shall state the purpose or purposes for which such meeting is
            being called and include any supporting documentation relating to
            any action to be taken at such meeting.

      (iv)  Special meetings of the Management Committee may be called by any
            Committee Representative by notice given in accordance with the
            notice requirements set forth in this Section 6.7, which notice
            shall state in reasonable detail the purpose or purposes for which
            such meeting is being called; provided, that, the Committee
            Representatives appointed by the Appointing Party that is not
            represented by the Committee Representative calling such special
            meeting shall be entitled to in good faith select a convenient
            location for the meeting and to suggest an alternative time or times
            if the designated time is not convenient for them. Except as set
            forth in Section 6.7(c)(vi), no action may be taken and no business
            may be transacted at such special meeting which is not identified in
            such notice unless (A) such action or business is incidental to the
            action or business for which the special meeting is called or (B)
            such action or business does not materially adversely affect the
            Parties, any of their respective Affiliates which are parties to any
            of the Master Operative Documents or Flash Partners. Minutes of each
            Management Committee meeting shall be sent by facsimile to all
            Committee Representatives within ten (10) Business Days after such
            meeting. Material to be presented at any Management Committee
            meeting shall be sent by facsimile, electronic mail or delivered in
            hard copy to all Committee Representatives together with the notice
            described in Section 6.7(c)(vi).

      (v)   The actions taken by the Management Committee at any meeting,
            however called and noticed, shall be as valid as though taken at a
            meeting duly held after regular call and notice if (but not until),
            either before, at or after the meeting, any Committee Representative
            as to whom such meeting was improperly held duly executes and
            delivers a written waiver of notice or a written consent to the
            holding of such meeting; provided, however, any Committee
            Representative who is present at a meeting and does not protest the
            failure of notice shall be deemed to have received adequate notice
            thereof. A vote of the Management Committee may be taken only either
            in a meeting of the members thereof duly called and held or by the
            execution by the Committee Representatives eligible to cast all

                                       20
<PAGE>

            the votes on the Management Committee without a meeting of a consent
            setting forth the action so taken, and identified as a consent of
            the Committee Representatives pursuant to this Section 6.7.

      (vi)  Upon the consent of all Committee Representatives, a meeting of the
            Management Committee may be held by conference telephone or similar
            communications equipment by means of which all Committee
            Representatives participating in the meeting can hear and be heard
            by all other participants, provided, that, such communications
            equipment continues to be operational throughout the meeting. Any
            Committee Representative may elect to participate in a meeting by
            conference telephone or similar communications equipment upon
            sufficient advance notice to permit arrangements therefor to be
            made. At any meeting, the Management Committee shall consider (A)
            any items added to the Management Committee agenda for discussion by
            the Parties and (B) such other matters as the Management Committee
            decides to review.

      (vii) The Management Committee shall, from time to time, elect one of its
            members to preside at its meetings, which presiding member shall
            alternate annually if requested by either Party. The Management
            Committee may establish reasonable rules and regulations to (A)
            require officers to call meetings and perform other administrative
            duties, (B) limit the number and participation of observers, if any,
            and require them to observe confidentiality obligations and (C)
            otherwise provide for the keeping and distribution of minutes and
            other internal Management Committee governance matters not
            inconsistent with the terms of this Agreement.

6.8   FP Secondees. SanDisk will have the right (after consultation with
      Toshiba) to second employees to Flash Partners ("FP Secondees"), provided
      that the numbers and responsibilities of such FP Secondees will be
      discussed by the Parties in advance of seconding such employees. [***]:

(a)   [***]

(b)   [***]

(c)   [***]

(d)   [***]

(e)   [***]

(f)   [***]

(g)   All FP Secondees will remain employees of SanDisk. Each Party will
      indemnify the other Party and Flash Partners from any claim by any of such
      Party's employees, consultants or agents (such Party being the "Employer")
      (i) based on other than willful misconduct of such Employer, its
      employees, consultants or

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      agents; or (ii) that he or she has rights, or is owed obligations, as an
      employee of the Party that is not the Employer.

6.9   Non-solicitation of Employees. So long as the business of Flash Partners
      continues, each Party (and each of its respective Affiliates) shall not,
      without the prior written consent of the other Party, directly recruit or
      solicit any employee or director of Flash Partners to leave his or her
      employment with Flash Partners prior to the period ending twenty-four (24)
      months after the FP Termination Date; provided, however, that placement of
      employment advertisements or other general solicitation for employees not
      specifically targeted to the employees or directors of Flash Partners
      shall not constitute direct recruitment. In the event of the dissolution
      and liquidation of Flash Partners, either Party (or any Affiliate of
      either Party) may solicit any former employee of such dissolved and
      liquidated company, but neither Party (nor any of its Affiliates) shall be
      required to employ any such Person. If all of the FP Units held by one
      Party are purchased by the other Party or its designee, if requested by
      the acquiring Party the Parties shall reach agreement on a reasonable
      transition plan (without profit to the seller) in connection with the
      services provided to Flash Partners, as applicable, by employees and
      contractors of the selling Party.

6.10  Debt and Lease Financing.

(a)   Each Party shall provide or procure 50% of the financing necessary to
      enable committed or agreed capacity expansions or other investment in the
      Y3 Facility or Flash Partners.

(b)   The Parties currently intend, but are not obligated, to structure the
      financing for equipment purchases by Flash Partners necessary to implement
      the Ramp-Up Plan as follows:

      (i)   Flash Partners will enter into equipment lease or loan agreements
            and pledge the financed equipment as collateral;

      (ii)  Flash Partners will secure external financing for approximately 50%
            of the initial purchase price of its tools and each Party will
            provide equity capital contributions and loans (on a subordinated
            basis) for the remaining cash requirements of Flash Partners
            necessary to execute the Ramp-Up Plan;

      (iii) each Party will severally and not jointly and through separate
            arrangements guarantee as close as possible to 50% of Flash
            Partners' obligations under such lease or loan agreements (any
            financing separately guaranteed or provided by Toshiba for Flash
            Partners or otherwise for investment in the Y3 Facility, "Toshiba
            Financing", any such financing separately guaranteed or provided by
            SanDisk for Flash Partners or otherwise for investment in the Y3
            Facility "SanDisk Financing" and the Toshiba Financing and SanDisk
            Financing, each a "Financing"); and

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<PAGE>

      (iv)  the Parties will attempt to obtain the foregoing financing from the
            same financial institution, but under separate agreements that
            expressly disclaim any joint and several liability of the Parties.

(c)   With respect to any Toshiba Financing or SanDisk Financing, the following
      shall apply:

      (i)   [***].

      (ii)  Unless otherwise expressly agreed by both Parties in writing in each
            case, all Toshiba Financing and all SanDisk Financing shall create
            only several obligations of the Parties and no joint and several
            obligations or liability. Toshiba (with respect to Toshiba
            Financing) and SanDisk (with respect to SanDisk Financing) hereby
            indemnifies and holds harmless the other Party and its Indemnified
            Parties from any claims by any financial institution or other Person
            that the other Party has any liabilities or obligations with respect
            to, respectively, any Toshiba Financing or SanDisk Financing (unless
            joint liability has been agreed pursuant to the first sentence of
            this Section 6.10(c)(ii)).

      (iii) Flash Partners will use commercially reasonable efforts to comply
            with the requirements of any financing sources. Flash Partners will
            make available to each Party one-half of its assets (with as near as
            practicable cost, collateral value and type) to secure such Party's
            Financing (whether external or loans from a Party or its
            Affiliates).

(d)   If the lender under the Financing for either Party (as the "Defaulting
      Party") takes significant actions to enforce its right in the collateral,
      then the other Party (as the "Non-Defaulting Party") shall have the right,
      but not the obligation, to cure the default giving rise to the lender's
      enforcement action. If the Non-Defaulting Party exercises such cure right,
      then the Non-Defaulting Party's rights in any subject collateral shall be
      superior to the Defaulting Party's and the Non-Defaulting Party may
      exercise one of the following options:

      (i)   the Non-Defaulting Party (A) shall have a claim against the
            Defaulting Party for reimbursement of any payments made by the
            Non-Defaulting Party on the Defaulting Party's behalf (which will be
            subordinate to the lender's claims and bear interest at a rate 500
            basis points in excess of the rate being charged by the lender to
            the Defaulting Party) and (B) shall have the right, until and unless
            the Defaulting Party pays in full the

[***] 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.

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            obligation to the Non-Defaulting Party under foregoing clause (A),
            to take over the increment of production of the Y3 Facility
            represented by the collateral with respect to which the lender took
            significant actions to enforce its rights; or

      (ii)  the Non-Defaulting Party shall have the right to terminate the
            Operating Agreement pursuant to Section 11.6 thereof (Foreclosure
            Default).

6.11  Other Activities. Except as expressed in Section 5.6 and in the Common R&D
      Agreement, neither Party nor any of their respective Affiliates shall: (i)
      fabricate NAND Flash Memory Integrated Circuits at any location other than
      the Yokkaichi Facility or any other fabrication facility agreed upon by
      the Parties in writing; (ii) have any third party fabricate NAND Flash
      Memory Integrated Circuits; or (iii) have any right to fabricate NAND
      Flash Memory Integrated Circuits beyond the capacity as limited pursuant
      to this Section 6, as such capacity limitations may be amended from time
      to time in accordance with this Section 6. For the avoidance of doubt,
      nothing contained in the foregoing shall restrict the Parties from
      engaging in any other activities, including, without limitation, (i)
      designing any NAND Flash Memory Product; (ii) selling any NAND Flash
      Memory Product to any customer; (iii) entering into any equipment purchase
      or material supply agreements; or (iv) entering into any patent licensing
      arrangement; and nothing in the foregoing shall restrict Toshiba from
      installing any manufacturing line in the Toshiba Foundry Facility subject
      to the capacity limitations set forth in Section 6 of the FVC Japan Master
      Agreement and as provided herein, as such capacity limitations may be
      amended from time to time in accordance with this Section 6. For purposes
      of this Section 6.11, "NAND Flash Memory Integrated Circuits" means ICs
      included in the definition of NAND Flash Memory Products pursuant to
      Section 3.2.

6.12  Protection of Intellectual Property. Both Parties recognize that it is
      important for the success of the Y3 NAND Flash Memory Products business to
      promote the adoption of such Y3 NAND Flash Memory Products with a wide
      variety of customers and applications, whether for card use or non-card
      use, and with such recognition, each Party shall use reasonable efforts to
      protect and enhance the value of Y3 NAND Flash Memory Products. Further,
      where feasible, each Party shall share with Flash Partners internally
      prepared analyses of competitive products prepared by either Party so as
      to allow Flash Partners to respond to such information and remain
      competitive in the marketplace; provided, that neither Party warrants as
      to the accuracy or completeness of any such analysis so provided.

6.13  Tools.

(a)   All tools for the Y3 Facility shall be purchased by Flash Partners (or a
      lessor for Flash Partners' benefit as contemplated by Section 6.10(a)) and
      all such purchases shall be agreed upon by the Parties. Toshiba shall,
      from the Toshiba Semiconductor Company headquarters and at its own
      expense, provide Flash Partners with tool purchase service support and
      negotiate with vendors on Flash

                                       24
<PAGE>

      Partners' behalf. SanDisk shall have the right to participate in such
      negotiations or other tool purchase activities of Toshiba, at SanDisk's
      own expense.

(b)   All purchases of replacement tools for Flash Partners, to the extent the
      procedures or requirements therefor are not set forth in a Master
      Operative Document, shall be done only by agreement of the Parties.

7.    OTHER AGREEMENTS

      To supplement their agreement as expressed in certain of the Master
      Operative Documents, the Parties agree as set forth in this Section 7. To
      the extent of any conflict between this Section 7 and any other Master
      Operative Document referenced in this Section 7, the other Master
      Operative Document shall prevail.

7.1   Flash Partners Management.

(a)   As contemplated by the FP Operating Agreement, the Y3 Operating
      Committee's purpose is to give both Parties the ability to influence the
      day to day operating decisions of Flash Partners and the Y3 Facility. The
      Y3 Operating Committee is intended to be a collaborative body with
      real-time communications, respectful consultation and dispute resolution
      with the goal of making the Y3 Facility the most competitive (cost and
      technology) memory fabrication facility in the world.

(b)   If the Y3 Operating Committee is unable to decide an issue (by agreement
      of its two members) such issue shall be referred to the Board of
      Directors. Special meetings of the Board of Directors may be noticed for
      issues requiring urgent resolution. The Parties contemplate that while a
      special meeting of the Board of Directors is being noticed, their
      respective management teams will discuss any issue that the Y3 Operating
      Committee could not resolve.

(c)   If the Board of Directors is unable to decide an issue (by unanimous
      agreement), such issue shall be referred to the Management Committee for
      resolution, which shall be vested with final decision making authority.
      This Agreement separately provides for procedures if the Management
      Committee is unable to reach agreement on such issue.

7.2   Y3 Facility. Toshiba has designed and is constructing the Y3 Facility at
      its sole cost and expense. The Y3 Facility is scheduled to be completed by
      [***], provided that Toshiba shall have no liability to SanDisk,
      any SanDisk Affiliate or Flash Partners if completion is not achieved by
      such time. The depreciation charges for Y3 will be passed on to Flash
      Partners as further described in Section 7.3(d).

7.3   FP Foundry Agreement. Flash Partners and Toshiba shall enter into the FP
      Foundry Agreement at the Closing. The FP Foundry Agreement provides for
      ordering procedures, prices, delivery, cost reporting and other specific
      terms and conditions for the manufacture by Toshiba and supply to Flash
      Partners of Y3 NAND Flash Memory Products, which shall be consistent with
      the following basic terms:

[***] 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.

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<PAGE>

(a)   Facilities, Equipment and Raw Materials. The manufacturing facilities will
      be located at the Y3 Facility and die sort will be located [***] or such
      other place as the Parties may agree upon. Flash Partners and Toshiba will
      enter into an exclusive lease agreement with respect to the Y3 Facility
      and Flash Partners' manufacturing equipment located in the Y3 Facility to
      be used in the manufacture of Y3 NAND Flash Memory Products by Toshiba.
      Toshiba shall be responsible for obtaining the raw materials and services
      to be used in the manufacture of Y3 NAND Flash Memory Products.

(b)   Production. Toshiba will manufacture Y3 NAND Flash Memory Products at the
      Y3 Facility for Flash Partners ordered by Toshiba and SanDisk under the
      terms and conditions of the FP Purchase and Supply Agreements. Flash
      Partners and Toshiba (from the Yokkaichi Facility) will use their best
      efforts to achieve the Ramp-Up Plan manufacturing capacity (the "Y3
      Facility Target Capacity"). Wafers will be sorted between the Parties such
      that aggregate yield losses will be shared on an equal basis.

(c)   Operating Relationship. Toshiba shall provide all employees necessary for
      the manufacturing of the Y3 NAND Flash Memory Products.

(d)   Consideration to be Paid to Toshiba. Toshiba will be compensated by Flash
      Partners as provided in Section 4 of the FP Foundry Agreement.

(e)   No Duplication of Costs or Expenses. It is the intent of the Parties that
      any payments made by SanDisk under or pursuant to any Master Operative
      Documents or FVC Japan Operative Documents shall not be duplicative and
      SanDisk shall in no event be required to pay or contribute more than once
      for any service or product provided under such agreements, if such service
      is provided under more than one agreement. In addition, if SanDisk makes a
      direct payment for any service provided under any such agreement, the cost
      incurred by Toshiba (from the Yokkaichi Facility), FVC Japan or Flash
      Partners, as the case may be, in connection with the provision of such
      service shall not be included in the applicable wafer price charged to
      SanDisk.

(f)   Exclusivity. The Yokkaichi Facility shall be Flash Partners' exclusive
      manufacturing source for output of Y3 NAND Flash Memory Products. Flash
      Partners may seek external manufacturing sources for output in excess of
      the Yokkaichi Facility's capacity upon unanimous approval by the
      Management Committee.

7.4   FP Purchase and Supply Agreements. Flash Partners and each of the Parties
      or their respective Affiliates will enter into substantially identical FP
      Purchase and Supply Agreements providing for specific terms and conditions
      for the purchase by the Parties of Y3 NAND Flash Memory Products from
      Flash Partners, which shall be consistent with the following basic terms:

(a)   Manufacturing. Flash Partners shall manufacture or cause to be
      manufactured Y3 NAND Flash Memory Products as contemplated by Section 7.3.

[***] 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.

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<PAGE>

(b)   Purchase Commitment. Except as contemplated in Section 6.3(c)(ii), each
      Party shall (itself or through Affiliates) purchase one half (based on a
      measure of equivalent lots out per week with the equivalency being weighed
      based on the process complexity factors (as calculated by a formula to be
      mutually determined by the Parties) of the Y3 NAND Flash Memory Products)
      of the total L/M of Y3 NAND Flash Memory Products. The foregoing purchase
      commitment of each Party shall not be subject to reduction unless agreed
      in writing by the other Party, which may grant or withhold such approval
      in its sole discretion.

(c)   Sales Price for Y3 NAND Flash Memory Products Purchased by the Parties.
      The sales price charged by Flash Partners to the Parties for wafers
      manufactured at Y3 shall be the sum of:

      [***]

(d)   Other Cost Items. Other items related to the manufacture of Y3 NAND Flash
      Memory Products will be charged on a monthly basis from Flash Partners to
      the Parties and will include the following:

      [***]

7.5   Other Matters.

(a)   Forecasts/Production Planning. Each Party will submit forecasts, on a
      rolling six-month basis, directly to Flash Partners, as further provided
      in the Purchase and Supply Agreements. The one-time cost necessary for
      [***] will be borne by SanDisk, which, together with the one-time
      production control cost described in Section 7.5(b) is to be approximately
      [***]. Flash Partners production planning will hold a monthly production
      planning meeting with representatives of each Party, as further provided
      in the Purchase and Supply Agreements. At such meetings, the Parties will
      agree on a production plan for [***] which plan will be final (and the
      related forecast will be deemed to be covered by a binding purchase
      order).

(b)   Production Control. Flash Partners will provide [***] on a
      non-discriminatory basis to SanDisk with respect to [***], provided that
      the actual, one-time cost necessary for establishing a new system to
      provide [***] to SanDisk will be borne by SanDisk, which, together with
      the one-time forecast submission system cost described in Section 7.5(a),
      is estimated to be [***]. Each Party (through the Y3 Management Committee)
      will have the right to discuss the production schedule, planned wafer
      starts and planned wafer-outs for Flash Partners and make such reasonable
      requests as it deems in its respective commercial interest and Flash
      Partners, operations will honor such reasonable requests.

(c)   Operating Reports. SanDisk will have full access to any management or
      operation reports related to Flash Partners or Flash Partners' business
      through the Y3 Operating Committee (as defined in the FP Operating
      Agreement). Management and operating reports related to Flash Partners or
      Flash Partners' business as mutually agreed from time to time will be
      simultaneously made

[***] 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.

                                       27
<PAGE>

      available in Japanese and English to each Party. Upon request, Toshiba
      employees will explain such reports to SanDisk's employees and respond to
      questions from SanDisk's employees, but Toshiba will not be responsible
      for SanDisk's failure to understand such reports.

