Document:

<PAGE>

                                                                   Exhibit 10.30

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

                              NEW MASTER AGREEMENT

                           Dated as of April 10, 2002

                                 by and between

                               TOSHIBA CORPORATION

                                       and

                               SANDISK CORPORATION

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

                                                            New Master Agreement

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>
ARTICLE I   DEFINITIONS, RULES OF CONSTRUCTION AND DOCUMENTARY CONVENTIONS ...........   1

   SECTION 1.01    Certain Definitions ...............................................   1

   SECTION 1.02    Additional Definitions ............................................   2

   SECTION 1.03    Rules of Construction and Documentary Conventions .................   3

   SECTION 1.04    Additional Rules of Construction ..................................   3

ARTICLE II  PURPOSE OF FVC-JAPAN .....................................................   4

   SECTION 2.01    Purpose ...........................................................   4

   SECTION 2.02    New Operating Agreement ...........................................   4

ARTICLE III CLOSING; DISSOLUTION OF FVC ..............................................   4

   SECTION 3.01    Closing ...........................................................   4

   SECTION 3.02    Termination of Master Agreement ...................................   4

   SECTION 3.03    Post  Closing Matters .............................................   5

ARTICLE IV  REPRESENTATIONS AND WARRANTIES OF THE PARTIES ............................   6

   SECTION 4.01    Organization, Ownership Interest, etc .............................   6

   SECTION 4.02    Authorization; No Conflict ........................................   7

   SECTION 4.03    Enforceability ....................................................   8

   SECTION 4.04    Proceedings .......................................................   8

   SECTION 4.05    Litigation; Decrees ...............................................   8

   SECTION 4.06    Compliance with Other Instruments .................................   9

   SECTION 4.07    Patents and Proprietary Rights ....................................   9

   SECTION 4.08    Compliance with Laws ..............................................   9

   SECTION 4.09    Patent Cross Licenses .............................................   9

   SECTION 4.10    Representations with Respect to FVC-Japan .........................   9

ARTICLE V   COVENANTS ................................................................  10

   SECTION 5.01    Covenants of the Parties ..........................................  10

   SECTION 5.02    Further Assurances ................................................  11

   SECTION 5.03    Public Announcements ..............................................  11

   SECTION 5.04    Expenses ..........................................................  12

   SECTION 5.05    Undertaking as to Affiliate Obligations ...........................  12
</TABLE>

                                                            New Master Agreement

<PAGE>

                               TABLE OF CONTENTS
                                  (continued)
<TABLE>
<CAPTION>
                                                                                 Page

<S>                                                                               <C>
     SECTION 5.06      Continuity and Maintenance of Operations ................. 12

     SECTION 5.07      Certain Deliveries and Notices ........................... 12

ARTICLE VI     COVENANTS CONCERNING NAND FLASH MEMORY
             PRODUCT BUSINESS ................................................... 13