(d)   Insurance. Toshiba shall maintain or arrange property insurance covering
      assets owned or leased by Flash Partners and business interruption
      insurance in respect of the business of Flash Partners, the scope and
      amounts of which shall be consistent with Toshiba's practices at the
      Yokkaichi Facility and as required by any lender. This coverage shall
      provide basically full replacement value of all Flash Partners owned and
      leased equipment, subject to valuation as part of Toshiba's annual
      insurance policy renewal, and shall name Flash Partners as a beneficiary
      in respect of assets owned or leased by it and Flash Partners' employee
      expenses covered by business interruption insurance. On an annual basis,
      or when requested by either Party, the Y3 Operating Committee shall
      discuss and review the current insurance coverage and/or the need for any
      additional property or business interruption insurance in respect of Flash
      Partners' assets or business. Further, SanDisk reserves the right to seek
      to arrange additional property or business interruption insurance for its
      own account in respect of Flash Partners' assets or business. If SanDisk
      seeks such additional property or business interruption insurance, Toshiba
      shall cooperate in good faith to provide such information and access as is
      reasonably necessary for SanDisk to arrange such insurance. If Toshiba
      makes a recovery from a third party (other than an insurer per the above)
      in respect of both assets of Flash Partners and other assets, then Toshiba
      shall allocate to Flash Partners a share of the net amount of such
      recovery in proportion to the losses suffered by Flash Partners and total
      losses suffered by Flash Partners and Toshiba.

8.    TERMINATION

8.1   Termination.

(a)   Termination of any Master Operative Document by either Party shall be done
      only in good faith.

(b)   This Agreement shall be terminated automatically upon the earlier of the
      Transfer of all of a Party's FP Units to the other Party (or its
      Affiliate) or upon completion of the dissolution and liquidation of Flash
      Partners pursuant to Section 11

                                       28
<PAGE>

      (Dissolution) of the FP Operating Agreement (the date of such Transfer or
      dissolution and liquidation, the "FP Termination Date").

(c)   Upon termination of this Agreement resulting from an event of dissolution
      of Flash Partners due to the expiration of Flash Partners pursuant to
      Section 11.1(a) (Expiration) of the FP Operating Agreement:

      (i)   the Parties shall further amend the Cross License Agreement, as then
            in effect, to specify that each Party's patents issued or issuing on
            patent applications entitled to an effective filing date prior to
            the FP Termination Date are licensed on a royalty-free basis for the
            duration of such patents. The scope of the licenses as amended
            pursuant to this Section 8.1(c)(i) shall not be greater than the
            scope of those granted under the Cross License Agreement, as in
            effect as of the FP Termination Date.

      (ii)  Toshiba shall grant to SanDisk, effective upon the FP Termination
            Date, a non-exclusive, non-transferable (except to Affiliates of
            SanDisk), non-sub-licensable, fully paid up, royalty-free license to
            make, have made, use, sell and have sold NAND Flash Memory Products
            anywhere in the world utilizing the NAND technology transferred to
            and/or utilized at the Yokkaichi Facility, and SanDisk shall have
            full access to all such know-how at the Yokkaichi Facility which has
            been transferred to the Yokkaichi Facility prior to the FP
            Termination Date.

(d)   Upon a termination of this Agreement resulting from (i) an event of
      dissolution of Flash Partners or (ii) one Party's acquisition of all of
      the other Party's FP Units (the acquirer thereof referred to hereinafter
      as the "Acquiring Party" and the seller thereof referred to hereinafter as
      the "Selling Party") pursuant to Section 11.5 (Dissolution Upon Notice) of
      the FP Operating Agreement:

      (i)   Toshiba or the Acquiring Party, as the case may be, will, upon the
            request, prior to the FP Termination Date, of (A) SanDisk (such
            request to be made at the time of its notice pursuant to Section
            11.5 of the FP Operating Agreement) in the case of the dissolution
            of Flash Partners or (B) the Selling Party (each, a "Requesting
            Party"), as the case may be, continue to manufacture NAND Flash
            Memory Products for the Requesting Party (not to exceed the
            Requesting Party's capacity allocation available from Flash Partners
            under this Agreement as of the FP Termination Date (the "Termination
            Capacity")) for a period of eighteen (18) months following the
            Termination Date in the following ramp-down manner:

            (A)   During the first six months following the FP Termination Date:
                  100% of the Termination Capacity

            (B)   During the 7th through the 12th month following the FP
                  Termination Date: 75% of the Termination Capacity

            (C)   During the 13th through the 18th month following the FP
                  Termination Date: 50% of the Termination Capacity.

                                       29
<PAGE>

      (ii)  Toshiba and SanDisk and their respective Affiliates shall have a
            perpetual, fully paid-up, royalty-free right to use technology
            previously transferred to one another during the term of this
            Agreement.

      (iii) The Parties shall further amend the Cross License Agreement to
            specify that each Party's patents issued or issuing on patent
            applications entitled to an effective filing date prior to the FP
            Termination Date are licensed on a royalty free basis for the
            duration of such patents. The scope of the licenses as amended
            pursuant to this Section 8.1(d)(iii) shall not be greater than the
            scope of those granted under the Cross License Agreement, as in
            effect as of FP Termination Date.

      (iv)  Upon termination of this Agreement resulting from an event of
            dissolution of Flash Partners caused by Toshiba's election to
            withdraw from Flash Partners pursuant to the FP Operating Agreement,
            Toshiba hereby grants to SanDisk, effective upon the FP Termination
            Date, a non-exclusive, non-transferable (except to Affiliates of
            SanDisk), non-sub-licensable, fully paid-up, royalty-free license to
            make, have made, use, sell and have sold NAND Flash Memory Products
            anywhere in the world utilizing the NAND technology transferred to
            and/or utilized at the Yokkaichi Facility, and SanDisk shall have
            full access to all such know-how at the Yokkaichi Facility which has
            been transferred to the Yokkaichi Facility prior to the FP
            Termination Date.

(e)   Upon termination of this Agreement resulting from an event of dissolution
      of Flash Partners or Toshiba's acquisition of SanDisk's FP Units pursuant
      to Section 11.4 (Dissolution By Unilateral Option) of the FP Operating
      Agreement:

      (i)   From the Yokkaichi Facility, Toshiba will, upon request of SanDisk
            given within sixty (60) days of the notice given by SanDisk pursuant
            to Section 11.4 of the FP Operating Agreement, continue to
            manufacture products for SanDisk for a period of eighteen (18)
            months following the FP Termination Date in accordance with the
            following ramp-down manner; provided, however, such capacity
            allocation for SanDisk shall not exceed its capacity allocation
            available from Flash Partners under this Agreement as of the FP
            Termination Date (the "SanDisk Termination Capacity"):

            (A)   During the first six months following the FP Termination Date:
                  100% of the SanDisk Termination Capacity

            (B)   During the 7th through the 12th month following the FP
                  Termination Date: 75% of the SanDisk Termination Capacity

            (C)   During the 13th through the 18th month following the FP
                  Termination Date: 50% of the SanDisk Termination Capacity.

      (ii)  The Parties and their respective Affiliates shall have a perpetual,
            fully paid-up, royalty-free right to use technology previously
            transferred to one another during the term of this Agreement.

                                       30
<PAGE>

      (iii) The Parties shall further amend the Cross License Agreement to
            specify that, with respect only to Y3 NAND Flash Memory Products and
            any other Licensed Products defined in the License Agreement and
            manufactured with 300mm wafers at any facility, each Party's patents
            issued or issuing on patent applications entitled to an effective
            filing date prior to the FP Termination Date are licensed at the
            royalty rates specified in Schedule 8.1(e) until March 31, 2013;
            provided, that after such five (5) year period, such license shall
            be on a royalty free basis and provided, further, that at any time
            during such five year period, both Parties shall negotiate in good
            faith for up to one hundred and eighty (180) days as requested by
            either Party to mutually agree on royalty rates for patents filed by
            each Party after the FP Termination Date. The scope of the licenses
            as amended pursuant to this Section 8.1(e)(iii) shall not be greater
            than the scope of those granted under the Cross License Agreement,
            as in effect as of the FP Termination Date.

(f)   Upon termination of this Agreement resulting from an event of dissolution
      of Flash Partners or one Party's acquisition of the other Party's FP Units
      following a Deadlock (as defined in the FP Operating Agreement) pursuant
      to Section 10.3 (Dispute Resolution; Deadlock) of the FP Operating
      Agreement:

      (i)   In the case of one Party's acquisition of the other Party's FP Units
            pursuant to Section 10.4(e) of the FP Operating Agreement, the
            Acquiring Party shall continue to manufacture products for the other
            Party (not to exceed the other Party's Termination Capacity) for a
            period of eighteen (18) months following the FP Termination Date in
            accordance with the following ramp down manner:

            (A)   During the first six months following the FP Termination Date:
                  100% of the Termination Capacity

            (B)   During the 7th through the 12th month following the FP
                  Termination Date: 75% of the Termination Capacity

            (C)   During the 13th through the 18th month following the FP
                  Termination Date: 50% of the Termination Capacity.

      (ii)  The Parties and their respective Affiliates shall have a perpetual,
            fully paid-up, royalty-free right to use technology previously
            transferred to one another during the term of this Agreement.

      (iii) The Parties shall further amend the Cross License Agreement to
            specify that, with respect only to Y3 NAND Flash Memory Products and
            any other Licensed Products defined in the License Agreement and
            manufactured with 300mm wafers at any facility, each Party's patents
            issued or issuing on patent applications entitled to an effective
            filing date prior to the FP Termination Date are licensed: (x) at
            the royalty rates specified in Schedule 8.1(f) until March 31, 2012;
            (y) at the royalty rates specified in Schedule 8.1(e) from April 1,
            2012 through December 31,

                                       31
<PAGE>

            2014; and (z) thereafter, on a royalty-free basis. Both Parties
            shall negotiate in good faith for up to one hundred and eighty (180)
            days upon request of either Party at any time during the five-year
            period after the FP Termination Date to agree on royalty rates for
            patents filed by each Party after the FP Termination Date. The scope
            of the licenses as amended pursuant to this Section shall not be
            greater than the scope of those granted under the Cross License
            Agreement, as in effect as of the FP Termination Date.

      (g)   Upon termination of this Agreement resulting from an event of
            dissolution of Flash Partners or a Party's acquisition of the other
            Party's FP Units described in Section 11.3 (Dissolution Upon Event
            of Default) of the FP Operating Agreement:

            (i)   The Parties shall further amend the Cross License Agreement to
                  specify that, with respect only to Y3 NAND Flash Memory
                  Products and any other Licensed Products defined in the
                  License Agreement and manufactured with 300mm wafers at any
                  facility, each Party's patents issued or issuing on patent
                  applications entitled to an effective filing date prior to the
                  FP Termination Date are licensed at the royalty rates
                  specified in Schedule 8.1(g) for seven (7) years after the FP
                  Termination Date or until the end of calendar 2019, whichever
                  comes first, and thereafter such licenses shall be on a
                  royalty-free basis.

            (ii)  In the event that Toshiba or an Affiliate of Toshiba is the
                  Defaulting Party, Toshiba shall grant to SanDisk, effective
                  upon such date of termination, a non-exclusive,
                  non-transferable (except to Affiliates of SanDisk),
                  non-sub-licensable, fully paid-up, royalty-free license to
                  make, have made, use, sell and have sold NAND Flash Memory
                  Products anywhere in the world utilizing the NAND technology
                  transferred to and/or utilized at the Yokkaichi Facility, and
                  SanDisk shall have full access to all such know-how at the
                  Yokkaichi Facility which has been transferred to the Yokkaichi
                  Facility prior to the FP Termination Date.

      (h)   Upon termination of this Agreement resulting from an event of
            dissolution described in Section 11.1(f) (Bankruptcy Event) of the
            FP Operating Agreement:

            (i)   If such termination is caused by a Bankruptcy Event in respect
                  of Toshiba, (x) the license granted to SanDisk under Toshiba
                  Licensed Patents pursuant to the Cross License Agreement shall
                  continue on a royalty-free basis, and (y) Toshiba shall grant
                  to SanDisk, effective upon such date of termination, a
                  non-exclusive, non-transferable (except to Affiliates of
                  SanDisk), non-sub-licensable, fully paid-up, royalty-free
                  license to make, have made, use, sell and have sold NAND Flash
                  Memory Products anywhere in the world utilizing the NAND
                  technology transferred to and/or utilized at the Yokkaichi
                  Facility, and SanDisk shall have full access to all such
                  know-how at the Yokkaichi Facility which has been transferred
                  to the Yokkaichi Facility prior to the Termination Date.

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<PAGE>

      (ii)  If such termination is caused by a Bankruptcy Event in respect of
            SanDisk, the license granted to Toshiba under SanDisk Licensed
            Patents (as defined in the Cross License Agreement) pursuant to the
            Cross License Amendment shall continue on a royalty-free basis.

(i)   Upon a termination of this Agreement resulting from a purchase and sale
      transaction described in Section 11.6 (Financing Default) of the FP
      Operating Agreement, there shall be no capacity ramp-down rights or
      obligations and:

      (i)   If such termination is caused by a financing default in respect of
            Toshiba, (x) the Parties shall further amend the Cross License
            Agreement to specify that, with respect only to Y3 NAND Flash Memory
            Products and any other Licensed Products defined in the License
            Agreement and manufactured with 300mm wafers at any facility,
            Toshiba's patents issued or issuing on patent applications entitled
            to an effective filing date prior to the FP Termination Date are
            licensed to SanDisk on a royalty-free basis, and (y) Toshiba shall
            grant to SanDisk, effective upon such date of termination, a
            non-exclusive, non-transferable (except to Affiliates of SanDisk),
            non-sub-licensable, fully paid-up, royalty-free license to make,
            have made, use, sell and have sold NAND Flash Memory Products
            anywhere in the world utilizing the NAND technology transferred to
            and/or utilized at the Yokkaichi Facility, and SanDisk shall have
            full access to all such know-how at the Yokkaichi Facility which has
            been transferred to the Yokkaichi Facility prior to the Termination
            Date.

      (ii)  If such termination is caused by a financing default in respect of
            SanDisk, the Parties shall further amend the Cross License Agreement
            to specify that, with respect only to Y3 NAND Flash Memory Products
            and any other Licensed Products defined in the License Agreement and
            manufactured with 300mm wafers at any facility, SanDisk's patents
            issued or issuing on patent applications entitled to an effective
            filing date prior to the FP Termination Date are licensed to Toshiba
            on a royalty-free basis.

(j)   Termination of this Agreement shall not affect any surviving rights or
      obligations of either Party set forth in the Product Development Agreement
      and the Common R&D Agreement.

9.    MISCELLANEOUS

9.1   Survival. Sections 1.3, 6.9, 6.10(d), 8 and 9 and Appendix A shall survive
      the termination or expiration of this Agreement.

9.2   Entire Agreement. This Agreement, together with the exhibits, schedules,
      appendices and attachments thereto, constitutes the agreement of the
      Parties to this Agreement with respect to the subject matter hereof and
      supersedes all prior written and oral agreements and understandings with
      respect to such subject matter.

                                       33
<PAGE>

9.3   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.
      Each Master Operative Document shall be governed in accordance with its
      governing law provision and, in the absence of any such provision, by the
      first sentence of this Section 9.3.

9.4   Assignment. Neither Party may transfer this Agreement or any of its rights
      hereunder (except for any transfer to an Affiliate or in connection with a
      merger, consolidation or sale of all or substantially all the assets or
      the outstanding securities of such party, which transfer shall not require
      any consent of the other party) without the prior written consent of the
      other Party (which consent may be withheld in such other Party's sole
      discretion), and any such purported transfer without such consent shall be
      void.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       34
<PAGE>

      IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
Parties as of the date first above written.

                                       TOSHIBA CORPORATION

                                       By: /s/ Masashi Muromachi
                                           ---------------------------
                                       Name: Masashi Muromachi

                                       Title: President and CEO
                                              Semiconductor Company
                                              Corporate Vice President

                                       SANDISK CORPORATION

                                       By: /s/ Eli Harari
                                           ---------------------------
                                       Name: Eli Harari

                                       Title: President and CEO

                                       SANDISK INTERNATIONAL LIMITED

                                       By: /s/ Eli Harari
                                           ---------------------------
                                       Name: Eli Harari

                                       Title: President

[Signature page to Flash Partners Master Agreement]

                                       35
<PAGE>

APPENDICES

Appendix A                 -   Definitions, Rules of Construction and General
                               Terms and Conditions

EXHIBITS

(Flash Partners Documents)
Exhibit A1                 -   Unit Purchase Agreement
Exhibit A2                 -   FP Operating Agreement
Exhibit A3                 -   FP Foundry Agreement
Exhibit A4-1               -   SanDisk Purchase and Supply Agreement
Exhibit A4-2               -   Toshiba Purchase and Supply Agreement
Exhibit A5                 -   FP Patent Indemnification Agreement
Exhibit A6                 -   Mutual Environmental Indemnification Agreement
Exhibit A7                 -   Lease Agreement

(Joint Operative Documents)
Exhibit B1                 -   Common R&D and Participation Agreement
Exhibit B2                 -   Product Development Agreement
Exhibit B3                 -   Amendment No. 3 to Cross License Agreement
Exhibit B4                 -   Amendment No. 1 to Toshiba-SanDisk Services
                               Agreement

SCHEDULES

Schedule 4.5               -   Litigation; Decrees
Schedule 4.7               -   Patents and Proprietary Rights
Schedule 4.9               -   Cross License Payment Obligations
Schedule 6.1               -   Technology Transfer Costs
Schedule 6.3(b)            -   Ramp-Up Plan
Schedule 6.8               -   SanDisk FP Secondees
Schedule 8.1(d)            -   Royalty in case of SanDisk Unilateral Termination
Schedule 8.1(e)            -   Royalty in case of Deadlock Termination
Schedule 8.1(f)            -   Royalty in case of Event of Default Termination

                                   Schs., p. 1
<PAGE>

                                  SCHEDULE 4.5

                               LITIGATION, DECREES

                                      [***]

[***] 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.

                                   Schs., p. 1
<PAGE>

                                  SCHEDULE 4.7
                         PATENTS AND PROPRIETARY RIGHTS

                                      [***]

[***] 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.

                                   Schs., p. 2
<PAGE>

                                  SCHEDULE 4.9
                        CROSS LICENSE PAYMENT OBLIGATIONS

                                      [***]

[***] 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.

                                   Schs., p. 3

<PAGE>

                                  SCHEDULE 6.1
                            TECHNOLOGY TRANSFER COSTS

                                      [***]

[***] 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.

                                   Schs., p. 4
<PAGE>

                                 SCHEDULE 6.3(b)
                                  RAMP-UP PLAN

[***]

[***] 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.

                                   Schs., p. 5
<PAGE>

                                  SCHEDULE 6.8

                              SANDISK FP SECONDEES

[***]

[***] 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.

                                   Schs., p. 6
<PAGE>

                                 SCHEDULE 8.1(e)

                ROYALTY IN CASE OF SANDISK UNILATERAL TERMINATION

                                      [***]

[***] 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.

                                   Schs., p. 7
<PAGE>

                                 SCHEDULE 8.1(f)

                     ROYALTY IN CASE OF DEADLOCK TERMINATION

[***]

[***] 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.

                                   Schs., p. 8
<PAGE>

                                 SCHEDULE 8.1(g)

                 ROYALTY IN CASE OF EVENT OF DEFAULT TERMINATION

[***]

[***] 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.

                                   Schs., p. 9
<PAGE>

                                   APPENDIX A

                     DEFINITIONS, RULES OF CONSTRUCTION AND
                             DOCUMENTARY CONVENTIONS

            The following shall apply unless otherwise required by the main body
of the agreement into which this Appendix A is being incorporated (as used
herein, "this Agreement"):

                                   Definitions

            The following terms shall have the specified meanings:

            "Accountants" means such firm of internationally recognized
independent certified public accountants for Flash Partners as is appointed
pursuant to the FP Operating Agreement from time to time. Initially, the
Accountants shall be Shin Nihon & Company, an affiliate of Ernst & Young LLP.

            "Affiliate" of any Person means any other Person which directly or
indirectly controls, is controlled by or is under common control with, such
Person; provided, however, that the term Affiliate, (a) when used in relation to
Flash Partners or any Subsidiary of Flash Partners, shall not include SanDisk
Corporation or Toshiba or any Affiliate of either of them, and (b) when used in
relation to SanDisk Corporation or Toshiba or any Affiliate of either of them,
shall not include Flash Partners or any Subsidiary of Flash Partners.

            "Articles" means the Articles of Incorporation of Flash Partners.

            "Bankruptcy Event" means, with respect to any Person, the occurrence
or existence of any of the following events or conditions: such Person (1) is
dissolved; (2) becomes insolvent or fails or is unable or admits in writing its
inability generally to pay its debts as they become due; (3) makes a general
assignment, arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors' rights, or a petition is presented
for its winding up or liquidation and, in the case of any such proceeding or
petition instituted or presented against it, such proceeding or petition (A)
results in a judgment of insolvency or bankruptcy or the entry of an order for
relief or the making of an order for its winding up or liquidation or (B) is not
dismissed, discharged, stayed or restrained in each case within 60 days of the
institution or presentation thereof; (5) has a resolution passed by its
governing body for its winding-up or liquidation; (6) seeks or becomes subject
to the appointment of an administrator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets (regardless
of how brief such appointment may be, or whether any obligations are promptly
assumed by another entity or whether any other event described in this clause
(6) has occurred and is continuing); (7) experiences any event which, under the
applicable laws of any jurisdiction, has an analogous effect to any of the
events specified in clauses (1) through (6) above; or (8) takes any action in

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.

                                       1
<PAGE>

furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the foregoing acts.

            "Board of Directors" means the board of directors of Flash Partners.

            "Burdensome Condition" means, with respect to any proposed
transaction, any action taken, or credibly threatened, by any Governmental
Authority or (except if such action or threat is frivolous) other Person to
challenge the legality of such proposed transaction, including (i) the pendency
of a governmental investigation (formal or informal) in contemplation of the
possible actions described in clauses (ii)(A), (ii)(B) or (ii)(C) below, (ii)
the institution of a suit or the written threat thereof (A) seeking to restrain,
enjoin or prohibit the consummation of such transaction or material part
thereof, to place any material condition or limitation upon such consummation or
to invalidate, suspend or require modification of any material provision of any
Operative Document, (B) challenging the acquisition by either Toshiba or SanDisk
International of its Units or (C) seeking to impose limitations on the ability
of either Toshiba or SanDisk International effectively to exercise full rights
as Unitholder of Flash Partners, including the right to act on all matters
properly presented to the parties pursuant to the FP Operating Agreement, or
(iii) an order by a court of competent jurisdiction having any of the
consequences described in (ii)(A), (ii)(B) or (ii)(C) above, or placing any
conditions or limitations upon such consummation that are unreasonably
burdensome in the reasonable judgment of the applicable Person.

            "Business Day" means any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of California or Japan) on which commercial
banks are open for business in the State of California or Tokyo, Japan.

            "Business Plan" means the Initial Business Plan and each subsequent
business plan, including budgets and projections for Flash Partners for each
relevant period, approved in accordance with Section 3.4(c) of the FP Operating
Agreement and complying with Section 3.4(b) of the FP Operating Agreement.

            "Capital Contribution" means the capital contribution made by or
allocated to a Party by virtue of its ownership of Units, as indicated on
Schedule 6.1 to the FP Operating Agreement.

            "Change of Control" with respect to a Person means a transaction or
series of related transactions as a result of which (i) more than 50% of the
beneficial ownership of the outstanding common stock or other ownership
interests of such Person (representing the right to vote for the board of
directors or similar organization of such Person) is acquired by another Person
or affiliated group of Persons, whether by reason of stock acquisition, merger,
consolidation, reorganization or otherwise or (ii) the sale or disposition of
all or substantially all of a Person's assets to another Person or affiliated
group of Persons.

            "Closing" means the closing of the transactions described in
Sections 2.1 of the Master Agreement.

            "Closing Date" means the date of the Closing.

                                       2
<PAGE>

            "Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute. Any reference to a particular provision of
the Code or a treasury regulation promulgated pursuant to the Code means, where
appropriate, the corresponding provision of any successor statute or regulation.

            "Common R&D Agreement" means the Amended and Restated Common R&D and
Participation Agreement, dated as of the Effective Date, between Toshiba and
SanDisk Corporation.

            "Control" (including its correlative meanings "controlled by" and
"under common control with") means possession, directly or indirectly, of power
to direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by contract
or otherwise).

            "Cross License Agreement" has the meaning given in the Master
Agreement.

            "Effective Date" means September 10, 2004.

            "Environmental Indemnification Agreement" means the Mutual
Contribution and Environmental Indemnification Agreement, dated as of the
Effective Date, between Toshiba and SanDisk Corporation.

            "Event of Default" means, with respect to a Party, the occurrence or
existence of any of the following events or conditions which remains uncured for
sixty (60) days following receipt by such Party of written notice thereof:

            (a) a Bankruptcy Event in respect of such Party or any Person of
      which such Party is a Subsidiary; or

            (b) the breach by such Party of its covenant in Section 9.1 of the
      FP Operating Agreement or the breach by such Party of its covenant in
      Section 5.1(b) of the Master Agreement, provided that a Change of Control
      of a Party shall not be deemed an Event of Default.

            "Fiscal Quarter" means, unless changed by the Board of Directors, a
calendar quarter.

            "Fiscal Year" means the one year period commencing on April 1 of
each year.

            "Flash Partners" means Flash Partners, Ltd., a Japanese limited
liability company (yugen kaisha).

            "FP Foundry Agreement" means the Foundry Agreement, dated as of the
Effective Date, between Flash Partners and Yokkaichi.

            "FP Operating Agreement" means the Operating Agreement, dated as of
the Effective Date, between Toshiba and SanDisk International.

                                       3
<PAGE>

            "FP Operative Documents" has the meaning given in the Master
Agreement.

            "FP Secondee" means an employee of SanDisk or any of its Affiliates
who is assigned to work at Flash Partners or any of its Subsidiaries by SanDisk
or such Affiliate as contemplated by Section 6.8 of the Master Agreement.

            "FVC Japan" means FlashVision Ltd., a Japanese limited liability
company (yugen kaisha).

            "FVC Japan Equipment" means any equipment which is or will, from
time to time, be owned or leased by FVC Japan.

            "FVC Japan Master Agreement" means the Master Agreement between
Toshiba and SanDisk dated as of April 10, 2002, as amended and restated as of
the Effective Date.

            "FVC Japan Operative Documents" means the FVC Japan Master Agreement
as amended to date, the New Operating Agreement between the Parties, dated as of
April 10, 2002, as amended to date, the Foundry Agreement between FVC Japan and
Toshiba, dated as of April 10, 2002, the SanDisk Foundry Agreement between the
Parties, dated as of April 10, 2002, the Purchase and Supply Agreement between
FVC Japan and SanDisk, dated as of April 10, 2002, the Purchase and Supply
Agreement between FVC Japan and Toshiba, dated as of April 10, 2002, and the
Services Agreement between FVC Japan and Toshiba dated as of April 1, 2002.

            "FVC Japan NAND Flash Memory Products" has the meaning given in
Section 3.3 of the Master Agreement.

            "Governmental Action" means any authorization, consent, approval,
order, waiver, exception, variance, franchise, permission, permit or license of,
or any registration, filing or declaration with, by or in respect of, any
Governmental Authority.

            "Governmental Authority" means any United States or Japanese
federal, state, local or other political subdivision or foreign governmental
Person, authority, agency, court, regulatory commission or other governmental
body, including the Internal Revenue Service and the Secretary of State of any
State.

            "Governmental Rule" means any statute, law, treaty, rule, code,
ordinance, regulation, license, permit, certificate or order of any Governmental
Authority or any judgment, decree, injunction, writ, order or like action of any
court or other judicial or arbitration tribunal.

            "Indebtedness" of any Person means, without duplication:

            (a) all obligations (whether present or future, contingent or
      otherwise, as principal or surety or otherwise) of such Person in respect
      of borrowed money or in respect of deposits or advances of any kind;

            (b) all obligations of such Person evidenced by bonds, debentures,
      notes or similar instruments;

                                       4
<PAGE>

            (c) all obligations of such Person upon which interest charges are
      customarily paid, except for trade payables;

            (d) all obligations of such Person under conditional sale or other
      title retention agreements relating to property or assets purchased by
      such Person;

            (e) all obligations of such Person issued or assumed as the deferred
      purchase price of property or services (other than with respect to the
      purchase of personal property under standard commercial terms);

            (f) all Indebtedness of others secured by (or for which the holder
      of such Indebtedness has an existing right, contingent or otherwise, to be
      secured by) any Lien on property owned or acquired by such Person, whether
      or not the obligations secured thereby have been assumed;

            (g) all guarantees by such Person of Indebtedness of others;

            (h) all obligations of such Person to pay rent or other amounts
      under any lease of (or other arrangement conveying the right to use) real
      or personal property (or a combination thereof), which obligations would
      be required to be classified and accounted for as capital leases on a
      balance sheet of such Person prepared in accordance with Japanese GAAP or
      US GAAP, as applicable;

            (i) all obligations of such Person (whether absolute or contingent)
      in respect of interest rate swap or protection agreements, foreign
      currency exchange agreements or other interest or exchange rate hedging
      arrangements; and

            (j) all obligations of such Person as an account party in respect of
      letters of credit and bankers' acceptances.

            The Indebtedness of any Person shall include the Indebtedness of any
partnership in which such Person is a general partner.

            "Indemnified Parties" means the Party being indemnified's officers,
directors, employees, agents, contractors, subcontractors, and transferees
permitted pursuant to the FP Operating Agreement and the Master Agreement.

            "Japan Act" means the Japanese Limited Liability Company Act
(yugenkaisha-ho), as in effect from time to time.

            "Japanese GAAP" means generally accepted accounting principles in
Japan as in effect from time to time, consistently applied.

            "Japanese GAAS" means generally accepted auditing standards in Japan
as in effect from time to time.

            "License Agreement" means the Patent Cross License Agreement dated
July 30, 1997 by and between Toshiba and SanDisk, [***]

[***] 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.

                                       5
<PAGE>

            "Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or similar right with
respect to such securities.

            "L/M" means lots per month.

            "Management Committee" has the meaning given in the Master
Agreement.

            "Master Agreement" means the Flash Partners Master Agreement, dated
as of the Effective Date, by and among Toshiba, SanDisk and SanDisk
International.

            "Material" means, with respect to any Person, an event, change or
effect which is or, insofar as reasonably can be foreseen, will be material to
the condition (financial or otherwise), properties, assets, liabilities,
capitalization, licenses, businesses, operations or prospects of such Person
and, in the case of Flash Partners, the ability of Flash Partners to carry out
its then-current Business Plan.

            "NAND Flash Memory Products" has the meaning given in Section 3.2 of
the Master Agreement.

            "Net Book Value" means, with respect to any Person, the total assets
of such Person less the total liabilities of such Person, in each case as
determined in accordance with Japanese GAAP or US GAAP, as applicable.

            "Patent Indemnification Agreement" means the Patent Indemnification
Agreement dated as of the Effective Date between Toshiba and SanDisk
Corporation.

            "Percentage" means, with respect to any Unitholder (as defined in
the FP Operating Agreement), the percentage of such Unitholders' ownership
interest in Flash Partners. For the avoidance of doubt, as of the date hereof,
Percentage means with respect to Toshiba or its Affiliate, 50.1%, and with
respect to SanDisk International or its Affiliate, 49.9%; provided, however, if
either Unitholder transfers all of its Units to any Affiliate in accordance with
the FP Operating Agreement, its Percentage shall be 0% and such Affiliate
transferee shall receive the entire Percentage of the transferring Unitholder.

            "Permitted Liens" means (a) the rights and interests of Flash
Partners, either Party or any Affiliate of any such Person as provided in the FP
Operative Documents, and (b) Liens for Taxes which are not due and payable or
which may after contest be paid without penalty or which are being contested in
good faith and by appropriate proceedings and so long as such proceedings shall
not involve any substantial risk of the sale, forfeiture or loss of any part of
any relevant asset or title thereto or any interest therein.

                                       6
<PAGE>

            "Person" means any individual, firm, company, corporation, limited
liability company, unincorporated association, partnership, trust, joint
venture, Governmental Authority or other entity, and shall include any successor
(by merger or otherwise) of such entity.

            "Product Development Agreement" means the Amended and Restated
Product Development Agreement, dated as of the Effective Date, between Toshiba
and SanDisk Corporation.

            "SanDisk Corporation" means SanDisk Corporation, a Delaware
corporation.

            "SanDisk International" means SanDisk International Limited, a
company organized under the laws of the Cayman Islands.

            "SanDisk Purchase and Supply Agreement" means the Purchase and
Supply Agreement, dated as of the Effective Date, between SanDisk International
and Flash Partners.

            "Subsidiary" of any Person means any other Person:

            (i) more than 50% of whose outstanding shares or securities
      (representing the right to vote for the election of directors or other
      managing authority) are, or

            (ii) which does not have outstanding shares or securities (as may be
      the case in a partnership, joint venture or unincorporated association),
      but more than 50% of whose ownership interest representing the right to
      make decisions (equivalent to those generally reserved for the board of
      directors of a corporation) for such other Person is,

now or hereafter owned or controlled, directly or indirectly, by such Person,
but such other Person shall be deemed to be a Subsidiary only so long as such
ownership or control exists; provided, however, that the term Subsidiary as used
in any FP Operative Document, when used in relation to a Party or any of its
Affiliates, shall not include Flash Partners or any of its Subsidiaries.

            "Tax" or "Taxes" means all United States or Japanese Federal, state,
local or other political subdivision and foreign taxes, assessments and other
governmental charges, including: (a) taxes based upon or measured by gross
receipts, income, profits, sales, use or occupation and (b) value added, ad
valorem, transfer, franchise, withholding, payroll, employment, excise or
property taxes, together with (c) all interest, penalties and additions imposed
with respect to such amounts and (d) any obligations under any agreements or
arrangements with any other Person with respect to such amounts.

            "Toshiba" means Toshiba Corporation, a Japanese corporation.

            "Toshiba Foundry Facility" means the Yokkaichi Facility, excluding
the Y3 Facility and the FVC Japan Equipment but including Toshiba's Asahi
facility and Toshiba's Oita facility.

            "Toshiba Foundry NAND Flash Memory Products" means NAND Flash Memory
Products manufactured at a Toshiba Foundry Facility.

                                       7
<PAGE>

            "Toshiba-SanDisk Services Agreement" mean Amendment No. 1 to
Services Agreement, dated as of the Effective Date, between SanDisk Corporation
and Toshiba.

            "Toshiba Purchase and Supply Agreement" means the Purchase and
Supply Agreement, dated as of the Effective Date, between Toshiba and Flash
Partners.

            "Transfer" means any transfer, sale, assignment, conveyance,
creation of any Lien (other than a Permitted Lien), or other disposal or
delivery, including by dividend or distribution, whether made directly or
indirectly, voluntarily or involuntarily, absolutely or conditionally, or by
operation of law or otherwise.

            "Unique Activities" means production activities of Flash Partners at
the request of either Unitholder to (i) implement changes in the manufacturing
processes to be employed for Products to be manufactured for such Unitholder (or
its Affiliates) that are not agreed to by the other Unitholder, (ii) commence
manufacturing other Products for the requesting Unitholder (or its Affiliates)
that the other Unitholder does not desire to have manufactured for it and which
require a change in manufacturing processes or in the utilization of the
Facility or production resources, or (iii) implement any other change in its
operations in order to manufacture Products specifically for the requesting
Unitholder (or its Affiliates).

            "Unitholder" means the holder of any Units.

            "Units" means the units of contribution (shussi mochibun) in Flash
Partners, the par value of one Unit (shussi-hitokuchi-no-kingaku) being JPY
5,000.

            "US GAAP" means generally accepted accounting principles in the
United States as in effect from time to time, consistently applied.

            "US GAAS" means generally accepted auditing standards in the United
States as in effect from time to time.

            "Y3 Facility" has the meaning given in the Master Agreement.

            "Y3 NAND Flash Memory Products" has the meaning given in Section 3.3
of the Master Agreement.

            "Yokkaichi Facility" means Toshiba's facilities in Yokkaichi Japan,
including the FVC Japan Equipment, the Y3 Facility and Toshiba's Asahi facility.

                Rules of Construction and Documentary Conventions

2.1 Amendment and Waiver. No amendment to or waiver of this Agreement shall be
effective unless it shall be in writing, identify with specificity the
provisions of this Agreement that are thereby amended or waived and be signed by
each party hereto. Any failure of a party to comply with any obligation,
covenant, agreement or condition contained in this Agreement may be waived by
the party entitled to the benefits thereof only by a written instrument duly
executed

                                       8
<PAGE>

and delivered by the party granting such waiver, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure of compliance.

2.2 Severability. If any provision of this Agreement or the application of any
such provision is invalid, illegal or unenforceable in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement (except as may be expressly provided in this Agreement) or
invalidate or render unenforceable such provision in any other jurisdiction. To
the extent permitted by applicable law, the parties hereto waive any provision
of law that renders any provision of this Agreement invalid, illegal or
unenforceable in any respect. The parties hereto shall, to the extent lawful and
practicable, use their reasonable efforts to enter into arrangements to
reinstate the intended benefits, net of the intended burdens, of any such
provision held invalid, illegal or unenforceable. If the intent of the Parties
for entering into the FP Operative Documents, considered as a single
transaction, cannot be preserved, the FP Operative Documents shall either be
renegotiated or terminated by mutual agreement of the Parties.

2.3 Assignment. Except as may otherwise be specifically provided in this
Agreement, no party hereto shall Transfer this Agreement or any of its rights
hereunder (except for any Transfer to an Affiliate or in connection with a
merger, consolidation or sale of all or substantially all the assets or the
outstanding securities of such party, which Transfer shall not require any
consent of the other parties) without the prior written consent of each other
party hereto (which consent may be withheld in each such other party's sole
discretion), and any such purported Transfer without such consent shall be void.

2.4 Remedies.

(a) Except as may otherwise be specifically provided in this Agreement, the
rights and remedies of the parties under this Agreement are cumulative and are
not exclusive of any rights or remedies which the parties hereto would otherwise
have.