     SECTION 6.01      Technology Transfers ..................................... 13

     SECTION 6.02      Start-up Services at the Yokkaichi Facility .............. 13

     SECTION 6.03      Expanded Capacity ........................................ 14

     SECTION 6.04      Capacity Sharing Arrangement ............................. 16

     SECTION 6.05      Creation of Management Committee ......................... 18

     SECTION 6.06      Personnel ................................................ 21

     SECTION 6.07      Non-solicitation of Employees ............................ 22

     SECTION 6.08      External Financing; Additional Equipment ................. 23

     SECTION 6.09      Other Activities ......................................... 23

     SECTION 6.10      Protection of Intellectual Property ...................... 24

     SECTION 6.11      Purchase of Replacement Tools ............................ 24

     SECTION 6.12      Installation of FVC-Japan Equipment ...................... 25

ARTICLE VII    OTHER AGREEMENTS ................................................. 25

     SECTION 7.01      FVC-Japan Foundry Agreement .............................. 25

     SECTION 7.02      SanDisk Foundry Agreement ................................ 27

     SECTION 7.03      Purchase and Supply Agreement ............................ 28

     SECTION 7.04      Common R&D Agreement ..................................... 29

     SECTION 7.05      Product Development Agreement ............................ 29

     SECTION 7.06      Other Matters ............................................ 29

     SECTION 7.07      Yokkaichi Service Agreement .............................. 30

     SECTION 7.08      Patent Cross License ..................................... 30

ARTICLE VIII   TERMINATION ...................................................... 30

     SECTION 8.01      Termination .............................................. 30

ARTICLE IX     MISCELLANEOUS .................................................... 35

     SECTION 9.01      No Partnership ........................................... 35

     SECTION 9.02      Governing Law ............................................ 35

     SECTION 9.03      Dispute Resolution ....................................... 35
</TABLE>

                                                                Master Agreement

                                       ii

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                                                Page
<S>                                                                                             <C>
         SECTION 9.04      Damages Limited ....................................................  36

EXHIBITS
--------

Exhibit A         -  New Operating Agreement
Exhibit B         -  Certificate of Cancellation
Exhibit C         -  Articles of Incorporation of FVC-Japan
Exhibit D         -  Balance Sheet of FVC-Japan
Exhibit E         -  Indemnification Agreement
Exhibit F         -  SanDisk Foundry Agreement
Exhibit G         -  Amendment to Common R&D Agreement
Exhibit H         -  Amendment to Product Development Agreement
Exhibit I         -  License Amendment

SCHEDULES
---------

Schedule 2.01     -  Definition Regarding Embedded NAND Flash
Schedule 4.05     -  Litigation; Decrees
Schedule 4.07     -  Patents and Proprietary Rights
Schedule 6.01     -  New Facility Transfer Costs
Schedule 6.02(b)  -  Costs and Expenses Related to Disposal of FVC Assets
Schedule 6.03     -  Priority for Expansion of Manufacturing Capacity of
                     NAND Flash Memory Products
Schedule 7.02(b)  -  Allocation of Yokkaichi (not including the FVC-Japan Equipment)
                     NAND Flash Memory Products
Schedule 8.01(d)  -  Royalty in case of SanDisk Unilateral Termination
Schedule 8.01(e)  -  Royalty in case of Deadlock Termination
Schedule 8.01(f)  -  Royalty in case of Event of Default Termination
</TABLE>

                                                                Master Agreement

                                       iii

<PAGE>

                  This NEW MASTER AGREEMENT, dated as of April 10, 2002, is
entered into by and between TOSHIBA CORPORATION, a Japanese corporation
("Toshiba") and SANDISK CORPORATION, a Delaware corporation ("SanDisk", and
together with Toshiba, the "Parties").

                  WHEREAS, the Parties desire to jointly develop, manufacture
and market NAND Flash Memory Products (as hereinafter defined) and NAND related
products;

                  WHEREAS, in connection with the manufacturing of NAND Flash
Memory Products, the Parties have formed FlashVision, L.L.C., a Virginia limited
liability company ("FVC"), and the Parties collectively own all of the
outstanding equity interest of FVC;

                  WHEREAS, Toshiba currently owns and operates a manufacturing
facility located in Yokkaichi-shi, Japan (the "Yokkaichi Facility"). For
purposes of this Agreement, "Yokkaichi" means Toshiba in its capacity as the
owner and operator of the Yokkaichi Facility;

                  WHEREAS, Toshiba currently owns all of the outstanding equity
interest in FlashVision, Ltd., a limited liability company (yugenkaisha)
organized under the laws of Japan ("FVC-Japan");

                  WHEREAS, the Parties now desire to discontinue FVC's business
in Manassas, Virginia and move the operations formerly conducted by FVC to
Japan, where such operations will be conducted by FVC-Japan;

                  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;

                  NOW, THEREFORE, the Parties agree as follows:

                                   ARTICLE I

                       DEFINITIONS, RULES OF CONSTRUCTION
                           AND DOCUMENTARY CONVENTIONS

                  SECTION 1.01      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 Documentary Conventions, attached to this Agreement
and made a part hereof.