(b) Equitable relief, including the remedies of specific performance and
injunction, shall be available with respect to any actual or attempted breach of
this Agreement; provided, however, in the absence of exigent circumstances, the
parties shall refrain from commencing any lawsuit or seeking judicial relief in
connection with such actual or attempted breach that is contemplated to be
addressed by the dispute resolution process set forth in the Master Agreement
and in Section 2.5 of this Appendix A until the parties have attempted to
resolve the subject dispute by following said dispute resolution process to its
conclusion.

(c) If the due date for any amount required to be paid under this Agreement is
not a Business Day, such amount shall be payable on the next succeeding Business
Day; provided that if payment cannot be made due to the existence of a banking
crisis or international payment embargo, such amount may be paid within the
following 30 days. If due to the occurrence of an act of God, any party is
prevented from providing training, technical assistance or other similar support
required to be provided to Flash Partners pursuant to this Agreement, such party
shall have an additional 30 day period to make alternative arrangements to
provide such support.

                                       9
<PAGE>

2.5 Arbitration. Any dispute concerning this Agreement shall be referred to the
Management Committee and handled by it in accordance with the Master Agreement.
If the Management Committee cannot resolve such dispute in accordance with the
terms of the Master Agreement, then such dispute will be settled by binding
arbitration in San Francisco, California. The dispute shall be heard by a panel
of three arbitrators pursuant to the rules of the International Chamber of
Commerce. The awards of such arbitration shall be final and binding upon the
parties thereto. Each party will bear its own fees and expenses associated with
the arbitration. Filing fees and arbitrator fees charged by the ICC shall be
borne equally by the Parties.

2.6 Damages Limited. IN THE ABSENCE OF ACTUAL FRAUD, IN NO EVENT SHALL ANY PARTY
BE LIABLE TO OR BE REQUIRED TO INDEMNIFY ANY OTHER PARTY OR ANY OF THEIR
RESPECTIVE AFFILIATES FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT
DAMAGE OF ANY KIND, (INCLUDING WITHOUT LIMITATION LOSS OF PROFIT OR DATA),
WHETHER OR NOT ADVISED OF THE POSSIBILITY OF SUCH LOSS.

2.7 Parties in Interest; Limitation on Rights of Others. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their permitted
successors and assigns. Nothing in this Agreement, whether express or implied,
shall give or be construed to give any Person (other than the parties hereto and
their permitted successors and assigns) any legal or equitable right, remedy or
claim under or in respect of this Agreement, unless such Person is expressly
stated in such agreement or instrument to be entitled to any such right, remedy
or claim.

2.8 Table of Contents; Headings. The Table of Contents and Article and Section
headings of this Agreement are for convenience of reference only and shall not
affect the construction of or be taken into consideration in interpreting any
such agreement or instrument.

2.9 Counterparts; Effectiveness. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all of which counterparts shall together constitute
but one and the same contract. This Agreement shall not become effective until
one or more counterparts have been executed by each party hereto and delivered
to the other parties hereto.

2.10 Entire Agreement. This Agreement, together with each other FP Operative
Documents and the Exhibits, Schedules, Appendices and Attachments hereto and
thereto, when completed, constitute the agreement of the parties to the FP
Operative Documents with respect to the subject matter thereof and supersede all
prior written and oral agreements and understandings with respect to such
subject matter.

2.11 Construction. References in this Agreement to any gender include references
to all genders, and references in this Agreement to the singular include
references to the plural and vice versa. Unless the context otherwise requires,
the term "party" when used in this Agreement means a party to this Agreement.
References in this Agreement to a party or other Person include their respective
permitted successors and assigns. The words "include", "includes" and
"including", when used in this Agreement, shall be deemed to be followed by the
phrase "without limitation". Unless the context otherwise requires, references
used in this Agreement to Articles, Sections, Exhibits, Schedules, Appendices
and Attachments shall be deemed references

                                       10
<PAGE>

to Articles and Sections of, and Exhibits, Schedules, Appendices and Attachments
to, this Agreement. Unless the context otherwise requires, the words "hereof",
"hereby" and "herein" and words of similar meaning when used in this Agreement
refer to this Agreement in its entirety and not to any particular Article,
Section or provision of this Agreement. Any reference to a FP Operative Document
shall include such FP Operative Document as amended or supplemented from time to
time in accordance with the provisions thereof.

2.12 Official Language. The official language of this Agreement is the English
language only, which language shall be controlling in all respects, and all
versions of this Agreement in any other language shall not be binding on the
parties hereto or nor shall such other versions be admissible in any legal
proceeding, including arbitration, brought under this Agreement. All
communications and notices to be made or given pursuant to this Agreement shall
be in the English language.

2.13 Notices. All notices and other communications to be given to any party
under this Agreement shall be in writing and any notice shall be deemed received
when delivered by hand, courier or overnight delivery service, or by facsimile
(if confirmed within two Business Days by delivery of a copy by hand, courier or
overnight delivery service), or five days after being mailed by certified or
registered mail, return receipt requested, with appropriate postage prepaid and
shall be directed to the address of such party specified below (or at such other
address as such party shall designate by like notice):

         (a) If to SanDisk or SanDisk International:

         SanDisk Corporation
         140 Caspian Court
         Sunnyvale, CA 94089
         Telephone: (408) 542-0555
         Facsimile: (408) 542-0600
         Attention: President and CEO

         With a copy to:

         SanDisk Corporation
         140 Caspian Court
         Sunnyvale, CA 94089
         Telephone: (408) 548-0208
         Facsimile: (408) 548-0385
         Attention: Vice President and General Counsel

                                       11
<PAGE>

         (b) If to Toshiba:

         Toshiba Corporation
         Semiconductor Company
         1-1 Shibaura 1-Chome
         Minato-Ku, Tokyo 105-8001 Japan
         Telephone: 011 81 3 3457 3362
         Facsimile: 011 81 3 5444 9339
         Attention: Vice President

         With a copy to:

         Toshiba Corporation
         Semiconductor Company
         Legal Affairs and Contracts Division
         1-1 Shibaura 1-Chome
         Minato-Ku, Tokyo 105-8001 Japan
         Telephone: 011-81-3-3457-3452
         Facsimile: 011-81-3-5444-9342
         Attention: General Manager

         (c) If to Flash Partners:

         Flash Partners, Ltd.
         800 Yamanoisshikicho,
         Yokkaichi, Mie, Japan
         Attention: President

                                       12
<PAGE>

         With a copy to:

         SanDisk Corporation
         140 Caspian Court
         Sunnyvale, CA 94089
         Telephone: (408) 542-0510
         Facsimile: (408) 542-0640
         Attention: Chief Operating Officer

         And

         Toshiba Corporation
         Semiconductor Company
         Legal Affairs and Contracts Division
         1-1 Shibaura 1-Chome
         Minato-Ku, Tokyo 105-8001 Japan
         Telephone: 011-81-3-3457-3452
         Facsimile: 011-81-3-5444-9342
         Attention: General Manager

2.14 Non Disclosure Obligations. Each party hereto agrees as follows:

(a) In this Agreement, "Confidential Information" means information disclosed in
written, recorded, graphical or other tangible from which is marked as
"Confidential", "Proprietary" or in some other manner to indicate its
confidential nature, and/or orally or in other intangible form, identified as
confidential at the time of disclosure and confirmed as confidential information
in writing within thirty (30) days of its initial disclosure.

(b) For a period of [***] from the date of receipt of the Confidential
Information disclosed by one Party (the "Disclosing Party") hereunder, the
receiving Party (the "Receiving Party") agrees to safeguard the Confidential
Information and to keep it in confidence and to use reasonable efforts,
consistent with those used in the protection of its own confidential
information, to prevent its disclosure to third parties, except that the
Receiving Party shall not be obligated hereunder in any respect to information
which:

      (i)   is already known to the Receiving Party at the time of its receipt
            from the Disclosing Party as reasonably evidenced by its written
            records; or

      (ii)  is or becomes publicly available without breach of this Agreement by
            the Receiving Party; or

      (iii) is made available to a third party by the Disclosing Party without
            restriction on disclosure; or

      (iv)  is rightfully received by the Receiving Party from a third party
            without restriction and without breach of this Agreement; or

[***]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.

                                       13
<PAGE>

      (v)   is independently developed by the Receiving Party as reasonably
            evidenced by its written records contemporaneous with such
            development; or

      (vi)  is disclosed with the prior written consent of the Disclosing Party,
            provided that each recipient from the Receiving Party shall execute
            a confidentiality agreement prohibiting further disclosure of the
            Confidential Information, under terms no less restrictive that those
            provided in this Agreement; or

      (vii) is required to be disclosed by the order of a governmental agency or
            legislative body of a court of competent jurisdiction, provided that
            the Receiving Party shall give the Disclosing Party prompt notice of
            such request so that the Disclosing Party has an opportunity to
            defend, limit or protect such disclosure; or

      (viii) is required to be disclosed by applicable securities of other laws
            or regulations, provided that SanDisk shall, prior to any such
            disclosure required by the U.S. Securities and Exchange Commission,
            provide Toshiba with notice which includes a copy of the proposed
            disclosure. Further, SanDisk shall consider Toshiba's timely input
            with respect to the disclosure.

(c) Receiving Party shall use its reasonable best efforts to limit dissemination
of the Disclosing Party's Confidential Information to such of its employees who
have a need to know such information for the purpose for which such information
was disclosed to it. Receiving Party understands that disclosure or
dissemination of the Disclosing Party's Confidential Information not expressly
authorized hereunder would cause irreparable injury to the Receiving Party, for
which monetary damages would not be an adequate remedy and the Disclosing Party
shall be entitled to equitable relief in addition to any remedies the Disclosing
Party may have hereunder or at law.

(d) Nothing contained in this Agreement shall be construed as granting or
conferring any rights, licenses or relationships by the transmission of the
Confidential Information.

(e) All Confidential Information disclosed hereunder shall remain the property
of the Disclosing Party. Upon request by the Disclosing Party, the Receiving
Party shall return all Confidential Information, including any and all copies
thereof, or certify in writing that all such Confidential Information had been
destroyed.

2.15 Definitions. The definitions set forth in Article I of this Appendix A
shall apply to this Article II.

                                       14<PAGE>

                                                                    EXHIBIT 10.2

================================================================================

                   OPERATING AGREEMENT OF FLASH PARTNERS LTD.

                         Dated as of September 10, 2004

                                     between

                               TOSHIBA CORPORATION

                                       and

                          SANDISK INTERNATIONAL LIMITED

================================================================================

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.

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                    PAGE
<S>                                                                                 <C>
1.       DEFINITIONS, RULES OF CONSTRUCTION AND DOCUMENTARY CONVENTIONS.........      1

         1.1      Certain Definitions...........................................      1
         1.2      Additional Definitions........................................      1
         1.3      Rules of Construction and Documentary Conventions.............      2

2.       GENERAL PROVISIONS.....................................................      2

         2.1      Ownership of Units; Capital Increase..........................      2
         2.2      Name..........................................................      3
         2.3      Principal Office..............................................      3
         2.4      Term; Extension...............................................      3
         2.5      Scope of Activity.............................................      3
         2.6      Powers........................................................      3
         2.7      Articles of Incorporation.....................................      3
         2.8      Company Actions...............................................      3

3.       BUSINESS OPERATIONS....................................................      3

         3.1      Business Dealings with the Company............................      3
         3.2      Other Activities..............................................      4
         3.3      Personnel.....................................................      4
         3.4      Business Plans and Related Matters............................      6
         3.5      Standard of Care..............................................      7
         3.6      Use of Names..................................................      7

4.       ACTIONS BY THE UNITHOLDERS.............................................      7

         4.1      Matters Requiring the Approval of the Unitholders.............      8
         4.2      General Meetings of Unitholders...............................     10
         4.3      Restrictions on Unitholders...................................     10

5.       MANAGEMENT AND OPERATIONS OF COMPANY...................................     11

         5.1      Meetings of the Board of Directors............................     11
         5.2      Officers; Employees...........................................     16
         5.3      Y3 Representatives; Y3 Operating Committee....................     16
         5.4      Insurance.....................................................     17
         5.5      Records.......................................................     17

6.       CAPITAL CONTRIBUTIONS; DISTRIBUTIONS...................................     18

         6.1      Capital Contributions.........................................     18
         6.2      Distributions.................................................     18
</TABLE>

                                      -i-

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                    PAGE
<S>                                                                                 <C>
         6.3      No Interest...................................................     19
         6.4      Return of Capital Contributions...............................     19

7.       ADDITIONAL CONTRIBUTIONS...............................................     19

8.       ACCOUNTING AND TAXATION................................................     19

         8.1      Financial Accounting Conventions..............................     19
         8.2      Maintenance of Books of Account...............................     20
         8.3      Financial Statements..........................................     20
         8.4      Other Reports and Inspection..................................     22
         8.5      Characterization..............................................     22
         8.6      Deposit of Funds..............................................     22

9.       UNITS OF CONTRIBUTION; DISPOSITION OF UNITS............................     22

         9.1      Restrictions on Transfer of Units.............................     22
         9.2      Admission of New Unitholders..................................     24
         9.3      Withdrawal Prohibited.........................................     24
         9.4      Purchase of Additional Interest...............................     24

10.      CERTAIN AGREEMENTS OF THE UNITHOLDERS..................................     25

         10.1     Taxes and Charges; Governmental Rules.........................     25
         10.2     Further Assurances............................................     25
         10.3     Dispute Resolution; Deadlock..................................     25
         10.4     Remedies Upon Event of Default; Termination on Breach.........     27
         10.5     Mechanics of Sale.............................................     27

11.      DISSOLUTION............................................................     28

         11.1     Events of Dissolution.........................................     28
         11.2     Dissolution by Agreement......................................     28
         11.3     Dissolution Upon Event of Default.............................     28
         11.4     Dissolution by Unilateral Option..............................     29
         11.5     Dissolution upon Notice.......................................     29
         11.6     Financing Defaults............................................     29
         11.7     Winding Up....................................................     30
         11.8     Liquidation Proceeds..........................................     30

12.      INDEMNIFICATION AND INSURANCE..........................................     30

         12.1     Indemnification...............................................     30
         12.2     Insurance.....................................................     31
</TABLE>

                                      -ii-

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                    PAGE
<S>                                                                                 <C>
         12.3     Indemnification by the Unitholders............................     31
         12.4     Assertion of Claims...........................................     32

13.      MISCELLANEOUS..........................................................     32

         13.1     Governing Law.................................................     32
         13.2     Effectiveness.................................................     32
</TABLE>

EXHIBITS

Exhibit A         -    Articles of Incorporation of the Company

SCHEDULES

Schedule 2.1(b)   -    Committed Additional Capital Contributions
Schedule 5.3      -    Management and Operating Reports
Schedule 6.1      -    Capital Contributions
Schedule 8.3      -    Monthly Reports

                                     -iii-

<PAGE>

          OPERATING AGREEMENT of FLASH PARTNERS LTD., a Japanese limited
liability company (yugen kaisha), dated as of September 10, 2004, between
TOSHIBA CORPORATION, a Japanese corporation ("Toshiba"), and SANDISK
INTERNATIONAL LIMITED, a company organized under the laws of the Cayman Islands
( "SanDisk").

          WHEREAS, Flash Partners Ltd. (the "Company") is a Japanese limited
company (yugen kaisha);

          WHEREAS, pursuant to that certain Unit Purchase Agreement, dated as of
the date hereof, by and between SanDisk and Toshiba, concurrently with the
execution hereof, SanDisk has acquired from Toshiba 998 units par value Y5,000
per unit of contribution (shussi mochibun) in the Company ("Units"),
representing 49.9% of all issued and outstanding Units;

          WHEREAS, Toshiba holds the remaining 1,002 Units, representing 50.1%
of all issued and outstanding Units; and

          WHEREAS, SanDisk and Toshiba (each a "Unitholder") desire to enter
into this Operating Agreement in order to provide, subject to the Japan Act and
the Articles of Incorporation of the Company (as amended from time to time, the
"Articles") for (i) the business of the Company, (ii) the conduct of the
Company's affairs and (iii) the rights, powers, preferences, limitations and
responsibilities of the Company's Unitholders, employees and Directors.

          Accordingly, Toshiba and SanDisk agree as follows:

1.    DEFINITIONS, RULES OF CONSTRUCTION AND DOCUMENTARY CONVENTIONS

1.1   Certain Definitions.

(a)   Capitalized terms used but not defined in the main body of this Agreement
      shall have the respective meanings assigned to them in that certain Flash
      Partners Master Agreement, dated as of the date hereof, among SanDisk
      International Limited, SanDisk Corporation and Toshiba (the "Master
      Agreement") or in Appendix A to the Master Agreement.

(b)   As used herein, the term "Agreement" means this Operating Agreement
      together with any Exhibits, Schedules, Appendices and Attachments hereto.

1.2   Additional Definitions. The following capitalized terms used in this
      Agreement shall have the respective meanings assigned in the sections
      indicated below:

                                       1

<PAGE>

<TABLE>
<CAPTION>
           Term                                      Defined in
           ----                                      ----------
<S>                                                <C>
"Appendix A"                                       Recitals
"Articles"                                         Recitals
"Bankruptcy Event"                                 Section 11.1(f)
"Claim"                                            Section 12.4(a)
"Company"                                          Recitals
"Deadlock"                                         Section 10.3(c)
"Deadlock Dissolution Notice"                      Section 10.3(e)
"Defaulting Unitholder"                            Section 10.4
"Designated Individuals"                           Section 10.3(b)
"Director(s)"                                      Section 3.5(a)
"Executive Vice President"                         Section 5.2(a)
"General Meeting of Unitholders"                   Section 4.1(b)
"Indemnified Party"                                Section 12.4(a)
"Indemnifying Party"                               Section 12.4(a)
"Initiating Unitholder"                            Section 10.3(e)
"Losses"                                           Section 12.1(a)
"Master Agreement"                                 Section 1.1(a)
"Nondefaulting Unitholder"                         Section 10.4
"Notified Party"                                   Section 11.5
"Notifying Party"                                  Section 11.5
"Permissible Assignee"                             Section 9.1(c)
"Permissible Assignment Agreement"                 Section 9.1(c)
"President"                                        Section 5.2(a)
"Responding Unitholder"                            Section 10.3(e)
"SanDisk Representative"                           Section 5.3(a)
"Termination Date"                                 Section 11.4
"Toshiba Representative"                           Section 5.3(a)
"Units"                                            Recitals
"Unitholder"                                       Recitals
"Y3 Operating Committee"                           Section 5.3(a)
</TABLE>

1.3   Rules of Construction and Documentary Conventions. The rules of
      construction, documentary conventions and general terms and conditions set
      forth in Appendix A shall apply to, and are hereby incorporated in, this
      Agreement.

                                       2

<PAGE>

2.    GENERAL PROVISIONS

2.1   Ownership of Units; Capital Increase.

(a)   The rights and obligations of the Unitholders shall be as set forth
      herein, subject to the Articles and mandatory provisions of the Japan Act.

(b)   The Unitholders shall effect the capital increases in the amounts and at
      the times stipulated in Schedule 2.1(b).

2.2   Name. The name of the Company is "Flash Partners Yugen Kaisha," which
      translates to "Flash Partners Ltd." in English, and all Company business
      shall be conducted in that name or such other name as the Unitholders
      shall mutually agree.

2.3   Principal Office. The principal office of the Company shall be located in
      Yokkaichi, Mie, or such other place as the Unitholders shall mutually
      agree.

2.4   Term; Extension. The Company shall be terminated on December 31, 2019,
      unless extended by mutual written agreement of all of the Unitholders or
      earlier terminated in accordance with Section 11 (Dissolution). Any such
      extension shall be effective only upon the written agreement of all of the
      Unitholders and shall be on such terms and for such period as set forth in
      such agreement. The Unitholders agree to meet, no later than December 31,
      2018, to discuss the possible extension of the term of the Company.

2.5   Scope of Activity. The scope of activity of the Company shall be as set
      forth in Section 3.1 (Purpose) and 6.5 (Capacity Sharing Arrangement) of
      the Master Agreement.

2.6   Powers. The Company shall have all the powers now or hereafter conferred
      by applicable law on limited liability companies formed under the Japan
      Act and may do any and all acts and things necessary, incidental or
      convenient to the purpose specified in Section 2.5 (Scope of Activity).

2.7   Articles of Incorporation. On the date hereof and immediately following
      the execution of this Agreement, the Unitholders shall hold a general
      meeting of the Unitholders and, among other matters agreed between them,
      vote their Units to amend the Articles so that they will be in the form of
      Exhibit A. In the event of any conflict between this Agreement and the
      Articles, the Unitholders confirm their intent that the terms of this
      Agreement shall prevail, and on the request of either Unitholder, the
      Unitholders shall amend the Articles to conform with this Agreement to the
      extent legally possible; provided that the inability to implement such
      amendment shall not relieve any Unitholder from liability for any breach
      of its obligations hereunder.

2.8   Company Actions. The Unitholders hereby authorize the Company, and ratify
      (including for purposes of Section 4.1 (Matters Requiring the Approval of
      the Unitholders)) all action having been taken by or on behalf of the
      Company (including by its Unitholders and Directors) prior to the date
      hereof, to execute and deliver the FP Operative Documents to which it is a
      party, including all certificates, agreements and other documents required
      in connection therewith.

                                       3

<PAGE>

3.    BUSINESS OPERATIONS

3.1   Business Dealings with the Company. Subject to Sections 4.1(a) (Matters
      Requiring the Approval of the Unitholders) and 5.1(d) (Matters Requiring
      the Approval of the Board of Directors), the Company may enter into
      contracts or agreements, or otherwise enter into transactions or dealings,
      with any Unitholder or any of their respective Affiliates, and derive and
      retain profits therefrom. The validity of any such contract, agreement,
      transaction or dealing or any payment or profit related thereto or derived
      therefrom shall not be affected by any relationship between the Company
      and any Unitholder or any of their respective Affiliates, subject to the
      Japan Act. The Unitholders agree that where practicable and contractually
      allowable (based on competitive price, availability and other material
      terms), the Board of Directors will consider whether to utilize any
      Unitholder or any of their respective Affiliates as the preferred
      providers of products and services that may be required in the
      manufacturing operations of the Company, subject to the ability of such
      Unitholder or Affiliate to meet the Company's manufacturing requirements
      on competitive terms. Unless otherwise approved by the Unitholders or
      otherwise expressly provided in the FP Operative Documents, all business
      dealings of the Company with any Unitholder or any of their respective
      Affiliates shall be on the most beneficial standard commercial terms and
      conditions, including volume, price and credit terms, currently offered or
      made available to unaffiliated customers by such Unitholder or Affiliate,
      as the case may be, with respect to the products and services to be
      offered and provided to the Company.

3.2   Other Activities. The provisions of Section 6.11 (Other Activities) of the
      Master Agreement are hereby incorporated herein by reference.

3.3   Personnel. The provisions of Section 6.8 (FP Secondees) of the Master
      Agreement are hereby incorporated herein by reference.

3.4   Business Plans and Related Matters.

(a)   Initial and Subsequent Business Plans. The initial Business Plan of the
      Company, setting forth the Company's products, pricing, operating budget,
      capital expenditures, expense budgets, financing plans and other business
      activities of the Company through [***], will be agreed upon and certified
      by the Board of Directors as soon as practicable after the Closing.

      (i)   The initial Business Plan and each successive Business Plan will, at
            the time such Business Plan is in effect, represent the Company's
            then-current forecast of the proposed operations of the Company.

      (ii)  An updated Business Plan complying with Section 3.4(b) (Form and
            Scope) in respect of each successive Fiscal Year after the Fiscal
            year ending [***] shall be prepared under the direction of the Chief
            Executive Officer of the Company and submitted to the Board of
            Directors for review and approval not later than the [***] preceding
            the commencement of such Fiscal Year.

[***] 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.

                                       4

<PAGE>

      (iii) When the proposed Business Plan in respect of a Fiscal Year is
            approved by the Board of Directors, it shall constitute the Business
            Plan of the Company for such Fiscal Year and the Company and its
            directors and employees shall implement such Business Plan, which
            shall be the basis of the Company's operations for such Fiscal Year.
            Upon approval, the approved Business Plan shall constitute the
            approved operational, financing and capital expenditure budget. The
            Board of Directors shall have the authority pursuant to Section
            5.1(d) (Matters Requiring the Approval of the Board of Directors) to
            amend the most recently approved Business Plan, including the
            operating budget contained therein, and any Unitholder may request
            that the Board of Directors review the Company's operating results
            and prospects, as well as market conditions, and consider a proposal
            for amendment or review of the most recently approved Business Plan
            at any regularly scheduled or special meeting of the Board of
            Directors and upon such request, the Board of Directors shall in
            good faith make such review and/or consider such proposal.

(b)   Form and Scope. Each Business Plan shall contain a statement of long-range
      strategy and short-range tactics detailing quantitative and qualitative
      goals for the Company and relating the attainment of those goals to the
      Company's manufacturing objectives, and shall include such items as
      planned capital expenditures, planned product development, planned product
      output and projected product cost, sales forecasts, total headcount, total
      spending and revenue and profit projections, financing plans and tax
      planning. No Business Plan shall be deemed to be an amendment of this
      Agreement. Any capital commitments made in any Business Plan for a period
      after the Fiscal Year to which the Business Plan applies shall be
      considered non-binding for purposes of any FP Operative Document.

(c)   Approval. Other than the initial Business Plan (which shall be approved in
      accordance with Section 3.4(a)), the Board of Directors shall vote upon
      the proposed Business Plan, with such modifications as it may deem
      necessary, before [***] preceding the commencement of each Fiscal Year.
      Subject to Sections 10.3(c), (e) and (f) (Dispute Resolution; Deadlock),
      pending approval by the Board of Directors of any proposed Business Plan,
      the most recently approved Business Plan shall continue in effect;
      provided, however, the Board of Directors may, by unanimous vote, adopt an
      amended interim business plan for the Company's operations until it is
      able to reach agreement on the proposed Business Plan for the forthcoming
      year.

3.5   Standard of Care.

(a)   Each Unitholder, and each director of the Company, as defined in the Japan
      Act (each, a "Director"), shall be entitled to rely (unless such Person
      has knowledge or information concerning the matter in question that makes
      reliance unwarranted) on information, opinions, reports or statements,
      including financial statements and other financial data, if prepared or
      presented by:

[***] 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.

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      (i)   one or more managers or employees of the Company who such Unitholder
            or Director believes in good faith to be reliable and competent in
            the matters presented; or

      (ii)  legal counsel, public accountants or other Persons as to matters
            that such Unitholder or Director believes to be within such Person's
            professional or expert competence.

(b)   Each Unitholder shall also be entitled to rely upon information, opinions,
      reports or statements, including financial statements and other financial
      data, prepared or presented by the Board of Directors pursuant to the
      responsibilities delegated to the Board of Directors pursuant to this
      Agreement.

3.6   Use of Names. Except as may be expressly provided in the FP Operative
      Documents, nothing in this Agreement shall be construed as conferring on
      the Company or any Unitholder the right to use in advertising, publicity
      or other promotional activities any name, trade name, trademark or other
      designation of any other Unitholder or any of its Affiliates, including
      any contraction, abbreviation or simulation of any of the foregoing.

4.    ACTIONS BY THE UNITHOLDERS

4.1   Matters Requiring the Approval of the Unitholders.

(a)   Notwithstanding any provision of the Articles to the contrary, no action
      shall be taken by or on behalf of the Company in connection with any of
      the following matters without the prior unanimous written approval of the
      Unitholders:

      (i)   any amendment, restatement or revocation of the Articles;

      (ii)  any amendment to or renewal of any FP Operative Document between the
            Company and any Unitholder or any of their respective Affiliates;

      (iii) any change in the scope of activity or strategic direction of the
            Company's business;

      (iv)  any merger, consolidation or other business combination to which the
            Company or any of its Subsidiaries is a party, or any other
            transaction to which the Company is a party resulting in a Change of
            Control of the Company;

      (v)   any sale, lease, pledge, assignment or other disposition of assets
            of the Company in an amount (in terms of consideration to be
            received by the Company) in excess of Y5,000,000 in one
            transaction or a series of related transactions, other than as
            expressly provided for in the FP Operative Documents or as set forth
            in the most recently approved Business Plan;

      (vi)  the approval of any transaction or agreement between the Company and
            any Unitholder or any of their respective Affiliates (other than
            transactions or agreements expressly provided for or authorized by
            an FP Operative Document or

                                       6

<PAGE>

            the most recently approved Business Plan) or any amendment thereto
            (including the waiver of any material term thereof), other than any
            such transaction, agreement or amendment that contains generally
            available, arm's length commercial terms and is in an amount (in
            terms of payments to be made or the value of services or products to
            be provided or delivered) less than Y5,000,000 for any single
            transaction or agreement or for substantially identical transactions
            within a 24 month period (or a waiver that does not materially
            adversely affect the rights and benefits of the Company), other than
            as set forth in the most recently approved Business Plan;

      (vii) incurring Indebtedness in an amount in excess of Y1,000,000 or an
            increase in aggregate Indebtedness in excess of Y1,000,000 in any
            calendar quarter, other than as authorized by Section 5.1(d)
            (Matters Requiring the Approval of the Board of Directors);

     (viii) with respect to the Company or any of its Subsidiaries, (A) the
            voluntary commencement of any proceeding or the voluntary filing of
            any petition seeking relief under Japanese or foreign bankruptcy,
            insolvency, receivership or similar law, (B) the consent to the
            institution of, or the failure to contest in a timely and
            appropriate manner, any involuntary proceeding or any involuntary
            filing of any petition of the type described in clause (A) above,
            (C) the application for or consent to the appointment of a receiver,
            trustee, custodian, sequestrator, conservator or similar official
            for the Company, or for a substantial part of its property or
            assets, (D) the filing of an answer admitting the material
            allegations of a petition filed against the Company in any such
            proceeding described above, (E) the consent to any order for relief
            issued with respect to any such proceeding described above, (F) the
            making of a general assignment for the benefit of creditors, (G) the
            admission in writing of the Company's inability, or the failure of
            the Company generally, to pay its debts as they become due or (H)
            the taking of any action for the purpose of effecting any of the
            foregoing;

       (ix) subject to Section 9.1(a) and Appendix A, the granting of consent to
            the transfer of any Units;

        (x) the winding up, dissolution or liquidation of the Company or any of
            its Subsidiaries (other than the dissolution of the Company pursuant
            to and as contemplated by Section 11 (Dissolution));

       (xi) the acquisition of any business, entry into any joint venture or
            partnership, or creation of any direct or indirect Subsidiary of the
            Company;

      (xii) the commitment of the Company to any development project;

     (xiii) the sale, license, assignment or other Transfer of any of the
            Company's intellectual property owned or in its possession
            (including any technology or know-how, whether or not patented, any
            trademark, trade name or service mark, any copyright or any software
            or other method or process);

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<PAGE>

      (xiv) any increase or decrease in the capital amount of the Company,
            whether by increasing the number of the Units or increasing the par
            value per Unit or otherwise; and

      (xv)  any other matter material to the operation, staffing, business or
            financial condition of the Company.

(b)   Each Unitholder may exercise its vote by proxy; provided, that such proxy
      shall submit to the Company, prior to the relevant General Meeting of
      Unitholders, as defined in the Japan Act (the "General Meeting of
      Unitholders"), a power of attorney duly signed by the Unitholder and/or
      other document establishing its power of representation; and provided,
      further, that the conferment of the power of proxy for one General Meeting
      of Unitholders shall not be deemed to be a conferment of the power of
      proxy for any subsequent General Meeting of Unitholders.

(c)   Notwithstanding the requirements of Section 4.1(a) (Matters Requiring the
      Approval of the Unitholders) relating to agreements between the Company
      and any Unitholder or any of their respective Affiliates, any question
      regarding a material default or alleged material default (including any
      question regarding a breach of representation or alleged breach of
      representation) under any FP Operative Document between the Company and
      any Unitholder or any of their respective Affiliates shall be subject to
      the dispute resolution process set forth in Sections 10.3(a) and (b)
      (Dispute Resolution; Deadlock).

4.2   General Meetings of Unitholders.

(a)   An annual General Meeting of Unitholders shall be held within three (3)
      months from the date immediately following the last day of each Fiscal
      Year of the Company. A special General Meeting of Unitholders may be held
      at any time and may be called by a resolution of the Board of Directors or
      in any other manner permitted by the Japan Act or the Articles. All
      General Meetings of Unitholders shall be called and held in accordance
      with the Articles and the Japan Act. The General Meetings of Unitholders
      may be held at the Company's principal office or at any other location,
      or, if all the Unitholders agree, and to the extent then permitted by the
      Japan Act, by telecommunications conferences by means of which all persons
      participating in the meeting can hear and be heard by each other, provided
      that such communications equipment continues to be operational throughout
      the meeting. To the extent then permitted by the Japan Act, the
      Unitholders may by unanimous written consent effect any resolution that
      could otherwise be resolved at a meeting of the Unitholders.

(b)   Except as otherwise provided in this Agreement, each Unitholder shall be
      entitled to one vote for each Unit owned by such Unitholder.

(c)   The minutes of every General Meeting of Unitholders shall be kept with the
      Company's records referred to in Section 5.5 (Records).

(d)   The quorum necessary for any General Meeting of Unitholders shall be those
      Persons entitled to cast all of the votes held by the Unitholders. A
      quorum shall be deemed not to

                                       8

<PAGE>

      be present at any meeting for which notice was not properly given under
      the Articles or the Japan Act, unless the Unitholder as to whom such
      notice was not properly given attends such meeting without protesting the
      lack of notice or duly executes and delivers a written waiver of notice or
      a written consent to the holding of such meeting.

4.3   Restrictions on Unitholders. No Unitholder may, without the prior written
      consent of the other Unitholder:

(a)   confess any judgment against the Company;

(b)   enter into any agreement on behalf of or otherwise purport to bind the
      other Unitholder or the Company;

(c)   do any act in contravention of this Agreement;

(d)   except as contemplated by Section 11 (Dissolution), dispose of the
      goodwill or the business of the Company; or

(e)   assign the property of the Company in trust for creditors or on the
      assignee's promise to pay any Indebtedness of the Company.

5.    MANAGEMENT AND OPERATIONS OF COMPANY

5.1   Meetings of the Board of Directors.

(a)   General. Except as otherwise provided herein, the Board of Directors is
      vested with complete and exclusive power to direct and control the Company
      and to manage the Company as provided by the Articles and this Agreement,
      as it may be amended from time to time. The Board of Directors shall have
      the power to delegate such responsibilities as it may deem appropriate
      from time-to-time (including certain day-to-day responsibilities set forth
      in Section 5.2 (Officers; Employees) and Section 5.3 (Y3 Operating
      Committee)).

(b)   Members of the Board of Directors; Voting; etc.

      (i)   The Board of Directors of the Company shall consist of six (6)
            Directors, three (3) of which shall be nominated by Toshiba, and the
            other three (3) of which shall be nominated by SanDisk; provided
            that the total number of Directors of the Company may be changed by
            mutual agreement of the Unitholders. Each Unitholder shall vote its
            Units to elect as Directors those persons nominated by the other
            Unitholder.

      (ii)  Directors shall be elected to serve until complete adjournment of
            the annual meeting of Unitholders for the fiscal year last to end
            within one (1) year after his or her assumption of the directorship,
            and shall be eligible for re-election.

      (iii) Subject to the fiduciary duty of Directors under the Japan Act, each
            Director shall serve at the pleasure of the designating Unitholder
            and may be removed as such,

                                       9

<PAGE>

            with or without cause, and his successor designated, by the
            designating Unitholder. Each Unitholder shall have the right to
            designate a replacement Director in the event of any vacancy among
            such Unitholder's appointees. Each Unitholder shall vote its Units
            in favor of any such removal and in favor of any such replacement
            Director.

      (iv)  Each Unitholder shall bear any cost incurred by any Director
            nominated by it to serve on the Board of Directors, and no Director
            shall be entitled to compensation from the Company for serving in
            such capacity.

      (v)   Each Unitholder shall notify the other Unitholder and the Company of
            the name, business address and business telephone, e-mail address
            and facsimile numbers of each Director that such Member has
            nominated to the Board of Directors. Each Unitholder shall promptly
            notify the other Unitholder and the Company of any change in such
            Unitholder's nominated or of any change in any such address or
            number.

      (vi)  For purposes of any approval or action taken by the Board of
            Directors, each Director shall have one vote. Unless otherwise
            required under Japanese law, unanimous agreement is required for
            valid action to be taken by the Board of Directors.

      (vii) At any meeting of the Board of Directors, each Director may exercise
            his vote by proxy; provided, that such proxy shall submit to the
            Company, prior to the relevant meeting, a power of attorney duly
            signed by the Director and/or other document establishing its power
            of representation; and provided, further, that the conferment of the
            power of proxy for one meeting of the Board of Directors shall not
            be deemed to be a conferment of the power of proxy for any
            subsequent meeting of the Board of Directors.

     (viii) The quorum necessary for any meeting of the Board of Directors
            shall be those Directors entitled to cast all of the votes held by
            the members of the Board of Directors. A quorum shall be deemed not
            to be present at any meeting for which notice was not properly given
            under Section 5.1(c) (Meetings, Notices, etc.), unless the Director
            or Directors as to whom such notice was not properly given attend
            such meeting without protesting the lack of notice or duly execute
            and deliver a written waiver of notice or a written consent to the
            holding of such meeting.

(c)   Meetings, Notice, etc. Meetings of the Board of Directors shall be held at
      such location or locations as may be selected by the Board of Directors
      from time to time.

      (i)   Regular meetings of the Board of Directors shall be held on such
            dates and at such times as shall be determined by the Board of
            Directors and shall be held at least on a quarterly basis, unless
            otherwise agreed by the Directors.

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<PAGE>

      (ii)  Notice of any regular meeting or special meeting pursuant to Section
            5.1(c)(iii) shall be given to each Director at least ten (10)
            Business Days prior to such meeting in the case of a meeting in
            person or at least five (5) Business Days prior to such meeting in
            the case of a meeting by conference telephone or similar
            communications equipment pursuant to Section 5.1(c)(vii), which
            notice shall state the purpose or purposes for which such meeting is
            being called and include any supporting documentation relating to
            any action to be taken at such meeting.

      (iii) Special meetings of the Board of Directors may be called by any
            Director by notice given in accordance with the notice requirements
            set forth in Section 5.1(c)(ii); provided that the Directors
            appointed by the Unitholder that is not represented by the Director
            calling such special meeting shall be entitled to select a
            convenient location for the meeting and to suggest an alternative
            time or times if the designated time is not convenient for them. No
            action may be taken and no business may be transacted at such
            special meeting which is not identified in such notice unless (A)
            such action or business is incidental to the action or business for
            which the special meeting is called or (B) such action or business
            does not materially adversely affect any Unitholder or the Company.

      (iv)  Each Unitholder may invite a reasonable number of observers to all
            meetings of the Board of Directors.

      (v)   The minutes of each meeting of the Board of Directors shall be
            delivered to all Directors within twenty (20) calendar days after
            such meeting. Material to be presented at a Board of Directors
            meeting shall be delivered to all Directors ten (10) Business Days
            prior to such meeting if feasible in light of the circumstances
            giving rise to the need for such meeting, or in any event a minimum
            of five (5) Business Days prior to such meeting.

      (vi)  The actions taken by the Board of Directors at any meeting, however
            called and noticed, shall be as valid as though taken at a meeting
            duly held after regular call and notice if (but not until), either
            before, at or after the meeting, each Director as to whom such
            meeting was improperly held duly executes and delivers a written
            waiver of notice or a written consent to the holding of such
            meeting; provided, however, any Director who is present at a meeting
            and does not protest the failure of notice shall be deemed to have
            received adequate notice thereof. A vote of the Board of Directors
            may be taken only (A) at a meeting of the members thereof duly
            called and held or (B) without a meeting by the execution by the
            Directors eligible to cast all the votes on the Board of Directors
            of a consent setting forth the action so taken, and identified as a
            unanimous written consent of the Directors.

      (vii) Upon the consent of all Directors, a meeting of the Board of
            Directors may be held by conference telephone or similar
            communications equipment by means of which all Directors
            participating in the meeting can be heard by all other participants;
            provided that such communications equipment continues to be
            operational throughout the meeting. Any Director may elect to
            participate in a

                                       11

<PAGE>

            meeting by conference telephone or similar communications equipment
            upon sufficient advance notice to permit arrangements therefor to be
            made.

     (viii) At each meeting, the Board of Directors shall consider (A) any of
            the items set forth in Section 5.1(d) (Matters Requiring the
            Approval of the Board of Directors) that may require the Board of
            Directors' attention, (B) any items added to the Board of Directors'
            agenda for discussion by any Unitholder and (C) such other matters
            as the Board of Directors decides to review; provided, however, that
            the Directors shall not be required to vote or take other action
            (other than carrying on discussions) on matters that were not placed
            on the meeting agenda at least five (5) Business Days in advance of
            the time set for the meeting unless such action or business is
            incidental to the action or business which was otherwise properly on
            the agenda and considered at such meeting.

      (ix)  The Board of Directors shall, from time to time, elect one of its
            members to preside at its meetings. The Board of Directors may
            establish reasonable rules and regulations to (A) require officers
            to call meetings and perform other administrative duties, (B) limit
            the number and participation of observers, if any, and require them
            to observe confidentiality obligations and (C) otherwise provide for
            the keeping and distribution of minutes and other internal Board of
            Directors governance matters not inconsistent with the terms of this
            Agreement.

      (x)   Subject to the Japan Act, the Board of Directors shall have the
            authority to establish subcommittees and to delegate to any such
            subcommittee any of the Board of Directors' responsibilities;
            provided, however, the power of the Board of Directors to approve
            the matters set forth in Section 5.1(d) (Matters Requiring the
            Approval of the Board of Directors) may not be delegated to a
            subcommittee.

(d)   Matters Requiring the Approval of the Board of Directors. Notwithstanding
      any provision of the Articles to the contrary, no action may be taken by
      or on behalf of the Company in connection with any of the following
      matters without the unanimous written approval of the Board of Directors:

      (i)   any sale, lease, pledge, assignment or other disposition of assets
            of the Company in an amount (in terms of consideration to be
            received by the Company) in excess of Y1,000,000 in one
            transaction or a series of related transactions, other than as set
            forth in the most recently approved Business Plan;

      (ii)  the approval of any transaction or agreement between the Company and
            any Unitholder or any of their respective Affiliates (other than
            transactions or agreements expressly provided for or authorized by
            an FP Operative Document or the most recently approved Business
            Plan) or any amendment thereto (including the waiver of any material
            term thereof), other than any such transaction, agreement or
            amendment that contains generally available, arm's length commercial
            terms and is in an amount (in terms of payments to be made or the
            value of services or products to be provided or delivered) less
            than Y1,000,000 for any single transaction or agreement or for
            substantially identical transactions

                                       12

<PAGE>

            within a 24 month period (or a waiver that does not materially
            adversely affect the rights and benefits of the Company), other than
            as set forth in the most recently approved Business Plan;

      (iii) the purchase, lease, license or other acquisition of (A) personal
            property or services or (B) any list of capital equipment approved
            by the Unitholders, in each case in an amount (in terms of payments
            to be made or the value of services of products to be provided or
            delivered) exceeding Y1,000,000 in any one transaction or a series
            of related transactions, other than as provided for in the most
            recently approved Business Plan;

      (iv)  the selection of attorneys, accountants, auditors and financial
            advisors;

      (v)   the adoption of accounting and tax policies, procedures and
            principles;

      (vi)  incurring any Indebtedness;

      (vii) the hiring or termination of any employees referenced in Section
            5.2(a) (Officers; Employees) who are not FP Secondees, if any;

     (viii) the adoption of or changes to the forms of confidentiality,
            assignment or disclosure of intellectual property or employment
            agreements to be entered into between the Company and its employees;

      (ix)  the adoption of or changes to any employee benefit plan, including
            any incentive compensation plan;

      (x)   the amount and timing of any distributions;

      (xi)  the commencement or settlement of litigation by or against the
            Company;

      (xii) the purchase, sale or lease (as lessor or lessee) of any real
            property;

     (xiii) any acquisition of securities or any other ownership interest in
            any entity;

      (xiv) the making of any public announcements by or on behalf of the
            Company; provided, that in any case any such public announcements
            must otherwise comply with the requirements of Section 5.2 (Public
            Announcements) of the Master Agreement, if applicable;

      (xv)  the entry into or amendment of any collective bargaining
            arrangements or the waiver of any material provision or requirement
            thereof;

      (xvi) the approval of a proposed Business Plan, or the amendment to the
            most recently approved Business Plan, in each case including the
            operating budget contained therein;

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<PAGE>

     (xvii) the incurrence of capital expenditures in excess of those provided
            for in the most recently approved Business Plan or the commitment of
            the Company to any development projects other than as provided for
            in the most recently approved Business Plan;

    (xviii) subject to Section 5.1(c)(x), the establishment of any
            subcommittees or delegation of authority of the Board of Directors;

      (xix) the authorization and approval of any filing with, public comments
            to, or negotiation/discussion with, any Governmental Authority
            (excluding regular operating filings and other routine
            administrative matters);

      (xx)  the approval of Unique Activities to be performed by the Company at
            the request of any Unitholder, in connection with which the Board of
            Directors shall be satisfied that such Unitholder has reached
            agreement with the Company as to the payment by such Unitholder of
            all costs incurred in connection with such Unique Activities and
            that adequate provision has been made by such Unitholder for the
            funding of any additional required capital expenditures required in
            conjunction with such Unique Activities;

      (xxi) the decision of the Company to negotiate external sources of
            additional wafer fabrication capacity for NAND Flash Memory
            Products;

     (xxii) any dispute referred to the Board of Directors by the Y3 Operating
            Committee pursuant to Section 5.3(b); and

    (xxiii) such other matters as the Board of Directors decides, in its sole
            discretion, to review.

5.2   Officers; Employees.

(a)   Unless otherwise mutually agreed by the Unitholders, the Directors of the
      Company with specific titles shall be designated as: the Representative
      Director/President/Chief Executive Officer ("President") and the
      Representative Director/Executive Vice President ("Executive Vice
      President"). The President and Executive Vice President shall be elected
      by the Board of Directors and serve three successive one-year terms, with
      the first such set of terms ending at complete adjournment of the annual
      meeting of Unitholders for the fiscal year last to end within one (1) year
      after his or her assumption of the officership. Toshiba shall have the
      right to nominate the first President and SanDisk shall have the right to
      nominate the first Executive Vice President, and then the Unitholders will
      then alternate such nominating rights for each three year term for such
      positions. Each nominee for the President and for the Executive Vice
      President shall be subject to the consent of the non-nominating
      Unitholder, which consent shall not unreasonably be withheld. In addition
      to the President and Executive Vice President, the Board of Directors may
      appoint such other officers from time to time as it deems necessary or
      advisable in the conduct of the business and affairs of the Company. Any
      individual may hold more than one office.

                                       14

<PAGE>

(b)   The President shall have the authority to retain other senior management
      of the Company, subject to the prior approval of the Board of Directors.

(c)   The Company shall have agreements with and policies applicable to each of
      its officers, employees and consultants who are not FP Secondees, in forms
      acceptable to each Unitholder, and shall also have appropriate
      arrangements with its FP Secondees, in each case with respect to (i)
      protection of confidential information, (ii) patent and copyright
      assignment, (iii) invention disclosure (including improvements and
      advances) and assignments thereof and (iv) in respect of certain employees
      who are not FP Secondees, non-competition.

5.3   Y3 Representatives; Y3 Operating Committee.

(a)   The Company shall have an Operating Committee for Y3 Facility operations
      (the "Y3 Operating Committee") consisting of the general manager of Y3
      Facility, who Toshiba shall cause to be the deputy general manager of the
      Yokkaichi Facility (the "Toshiba Representative"), and a SanDisk
      representative, who shall represent SanDisk on a day-to-day basis at the
      Y3 Facility (the "SanDisk Representative"). SanDisk and Toshiba shall each
      have the sole right to appoint the SanDisk Representative and the Toshiba
      Representative, respectively; provided that each Unitholder shall notify
      the other Unitholder in advance of any replacement of its representative.
      If a Unitholder requests in good faith that the other Unitholder's
      representative be replaced with another person from the other Unitholder's
      organization, the other Unitholder shall consider and discuss in good
      faith with the requesting Unitholder such request, provided that such
      replacement, if any, shall be determined solely by such other Unitholder.
      SanDisk shall pay for all expenses of the SanDisk Representative related
      to his or her activities at the Y3 Facility, including salaries and
      traveling expenses. The Company shall pay for all expenses of the Toshiba
      Representative related to his or her activities in connection with the Y3
      Operating Committee or otherwise at the Y3 Facility, subject to anything
      to the contrary in the accounting standards and methodologies in the
      Master Agreement.

(b)   The Y3 Operating Committee shall work together and endeavor to make the Y3
      Facility the most advanced and competitive memory fabrication facility in
      the world. The Y3 Operating Committee shall have the authority to
      determine all matters concerning the day-to-day operations of the Company
      and the Y3 Facility, subject to those matters reserved herein to the Board
      of Directors or the Unitholders as well as to the requirements of this
      Agreement, the Articles and the Japan Act. The Y3 Operating Committee
      shall communicate on a day-to-day basis with respect to the status of Y3
      Facility operations and any other issues that may arise, and shall meet in
      person no less than two (2) times per week, or such other times and
      frequency as may be agreed upon by all members of such committee. If the
      members of the Y3 Operating Committee are unable to agree on any issue
      after thirty (30) days, they shall submit such matter together with their
      respective recommendations to the Board of Directors, which shall endeavor
      to immediately resolve the issue. If the Board of Directors is unable to
      agree on any such issue after ten (10) days, such issue shall be submitted
      to the Management Committee for final resolution.

                                       15

<PAGE>

(c)   The Y3 Operating Committee shall hold a monthly review meeting in English
      at the Yokkaichi Facility on [***] of each calendar month, unless
      otherwise agreed by the Unitholders or the Y3 Operating Committee. The Y3
      Operating Committee shall prepare and distribute to each Unitholder (at
      least three Business Days in advance of the monthly review meetings)
      monthly reports in English with respect to the engineering activities,
      operations and financial affairs of the Company and the Y3 Facility.

(d)   Upon the request of either Unitholder, the Y3 Operating Committee shall
      provide the Unitholders with (i) any management or operation reports of
      the Company related to the Y3 Facility (which neither Unitholder shall
      have an obligation to translate) and (ii) simultaneously in Japanese and
      English, those management and operating reports identified on Schedule 5.3
      as mutually agreed upon from time to time by the Parties. Upon reasonable
      request from SanDisk, Toshiba employees shall explain such reports to
      SanDisk's employees and respond to questions from SanDisk's employees;
      provided, however that SanDisk acknowledges and agrees that Toshiba shall
      not be responsible for SanDisk's failure to understand any such reports.

5.4   Insurance. The Company shall maintain insurance against such liabilities
      and other risks associated with the conduct by the Company of its business
      and in such amounts and against such risks as agreed by the Unitholders,
      and in any event as is generally maintained by companies engaged in a
      business similar to that of the Company.

5.5   Records. The Company shall maintain the following records at its principal
      office:

(a)   a current list of the full name set forth in alphabetical order and last
      known business address of each Unitholder and Director;

(b)   a copy of the Articles, and all articles of amendment thereto;

(c)   a copy of this Agreement and all amendments hereto;

(d)   a copy of all financial statements of the Company for the three most
      recent Fiscal Years;

(e)   a copy of the Company's income tax or information returns and reports, if
      any, for the three most recent years;

(f)   a copy of all indentures, loan agreements, lease agreements, guarantees,
      security agreements, promissory notes, licensing or other intellectual
      property agreements, agreements that relate to the payment or receipt by
      the Company of amounts in excess of Y5,000,000 or that are not
      terminable by the Company upon ninety (90) days notice, documents, if any,
      evidencing employee compensation arrangements, employee pension or other
      benefit arrangements, and similar documents and instruments executed and
      delivered by the Company;

(g)   a list of all contributions made to the Company by the Unitholders; and

[***] 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.

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(h)   a record of all distributions by the Company to each Unitholder.

The Unitholders and/or the Directors and/or their respective designees (which
shall be limited to its employees or professional advisers subject to
appropriate confidentiality obligations) shall have reasonable access to the
records during normal business hours upon reasonable request. Copies of records
shall be made available and delivered to the Unitholders and/or the Directors
promptly after reasonable request for same, provided the requesting party pays
for copy and delivery charges.

6.    CAPITAL CONTRIBUTIONS; DISTRIBUTIONS

6.1   Capital Contributions.

(a)   The Unitholders shall be deemed to have made Capital Contributions to the
      Company in the amounts set forth opposite their respective names on
      Schedule 6.1.

(b)   Except as provided in Section 2.1(b), no Unitholder shall be obligated to
      make any additional Capital Contributions to the Company, unless otherwise
      mutually agreed upon by the Unitholders in writing, in which case such
      additional Capital Contributions shall be made in proportion to the
      Unitholders' respective Percentages as of the date of such additional
      Capital Contribution.

6.2   Distributions.

(a)   General. Notwithstanding any provision of the Articles to the contrary,
      and subject to Section 11.8 (Liquidation Proceeds), unless otherwise
      agreed by the Unitholders, no distributions of cash (or in the case of
      Section 11.8, other property) shall be made by the Company to the
      Unitholders for a period of three (3) years from the date of this
      Agreement, and thereafter all distributions of cash (or, in the case of
      Section 11.8, other property) by the Company to the Unitholders shall be
      made in Japanese Yen at the times and in the amounts determined by the
      Board of Directors. Except as provided in Section 11.8, each distribution
      to the Unitholders shall be made on a pro rata basis based upon the
      respective Percentages of the Unitholders as of the date of such
      distribution.

(b)   Distribution for Taxes. Notwithstanding Section 6.2(a), subject to the
      Japan Act and other applicable law, the Company shall make, in respect of
      each Fiscal Year in which SanDisk must recognize taxable income of the
      Company in SanDisk's US federal, state and local income and franchise tax
      returns, a distribution to SanDisk to the extent necessary to meet
      SanDisk's aggregate US tax liability with respect to such taxable income,
      with such liability calculated at the highest US, state and local
      corporate tax rates as may be then applicable to SanDisk. SanDisk will
      make a request upon the Company for such distribution as soon as is
      practicable after the filing of SanDisk's applicable US tax returns.
      Following receipt of such request, the Company shall make the requested
      distribution on the next date on which the Company is permitted to make
      distributions pursuant to the Japan Act. Simultaneously therewith, the
      Company shall also make a distribution to Toshiba in an amount equal to
      the amount of the per Unit distribution made to SanDisk pursuant to this
      Section 6.2(b). Any such prior distributions shall be taken into account
      upon any purchase and sale of Units under Section 10 (Certain

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      Agreements of the Unitholders) or dissolution of the Company under Section
      11 (Dissolution) hereof. If necessary, the Board of Directors shall
      consider capital reductions to the extent that any such capital reduction
      will not adversely affect the Y3 Facility's operations.

6.3   No Interest. No interest shall be payable to the Unitholders on their
      Capital Contributions or otherwise in respect of the capital of the
      Company.

6.4   Return of Capital Contributions. Except as expressly provided herein, no
      Unitholder shall be entitled to the return of any part of such
      Unitholder's Capital Contributions.

7.    ADDITIONAL CONTRIBUTIONS

      No Unitholder shall be obligated under this Agreement or the Articles to
      contribute any additional amounts to the Company or otherwise to be liable
      for the debts and obligations of the Company.

8.    ACCOUNTING AND TAXATION

8.1   Financial Accounting Conventions.

(a)   The Company shall adopt and follow Japanese GAAP.

(b)   Notwithstanding anything to the contrary in Appendix A, the first Fiscal
      Year shall begin on April 1, 2004 and end on March 31, 2005.

(c)   The Company shall in principle (but subject to applicable Law) utilize a
      five-year straight line depreciation method for manufacturing equipment.

8.2   Maintenance of Books of Account. The Company shall keep or cause to be
      kept at its principal office, or such other location as the Board of
      Directors shall designate, full and complete books of account. The books
      of account shall be maintained in a manner that provides sufficient
      assurance that transactions of the Company are recorded so as to comply
      with all applicable laws and to permit (a) the preparation of the
      Company's consolidated financial statements in accordance with Japanese
      GAAP and (b) the Unitholders to account for their interest in the Company
      in accordance with Japanese GAAP.

8.3   Financial Statements.

(a)   Annual Statements. As soon as practicable following the end of each Fiscal
      Year (and in any event not later than fifty-two (52) days after the end of
      such Fiscal Year), the Company shall prepare and deliver to each
      Unitholder and each Director, audited consolidated and consolidating
      balance sheets of the Company as of the end of such Fiscal Year and the
      related audited consolidated and consolidating statements of operations,
      the Unitholders' capital accounts and cash flows of the Company for such
      Fiscal Year (or similar statements if such statements change as the result
      of changes in Japanese GAAP), together with appropriate notes to such
      consolidated financial

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      statements, and in each case setting forth in comparative form the
      corresponding figures for the preceding Fiscal Year and for the budget for
      the Fiscal Year just completed. Such financial statements shall be
      accompanied by (i) the report of the Accountants to the effect that such
      financial statements (except for the comparison to the budget) have been
      prepared in conformity with Japanese GAAP (except as otherwise specified
      in such report) and that the audit of such financial statements has been
      performed in accordance with Japanese GAAP and (ii) a report as to all
      transactions (including the nature, type and amount) between the Company
      and each Unitholder and their respective Affiliates. The Company shall
      conduct its business such that the report of the Accountants shall not
      contain any qualifications as to the scope of the audit or with respect to
      the Company's compliance with Japanese GAAP, except for changes in methods
      of accounting in which such Accountants concur and except that the
      foregoing shall not be deemed to obligate any Unitholder to contribute any
      capital to the Company. The Company shall also provide SanDisk with an
      English version of such report, which shall contain sufficient data to
      enable SanDisk to prepare a reconciliation of the Company's financial
      reports from Japanese GAAP to United States GAAP. The Company shall
      deliver to SanDisk, at SanDisk's request and expense, any other financial
      information related to the Company that is reasonably requested by SanDisk
      for US Federal, state, and local income or franchise tax purposes.

(b)   Quarterly Statements.

      (i)   As soon as practicable following the end of each Fiscal Quarter (and
            in any event not later than ten (10) days after the end of such
            Fiscal Quarter), the Company shall prepare and deliver to each
            Unitholder and each Director unaudited consolidated and
            consolidating balance sheets of the Company as of the end of such
            Fiscal Quarter and the related unaudited consolidated and
            consolidating statements of operations, the Unitholders' capital
            accounts and cash flows of the Company for such Fiscal Quarter and
            for the Fiscal Year to date (or similar statements if such
            statements change as the result of changes in Japanese GAAP), in
            each case setting forth in comparative form the corresponding
            figures for the preceding Fiscal Quarter, for the corresponding
            Fiscal Quarter of the preceding Fiscal Year and for the budget for
            the Fiscal Quarter just completed and for the Fiscal Year to date.

      (ii)  The financial statements for such Fiscal Quarter shall be
            accompanied by a certificate of the principal accounting or
            financial officer of the Company to the effect that such financial
            statements have been prepared under such officer's supervision and
            that, although such financial statements do not contain the
            footnotes and other disclosures required to be presented in interim
            financial statements by Japanese GAAP, such financial statements, in
            such officer's judgment, fairly present the financial condition and
            results of operations of the Company as of the date and for the
            periods indicated, subject to normal recurring year-end audit
            adjustments. The Company shall deliver to SanDisk, at SanDisk's
            request and expense, any other financial information related to the
            Company that is reasonably requested by SanDisk for US financial
            reporting or Federal, state, and local income or franchise tax
            purposes.

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<PAGE>

(c)   The Company shall obtain a professional tax audit from a qualified
      accountant complying with Japanese GAAP by May 22 of each year (including
      an English translation thereof). As part of its engagement of its
      auditors, the Company shall cause its auditors to provide such English
      language financial statements, audit reports, US GAAP reconciliations and
      consents as are required (or reasonably requested by SanDisk) in
      connection with SanDisk's filings with the United States Securities and
      Exchange Commission; provided that SanDisk shall pay for all the costs
      relating to such auditors' work. SanDisk may also request that the Company
      provide SanDisk with "comfort letters" in the manner customary for
      Japanese auditors in connection with public offerings in the United
      States, at SanDisk's own expense.

(d)   Monthly Reports. Each month, the Company shall prepare and deliver to each
      Unitholder and each Director the reports and other information set forth
      on Schedule 8.3. Such reports and other information will become available
      at the respective times set forth on Schedule 8.3.

(e)   Business Plan. Subject to Sections 10.3(c), (e) and (f), and provided that
      the most recently approved Business Plan does not provide for the next
      Fiscal Year, the Company shall, not later than [***] prior to the
      commencement of each Fiscal Year, deliver to each Unitholder a copy of the
      Business Plan, including the Company's monthly budgets, for the upcoming
      Fiscal Year, as approved by the Board of Directors.

(f)   Legal Proceedings. The Company shall promptly inform each Unitholder and
      each Director with regard to litigation, governmental investigations,
      material government notices and threatened legal proceedings.

8.4   Other Reports and Inspection. The Company shall furnish promptly to each
      Unitholder such other reports, financial data and information relating to
      the Company as such Unitholder may reasonably request and shall require
      the Accountants to provide to each Unitholder copies of any document
      related to the Company in the possession of the Accountants as such
      Unitholder may reasonably request. The Company shall, upon reasonable
      prior notice and during normal business hours, make available to each
      Unitholder and their respective professional advisors, from time to time
      as requested by such Unitholder, all properties, assets, books of account,
      corporate records, contracts and documentation, if any, relating to
      employee benefits of the Company, and any other material requested by such
      Unitholder for inspection and, in the case of books of account, corporate
      records, contracts and documentation, if any, relating to employee
      benefits, copying, and shall use reasonable efforts to make available to
      such Unitholder the Accountants and the key employees of the Company for
      interviews to verify any information furnished or to enable such
      Unitholder otherwise to review the Company and its operations. The Company
      may condition such availability upon the entering into of reasonable and
      appropriate confidentiality agreements. Notwithstanding the foregoing, the
      Company will not make available to any Unitholder information provided to
      the Company on a confidential basis by any other Unitholder without the
      consent of such other Unitholder.

[***] INDICATES THAT CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
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HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

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8.5   Characterization. For the purposes of US federal, state and local income
      and franchise taxation, the Unitholders intend that the Company shall be
      treated as a partnership at all times, and shall take all actions,
      including the execution of other documents required to be filed by the
      Code, as may be reasonably required to qualify for and receive treatment
      as a disregarded entity and as a partnership, as the case may be, for such
      US tax purposes. SanDisk shall bear all costs and expenses incurred by the
      Company or any Unitholder in connection with any action required to be
      taken pursuant to this Section. Notwithstanding the foregoing, the Company
      shall have no obligation to take any action under this Section that would
      have an adverse effect on it or any Unitholder under any Japanese
      Governmental Rule.

8.6   Deposit of Funds. All funds of the Company and its Subsidiaries not
      otherwise employed shall be deposited from time to time to its credit in
      such banks, trust companies or other depositories, or invested in such
      other investments held as cash equivalents, as the Board of Directors
      shall authorize. The funds of the Company and its Subsidiaries shall not
      be commingled with the funds of any Unitholder or any of their respective
      Affiliates.

9.    UNITS OF CONTRIBUTION; DISPOSITION OF UNITS

9.1   Restrictions on Transfer of Units.

(a)   No Unitholder (nor any permitted transferees of any Unitholder) may
      Transfer any interest in the Company, including any of such Unitholder's
      Units, to any Person, except by a Change of Control; provided, that any
      Unitholder may Transfer all of its interest in the Company, including all
      of its Units, to any one (1) of their respective Affiliates, with the
      prior written consent of every other Unitholder, which consent shall not
      be unreasonably withheld; and provided, further, that (i) the transferee
      agrees in writing to become a party hereto and assumes all the obligations
      of the transferring Unitholder hereunder and under each other FP Operative
      Document to which the transferring Unitholder is a party (except to the
      extent the express terms of the Patent Indemnification Agreement condition
      its transferability on the consent of the non-transferring Unitholder and
      such Unitholder has not consented to Transfer thereof), and (ii)
      immediately after giving effect to such Transfer, no Event of Default or
      an event or condition that with the giving of notice or lapse of time or
      both would constitute an Event of Default with respect to the transferee
      Unitholder shall exist. Following the effectiveness of any such Transfer,
      the transferring Unitholder shall no longer have the transferred right,
      title or interest in the Company or any rights under this Agreement and
      the transferee shall be substituted as a Unitholder for all purposes of
      this Agreement. The transferring Unitholder shall, however, remain
      responsible for all obligations under this Agreement and the other FP
      Operative Documents for any transferee which is an Affiliate of the
      transferring Unitholder and shall not be released or discharged from any
      existing liability or obligation to any Person. Any subsequent Transfer of
      an ownership interest in such Affiliate by the transferring Unitholder
      shall be deemed to constitute a Transfer of Units requiring compliance
      with this Section 9.1.

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<PAGE>

(b)   If a Unitholder Transfers its entire interest in the Company pursuant to
      Section 9.1(a), the transferee shall succeed to all the rights and
      obligations of such Unitholder under this Agreement.

(c)   Any Unitholder may agree to pay amounts equal to distributions received by
      such Unitholder from the Company to a third party in its sole discretion
      pursuant to a Permissible Assignment Agreement. "Permissible Assignment
      Agreement" means an agreement between a Unitholder and another Person (the
      "Permissible Assignee") which:

      (i)   provides for the grant by such Unitholder to the Permissible
            Assignee of the right to receive amounts equal to distributions
            received by such Unitholder from the Company pursuant to Section 6
            or 11 of this Agreement, but does not give the Permissible Assignee
            any Units or any other rights whatsoever with respect to the
            Company;

      (ii)  provides that under no circumstances (including any Bankruptcy Event
            in respect of such Unitholder) may any claim be made by the
            Permissible Assignee against the Company or any such Unitholder or
            any Affiliate of any such Unitholder or any of their respective
            assets, under or in connection with such agreement, even if such
            Unitholder defaults in performance thereunder;

      (iii) provides that the rights of the Permissible Assignee under such
            agreement may not be transferred without the prior written consent
            of each Unitholder and that any such Transfer without such consents
            shall be null and void;

      (iv)  may not be amended, nor any provision thereof waived, in a manner
            that would cause it not to be a Permissible Assignment Agreement,
            without the prior written consent of the non-assigning Unitholder;

      (v)   provides that the assigning Unitholder is authorized to Transfer its
            entire interest in the Company pursuant to Section 9.1(a) free and
            clear of any interest of the Permissible Assignee and without any
            liability on the part of the transferee thereunder to the
            Permissible Assignee; and

      (vi)  contains an express acknowledgment by the Permissible Assignee, for
            the benefit of the non-assigning Unitholder and the Company, to the
            effect of clauses (i)-(v) above.

      The assigning Unitholder shall ensure that any payment due to a
      Permissible Assignee pursuant to or in connection with a Permissible
      Assignment Agreement shall be made in full to such Permissible Assignee
      when due.

9.2   Admission of New Unitholders. No Person shall have the right to become a
      Unitholder unless and until all the following conditions are satisfied:

(a)   except in the case of a Transfer of all of a Unitholder's Units to an
      Affiliate of such Unitholder in accordance with Section 9.1(a)
      (Restrictions on Transfer of Units), such Person, the terms and conditions
      of such Person's admission as a Unitholder and the

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<PAGE>

      rights appurtenant to the Units to be issued or Transferred, as
      applicable, to such Person are approved by all existing Unitholders and,
      if applicable, the creation of any new class or group of Units in the
      Company having different rights, powers and duties is reflected in
      amendments to the Articles and to this Agreement;

(b)   such Person executes a counterpart of this Agreement and such other
      instrument or instruments as the Company and a non-transferring Unitholder
      may reasonably deem appropriate to affirm that the representations and
      warranties contained in the Master Agreement are true and correct with
      respect to such Person and that such Person agrees to be bound as a
      Unitholder by this Agreement and all of the covenants and agreements
      herein; and

(c)   if requested by the Company, an opinion of counsel, a purchaser
      representation letter or other appropriate documentation is furnished to
      the Company establishing that the issuance or Transfer, as applicable, of
      Units to the new Unitholder will comply with the Japan Act.

      Except to the extent required by law, the Company shall have no obligation
      to recognize or to furnish information or make distributions to any new
      Unitholder or any transferee of a Unitholder who does not become a
      Unitholder in accordance with Section 9.1 (Restrictions on Transfer of
      Units) or this Section 9.2.

9.3   Withdrawal Prohibited. Except as otherwise expressly permitted by this
      Agreement, (i) no Unitholder may withdraw from the Company and (ii) no
      Unitholder may effect or cause a termination or dissolution of the Company
      without the prior written consent of all other Unitholders (which consent
      may be withheld in such other Unitholder's sole discretion).

9.4   Purchase of Additional Interest. At any time during the term of this
      Agreement and so long as SanDisk is a Unitholder, SanDisk shall have the
      right to purchase from Toshiba that number of Units which is equal to 0.1%
      of the total number of Units then issued and outstanding in the event that
      (i) Toshiba's patent umbrella does not adequately protect the Company or
      (ii) dissolution of the Company is commenced pursuant to Section 11
      hereof. The purchase price of such Units shall equal 0.1% of the Company's
      Net Book Value as of the date of such transaction.

10.   CERTAIN AGREEMENTS OF THE UNITHOLDERS

10.1  Taxes and Charges; Governmental Rules. Each Unitholder shall (a) promptly
      pay all applicable Taxes and other governmental charges imposed against
      such Unitholder except to the extent any such Taxes or other charges are
      being contested in good faith by appropriate proceedings and (b) comply
      with all applicable Governmental Rules, in each case except to the extent
      that nonpayment or noncompliance will not have a material adverse effect
      on the Company.

10.2  Further Assurances. Following the Closing, each Unitholder shall, and
      shall cause its Affiliates and the Company to take all reasonable actions
      necessary or appropriate to, effectuate the transactions contemplated by
      this Agreement, and to obtain (and cooperate

                                       23

<PAGE>

      with the other Unitholder in obtaining) any Governmental Action or third
      party consent required to be obtained or made by it in connection with the
      transactions contemplated by this Agreement; provided, that no Burdensome
      Condition shall be made to exist with respect to such Unitholder or any of
      its Affiliates in connection therewith.

10.3  Dispute Resolution; Deadlock.

(a)   The Unitholders shall endeavor to settle, through their respective
      designees to the Board of Directors, any disputes which may arise between
      them, including without limitation, failure by the Board of Directors to
      reach agreement (or failure to take a vote) on any matter requiring Board
      of Directors approval pursuant to Section 5.1(d) (Matters Requiring the
      Approval of the Board of Directors). The Unitholders shall attempt to
      resolve the issue or proposed action in question, to the extent
      practicable, in a manner consistent with the Company's most recently
      approved Business Plan, unless the issue in dispute is the adoption of a
      new Business Plan, in which case the provisions of Sections 10.3(c), (e)
      and (f) shall apply.

(b)   If (i) the Unitholders are unable to agree on any matter requiring the
      approval of the Unitholders pursuant to Section 4.1(a) (Matters Requiring
      the Approval of the Unitholders), (ii) the Board of Directors is unable to
      agree on any matter requiring the approval of the Board of Directors
      pursuant to Section 5.1(d) (Matters Requiring the Approval of the Board of
      Directors) (other than the approval of any Business Plan, with respect to
      which the failure to agree shall be governed by Sections 10.3(c), (e) and
      (f)) or (iii) the Unitholders or the Board of Directors are otherwise
      unable to resolve a dispute on any other item (other than the approval of
      any Business Plan, with respect to which the failure to agree shall be
      governed by Sections 10.3(c), (e) and (f)), then any Unitholder may bring
      the matter to the attention of the General Manager Memory Division,
      Semiconductor Company of Toshiba, and the Chief Operating Officer of
      SanDisk (the "Designated Individuals"), who will attempt to find a
      resolution. If the matter has not been resolved within thirty (30) days of
      referral to the Designated Individuals, the matter will be referred to the
      Management Committee for a final decision, which decision will be final
      and binding on the Company and the Unitholders with respect to any matter
      specified in Sections 10.3(b)(i) and (ii) above. If an agreement is
      reached by the Management Committee, the mutually agreed resolution shall
      be implemented by the Company. Should no solution be agreed upon within
      thirty (30) days after submission of the matter to the Management
      Committee with respect to the matters specified in (iii) above, such
      matter shall be submitted to arbitration in accordance with Section 2.5 of
      the Appendix A. Should no solution be agreed upon within sixty (60) days
      after submission of the matter to the Management Committee with respect to
      the matters specified in Sections 10.3(b)(i) and (ii) above, then the
      action for which approval was requested will not occur, unless it is
      already included in the most recently approved Business Plan.

(c)   Except as provided below, if by [***] of any calendar year during the term
      of this Agreement, commencing [***], the Board of Directors and the
      Unitholders have not approved and agreed upon a Business Plan for the
      upcoming Fiscal Year, then any Unitholder may refer the dispute to the
      Management Committee for a decision, which

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      decision shall be final and binding on the Company and the Unitholders. If
      a decision is reached by agreement of the Management Committee, such
      decision shall be implemented by the Company. Should no decision be
      reached within ninety (90) days after submission of the matter to the
      Management Committee, and unless the Unitholders have agreed to continue
      operations under the most recently approved Business Plan until a new
      Business Plan is approved, then within ten (10) Business Days thereafter
      any Unitholder may elect by written notice to all other Unitholders to
      declare a deadlock ("Deadlock"), except with respect to any issue where
      the Master Agreement expressly prohibits declaration of a Deadlock.

(d)   If demand for both Unitholder's NAND Flash Memory Products is
      significantly below expectations, they shall address the matter as
      contemplated in Section 6.5(b)(ii) of the Master Agreement.

(e)   Within thirty (30) days after a Unitholder has notified the other
      Unitholder of a Deadlock, either Unitholder (the "Initiating Unitholder")
      may submit to the other Unitholder (the "Responding Unitholder") a written
      irrevocable notice (the "Deadlock Dissolution Notice") to the effect that
      the Initiating Unitholder offers to sell to the Responding Unitholder or
      its designee the Initiating Unitholder's Units for a cash payment, by wire
      transfer of immediately available Japanese Yen, in an amount equal to the
      [***] as of the date of such transaction multiplied by the Initiating
      Unitholder's Percentage as of such date.

(f)   The Responding Unitholder may accept such offer by written response to the
      Initiating Unitholder within forty-five (45) days of receipt of the
      Deadlock Dissolution Notice indicating that the Responding Unitholder
      elects to purchase the Units of the Initiating Unitholder. If the
      Responding Unitholder declines to exercise its right to purchase the Units
      of the Initiating Unitholder pursuant to this Section 10.3 or fails to
      respond to such Deadlock Dissolution Notice (or if both Unitholders submit
      Deadlock Dissolution Notices), the Company shall be dissolved pursuant to
      Section 11.1(d) (Events of Dissolution), at the end of a one-year period
      for the wind-down of operations commencing with the receipt of the
      Deadlock Dissolution Notice by the Responding Unitholder. During such
      one-year period, the Company's business shall be conducted in accordance
      with the most recently approved Business Plan except that additional
      capital expenditures will not be made except as required for line
      maintenance.

10.4  Remedies Upon Event of Default; Termination on Breach. If there has
      occurred and is continuing an Event of Default with respect to a
      Unitholder (upon such occurrence, such Unitholder is referred to herein as
      the "Defaulting Unitholder"), in addition to all other remedies available
      to the Company or the other Unitholder (the "Nondefaulting Unitholder"),
      whether under any of the FP Operative Documents or other agreements or by
      law, the Nondefaulting Unitholder shall have the option to take one or
      more of the following actions:

(a)   give written notice to the Defaulting Unitholder of its intention to
      acquire all of the Units of the Defaulting Unitholder for a cash payment,
      by wire transfer of immediately available Japanese Yen, in an amount equal
      to the [***] of the Company as of the date of

[***] INDICATES THAT CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
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<PAGE>

      such transaction multiplied by the Defaulting Unitholder's Percentage as
      of such date; and/or

(b)   elect to dissolve the Company pursuant to Section 11.3 (Dissolution Upon
      Event of Default), in which case the affairs of the Company shall be wound
      up and the Company shall be dissolved in accordance with Section 11
      (Dissolution).

10.5  Mechanics of Sale.

(a)   The closing of any purchase and sale of Units pursuant to Section 10.3
      (Dispute Resolution; Deadlock), 10.4 (Remedies Upon Event of Default;
      Termination on Breach), 11.4 (Dissolution by Unilateral Option) or 11.5
      (Dissolution Upon Notice) shall take place not later than the [***]
      Business Day after notice of the purchase is given, as the case may be,
      except that such period shall be extended as necessary in order to comply
      with any Governmental Rule. The purchasing Unitholder shall pay for the
      Units being acquired by wire transfer of immediately available funds in
      Japanese Yen to an account specified by the selling Unitholder. The
      selling Unitholder shall execute all documents necessary to effect the
      conveyance of its Units, free and clear of all Liens, to the purchasing
      Unitholder. In addition, the Unitholders shall enter into an indemnity and
      release agreement, in a form reasonably satisfactory to each Unitholder,
      indemnifying and holding harmless the selling Unitholder and its
      Affiliates for liabilities or claims made after the date of the purchase
      and sale under any guarantees or other agreements supporting the
      obligations of the Company which may have been extended by the selling
      Unitholder or any of its Affiliates. The Unitholders shall also reach
      agreement on a reasonable transition plan of up to six months in
      connection with services provided to the Company by FP Secondees assigned
      to the Company by the Selling Unitholder.

(b)   If a Unitholder elects to acquire all of the Units of the other Unitholder
      pursuant to Section 10.3 (Dispute Resolution; Deadlock), 10.4 (Remedies
      Upon Event of Default; Termination on Breach), 11.4 (Dissolution by
      Unilateral Option) or 11.5 (Dissolution Upon Notice), such Unitholder
      shall be obligated to take all actions required of it to consummate the
      applicable purchase and sale on the date determined pursuant to this
      Section 10.5 (Mechanics of Sale). If any Unitholder has the right to
      purchase the Units of any other Unitholder, such Unitholder shall have the
      right to assign such right to purchase to any other Person.

11.   DISSOLUTION

11.1  Events of Dissolution. The Company shall be dissolved and shall commence
      winding up its affairs upon the first to occur of the following:

(a)   the expiration of the term of the Company pursuant to Section 2.4 (Term;
      Extension);

(b)   the agreement of the Unitholders to dissolve the Company pursuant to
      Section 11.2 (Dissolution by Agreement);

[***] INDICATES THAT CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
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(c)   the election of the Nondefaulting Unitholder pursuant to Section 11.3
      (Dissolution Upon Event of Default);

(d)   the first anniversary of the receipt by either Unitholder of a Deadlock
      Dissolution Notice submitted with respect to a failure of the Unitholders
      to approve and agree upon a Business Plan pursuant to Section 10.3
      (Dispute Resolution; Deadlock) if either (i) the Responding Unitholder
      declines to exercise its right to purchase the Units of the Initiating
      Unitholder or fails to respond to such Deadlock Dissolution Notice, or
      (ii) both Unitholders submit Deadlock Dissolution Notices with respect to
      such failure to agree;

(e)   the election by Toshiba to dissolve the Company pursuant to Section 11.4
      (Dissolution by Unilateral Option);

(f)   the bankruptcy, death, dissolution, expulsion or incapacity of a
      Unitholder or the occurrence of any other event which terminates the
      membership of a Unitholder in the Company ("Bankruptcy Event"); or

(g)   the election of the Notifying Party to dissolve the Company pursuant to
      Section 11.5 (Dissolution Upon Notice) unless the Notified Party elects to
      purchase the Units of the Notifying Party pursuant to Section 11.5
      (Dissolution Upon Notice).

11.2  Dissolution by Agreement. The Company may be dissolved at any time by the
      unanimous written consent of the Unitholders.

11.3  Dissolution Upon Event of Default. During the occurrence and continuation
      of an Event of Default (other than a Bankruptcy Event) with respect to a
      Unitholder, the Nondefaulting Unitholder may elect, by written notice to
      the Defaulting Unitholder, to dissolve the Company, in which event the
      Company shall be dissolved and the Unitholders shall take all actions
      necessary to wind up the affairs of the Company in accordance with Section
      11.7 (Winding Up). This Section 11.3 shall not be construed to limit the
      rights of the Nondefaulting Unitholder under Section 10.4 (Remedies Upon
      Event of Default) or to seek damages from the Defaulting Unitholder or any
      other Person for the breach of its obligations under any of the FP
      Operative Documents.

11.4  Dissolution by Unilateral Option. At any time between April 1, 2007 and
      March 31, 2008, SanDisk may, by giving written notice to Toshiba, elect to
      withdraw from the

      Company, in which case Toshiba must, directly or through any of its
      Affiliates, either (i) purchase from SanDisk all of SanDisk's Units within
      one (1) year following SanDisk's notice to withdraw for a cash payment, by
      wire transfer of immediately available Japanese Yen, in an amount equal to
      the [***] of the Company as of the FP Termination Date multiplied by
      SanDisk's Percentage as of the Termination Date (the estimated [***] of
      the Company as of the Termination Date to be agreed by the Unitholders in
      good faith and any necessary true up payments promptly after the actual
      [***] of the Company as of the Termination Date is determined), or (ii)
      cooperate with SanDisk to dissolve the Company within one (1) year of the
      notice of withdrawal and to wind-up its affairs in accordance with Section
      11.7 (Winding Up) (the date as of which any Unitholder, itself

[***] INDICATES THAT CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
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                                       27
<PAGE>

      or together with its Affiliates, holds all Units of the Company or the
      date the Company is dissolved in accordance with applicable Law, the
      "Termination Date," but in no event shall the Termination Date occur later
      than one (1) year following SanDisk's notice to withdraw).

11.5  Dissolution upon Notice. At any time between April 1, 2011 and March 31,
      2012, any Unitholder (the "Notifying Party") may elect, by giving notice
      to all other Unitholders (the "Notified Party"), to dissolve the Company,
      in which event the Company will be dissolved and, within the one (1) year
      period following the giving of such notice, the Unitholders shall mutually
      agree upon a plan for winding up the affairs of the Company in accordance
      with Section 11.7 (Winding Up), unless the Notified Party, directly or
      through any of its Affiliates, elects in writing within three (3) months
      of receiving such notice, to purchase from the Notifying Party all of its
      Units for a cash payment, by wire transfer of immediately available
      Japanese Yen, in an amount equal to the [***] of the Company as of the
      date of such transaction multiplied by the Notifying Party's Percentage as
      of such date.

11.6  Financing Defaults.

(a)   If pursuant to Section 6.3(c)(i) of the Master Agreement either Party, as
      the Investing Party, exercises its election to terminate this Agreement,
      the Unitholders shall cooperate in good faith to effect the purchase by
      Toshiba (or its designated Affiliate) and sale by SanDisk of all of
      SanDisk's Units, at a price equal to SanDisk's percentage share of the
      issued and outstanding Units in the Company multiplied by the [***] of the
      Company as of the date such transaction is closed (with estimated [***] as
      agreed by the Unitholders in good faith paid on the closing of such
      transaction and any true-up payment made by the appropriate Party promptly
      after determination of the actual [***] of the Company as of the closing
      of such purchase and sale transaction).

(b)   [***]

(c)   If pursuant to Section 6.10(d)(ii) of the Master Agreement either Party,
      as the Non-Defaulting Party, exercises its election to terminate this
      Agreement, the Non-Defaulting Party shall have the same rights as provided
      in Section 11.6(a) and the Unitholders shall cooperate in good faith to
      effect the purchase by the Non-Defaulting Party (or its designated
      Affiliate) and sale by the Defaulting Party of all of the Defaulting
      Party's Units.

11.7  Winding Up.

(a)   Upon the dissolution of the Company, the Unitholders shall proceed as
      promptly as practicable to (i) wind-up the affairs of the Company and
      satisfy the Company's liabilities, (ii) dispose of the Company's assets as
      quickly as possible consistent with obtaining the full fair market value
      of the Company, preferably, to the extent it is commercially practicable
      to do so, by selling the Company as a going concern (provided, however, no
      Unitholder shall be under any obligation to extend the terms of any FP
      Operative Document or to offer to enter into any other agreement with a
      prospective

[***] INDICATES THAT CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
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                                       28
<PAGE>

      purchaser of the Company for the purchase or sale of goods or services or
      the use of facilities or any other business arrangement), and (iii)
      distribute any net proceeds to the Unitholders in accordance with Section
      11.8 hereof and applicable Law. In connection with a sale of the Company's
      assets under clause (ii), each Unitholder or any of their respective
      Affiliates shall have a right of first offer to acquire the Company's
      tangible personal property in the liquidation process and may also acquire
      such property through participation at auction except in the event of a
      dissolution pursuant to Section 11.3 (Dissolution Upon Event of Default),
      in which event the Defaulting Unitholder and its Affiliates shall not have
      such right of first offer to acquire the Company's tangible personal
      property. Each of the Unitholders shall be furnished with a statement
      setting forth the assets and liabilities of the Company as of the date of
      the complete liquidation of the Company. The Accountants shall review the
      final accounting and shall render their opinion with respect thereto.

(b)   During the period of winding-up, the Company shall continue to operate and
      all the provisions of this Agreement shall remain in effect, except as
      otherwise expressly provided herein. The Company shall notify all known
      creditors and claimants of the dissolution of the Company in accordance
      with applicable law.

11.8  Liquidation Proceeds.

(a)   In the case of the dissolution and liquidation of the Company, the Company
      may make a distribution in kind. Any cash and all distributions in kind
      that are to be distributed shall be distributed to the Unitholders, on a
      pro rata basis based upon the respective Percentages of the Unitholders as
      of the date of such distribution.

(b)   Unless otherwise agreed by the Unitholders, and to the extent permitted
      under any agreements with third parties, all assets to be distributed upon
      the dissolution and liquidation of the Company shall be distributed as
      follows:

      (i)   first, to creditors, including Unitholders who are creditors, to the
            extent permitted by law, in satisfaction of liabilities of the
            Company, other than for distributions to Unitholders pursuant to
            Section 6.2 (Distributions); and

      (ii)  second, to the Unitholders on a pro rata basis based upon the
            respective Percentages of the Unitholders as of the date of such
            distribution.

For purposes of this Section 11.8, instruments of transfer and other documents
reasonably requested by the distributee shall be executed by the Company or the
other Unitholder, or both.

(c)   Any distribution made pursuant to this Section 11.8 shall be made as soon
      as practicable under and in accordance with applicable Japanese law.

12.   INDEMNIFICATION AND INSURANCE

12.1  Indemnification.

                                       29
<PAGE>

(a)   Subject to Section 12.1(c), the Company shall indemnify each Person who
      was or is a party or is threatened to be made a party to any threatened,
      pending or completed action, suit or proceeding, whether civil, criminal,
      administrative or investigative (including an action by or in the right of
      a Unitholder or the Company), by reason of the fact that such Person is or
      was a Unitholder or is or was or has agreed to become a Director or is or
      was serving or has agreed to serve at the request of the Company as a
      director, officer, employee or agent of the Company or of another
      partnership, corporation, joint venture, trust or other enterprise,
      arising from any action alleged to have been taken in any such capacity or
      by reason of any liability or obligation of the Company, against any and
      all losses, damages, liabilities, costs, charges, expenses (including
      interest, penalties and reasonable attorneys' fees and expenses),
      judgments, fines and amounts paid in settlement (collectively, "Losses")
      actually and reasonably incurred by him or on his behalf in connection
      with such action, suit or proceeding and any appeal therefrom. Without
      limiting the generality of the foregoing, any of such Losses shall be
      deemed to arise out of a Company liability or obligation if it arises out
      of or is based upon the conduct of the business of the Company (or any of
      its Subsidiaries) or the ownership of the property of the Company (or any
      of its Subsidiaries).

(b)   The indemnification provided under this Section 12.1 shall inure to the
      benefit of the successors, heirs and personal representatives of any
      Person entitled to the benefit of such indemnification. Such
      indemnification shall be a contract right and shall include the right to
      be paid advances of reasonable expenses incurred by any such Person in
      connection with such action, suit or proceeding.

(c)   The indemnification provided under this Section 12.1 shall not inure to
      the benefit of any Person in respect of Losses to the extent that such
      Losses (i) arise out of or are based upon the gross negligence or willful
      misconduct of such Person or (ii) constitute a tax, levy or similar
      governmental charge not imposed upon the Company (or any of its
      Subsidiaries) or on their respective properties. The indemnification
      provided under this Section 12.1 shall also not be available to any Person
      in respect of any Losses if a judgment or other final adjudication adverse
      to such Person establishes (x) that such Person's acts were committed in
      bad faith or were the result of active and deliberate dishonesty and were
      material to the cause of action so adjudicated or (y) that such Person
      gained in fact a financial profit or other advantage to which such Person
      was not legally entitled. It is understood and agreed that, for the
      purposes of this Section 12.1, Losses shall be deemed not to arise out of
      or be based upon the gross negligence or willful misconduct of a Person
      solely because it arises out of or is based upon the gross negligence,
      willful misconduct, bad faith or active and deliberate dishonesty of a
      director, officer or employee of such Person if at the time of such gross
      negligence, willful misconduct, bad faith or active and deliberate
      dishonesty, such director, officer or employee was also a FP Secondee or a
      Director acting in his capacity as such.

(d)   The termination of any action, suit or proceeding by judgment, order,
      settlement, conviction or upon a plea of nolo contendere or its equivalent
      shall not, of itself, create a presumption that the indemnified Person did
      not meet the standard set forth in Section 12.1(c) (Indemnification).

                                       30
<PAGE>

12.2  Insurance. The Company may, to the fullest extent permitted by law,
      purchase and maintain insurance against any liability that may be asserted
      against any Person entitled to indemnity pursuant to Section 12.1.

12.3  Indemnification by the Unitholders.

(a)   Each Unitholder agrees to, and does hereby, indemnify and hold harmless
      the Company and the other Unitholder from and against any and all Losses
      arising out of, or based upon, the gross negligence or willful misconduct
      of such Unitholder under this Agreement or such Unitholder exceeding its
      authority under this Agreement.

(b)   The provisions of this Section 12.3 shall survive each of the termination
      of this Agreement, the dissolution of the Company and the withdrawal of
      any Unitholder.

12.4  Assertion of Claims.

(a)   In the event that a Person (the "Indemnified Party") desires to assert its
      right to indemnification from a Person (an "Indemnifying Party") required
      to indemnify such Indemnified Party under this Section 12, the Indemnified
      Party will give the Indemnifying Party prompt notice of the claim giving
      rise thereto (a "Claim"), and the Indemnifying Party shall undertake the
      defense thereof (unless the Claim is asserted against or related to or
      results from any action or failure to take action by such Indemnifying
      Party). The failure to promptly notify the Indemnifying Party hereunder
      shall not relieve the Indemnifying Party of its obligations hereunder,
      except to the extent that the Indemnifying Party is actually prejudiced by
      the failure to so notify promptly.

(b)   The Indemnified Party shall not settle or compromise any Claim without the
      written consent of the Indemnifying Party unless the Indemnified Party
      agrees in writing to forego any and all claims for indemnification from
      the Indemnifying Party with respect to such Claim. However, if the
      Indemnifying Party, within a reasonable time after notice of any such
      Claim, fails to defend such Claim, the Indemnified Party shall have the
      right to undertake the defense, compromise or settlement of such Claim on
      behalf of and for the account and risk of the Indemnifying Party, subject
      to the right of the Indemnifying Party to assume the defense of such Claim
      at any time prior to settlement, compromise or final determination
      thereof.

(c)   If the Indemnifying Party has undertaken the defense of a Claim and (i) if
      there is a reasonable expectation that (x) a Claim may materially and
      adversely affect the Indemnified Party other than as a result of money
      damages or other money payments or (y) the Indemnified Party or
      Unitholders may have legal defenses available to it or them that are
      different from or additional to the defenses available to the Indemnifying
      Party, or (ii) if the Indemnifying Party shall not have employed counsel
      reasonably satisfactory to the Indemnified Party, the Indemnified Party
      shall nevertheless have the right, at the Indemnifying Party's cost and
      expense, to defend such Claim.

                                       31
<PAGE>

13.   MISCELLANEOUS

13.1  Governing Law. Notwithstanding anything to the contrary in Appendix A,
      this Agreement shall in all respects be governed by and construed in
      accordance with the laws of Japan, without regard to the conflict of laws
      principles.

13.2  Effectiveness. This Agreement shall be effective as of the date first
      written above and shall remain in effect until the Termination Date.
      Sections 7, 11.7, 11.8 and 13 shall survive the Termination Date.

                     [REST OF PAGE INTENTIONALLY LEFT BLANK]

                                       32
<PAGE>

            IN WITNESS WHEREOF, this Agreement has been executed and delivered
by each party as of the date first above written.

                                        TOSHIBA CORPORATION

                                        By:   /s/ Masashi Muromachi
                                           -------------------------------------
                                           Name:    Masashi Muromachi
                                           Title:   President and CEO
                                                    Semiconductor Company
                                                    Corporate Vice President

                                        SANDISK INTERNATIONAL LIMITED

                                        By:   /s/ Eli Harari
                                           -------------------------------------
                                           Name:    Eli Harari
                                           Title:   President

[Signature Page to Flash Partners Operating Agreement]

                                       33
<PAGE>

                                    EXHIBIT A

                    ARTICLES OF INCORPORATION OF THE COMPANY

[***]

[***] 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.

                                       34
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                         Unofficial English Translation

                            ARTICLES OF INCORPORATION
                                       OF
                              FLASH PARTNERS, LTD.

[***]

[***] 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.

                                       35
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                                 Schedule 2.1(b)

                   Committed Additional Capital Contributions

[***]

[***] 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.

                                       36
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                                  Schedule 5.3

                        Management and Operating Reports

[***]

[***] 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.

                                       37
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                                  Schedule 6.1

                              Capital Contributions

[***]

[***] INDICATES THAT CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO RULE 24B-2. CONFIDENTIAL TREATMENT
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                                       38
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                                  Schedule 8.3

                                 Monthly Reports

This Schedule provides a list of Unitholder required reports, pursuant to
Section 8.3(d) (Monthly Reports), that are required to be transmitted to the
Unitholders by the dates listed. Any Unitholder may modify this list
periodically as requirements for data change. When a Unitholder requests a
report, a sample format for the report will be provided to the Company by the
requesting Unitholder.

REPORTS TO UNITHOLDERS

<TABLE>
<CAPTION>
              REPORT TITLE                                    DATE DUE
<S>                                                   <C>
A.   Monthly Flash Report                             3 days after month close
B.   Monthly Measurement Report                       7 days after month close
C.   Monthly Cash Flow Report                         7 days after month close
D    Monthly Balance sheets                           7 days after month close
E.   Monthly Profit & Loss                            7 days after month close
F.   Monthly Operational Spending Summary             7 days after month close
</TABLE>

                                       39

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