                                                            New Master Agreement

<PAGE>

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

                  SECTION 1.02 Additional Definitions. The following capitalized
terms used in this Agreement shall have the respective meanings assigned in this
Agreement:

Term                                             Defined In
----                                             ----------
..13u/MLC Tools                                   Section 6.11
Acquiring Party                                  Section 8.01(c)
Additional Capacity Tools                        Section 6.11
Amendment to Common R&D Agreement                Section 7.04
Amendment to Product Development Agreement       Section 7.05
Appointing Party                                 Section 6.05(b)
Bridge Loan                                      Section 3.03(c)(ii)
Committee Representatives                        Section 6.05(b)
Common R&D Agreement                             Section 7.04
Designated Individuals                           Section 9.03(a)
FVC                                              Recitals
FVC Capital                                      Section 3.03(b)(iv)
FVC Owned Equipment                              Section 3.03(b)(v)
FVC-Japan                                        Recitals
FVC-Japan Foundry Agreement                      Section 7.01
FVC-Japan Sales Price                            Section 7.03(b)
ICs                                              Section 2.01
Indemnification Agreement                        Section 6.08(a)
Intellectual Property                            Section 4.07
Leased Equipment                                 Section 3.03(b)(i)
License Agreement                                Section 7.08
License Amendment                                Section 7.08
Logistics Service Agreement                      Section 6.02(b)(iii)
Management Committee                             Section 6.05
NAND Flash Memory Integrated Circuits            Section 6.09
NAND Flash Memory Products                       Section 2.01
NAND Process Technology                          Section 6.01(a)
New Facility                                     Section 6.01(a)
New Operating Agreement                          Section 2.02

                                                                Master Agreement

                                       2

<PAGE>

Term                                             Defined In
----                                             ----------
Non-Originating Party                            Section 6.04(c)
Originating Party                                Section 6.04(c)
Product Development Agreement                    Section 7.05
Proprietary NAND Flash Memory Products           Section 6.04(b)
Purchase and Supply Agreement                    Section 7.03
Replacement Tools                                Section 6.11
Requesting Party                                 Section 8.01(c)(I)
SanDisk Foundry Agreement                        Section 7.02
SanDisk Termination Capacity                     Section 8.01(d)(i)
Selling Party                                    Section 8.01(c)
Service Fee                                      Section 6.02(b)(iii)
Start-Up Costs                                   Section 6.02(a)
Start-Up Period                                  Section 6.02(a)
Start-Up Services                                Section 6.02(a)
Tax Returns                                      Section 4.10(f)
Termination Capacity                             Section 8.01(c)(i)
Termination Date                                 Section 8.01(a)
Transferred Equipment                            Section 6.02(a)
Units                                            Section 3.03(a)
Yokkaichi                                        Recitals
Yokkaichi Facility                               Recitals
Yokkaichi Manufacturing Costs                    Section 7.01(d)
Yokkaichi Sales Price                            Section 7.01(d)
Yokkaichi Service Agreement                      Section 7.07
Yokkaichi Target Capacity                        Section 7.01(b)

                  SECTION 1.03 Rules of Construction and Documentary
Conventions. The rules of construction and documentary conventions set forth in
Appendix A shall apply to this Agreement.

                  SECTION 1.04 Additional Rules of Construction. 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.

                                                                Master Agreement

                                        3

<PAGE>

                                   ARTICLE II

                              PURPOSE OF FVC-JAPAN

     SECTION 2.01 Purpose. FVC-Japan will, through a series of relationships and
agreements, be engaged in the manufacture, by one or more subcontract
arrangements, and sale of NAND (both binary and MLC Flash Memory) Flash Memory
Integrated Circuits (as hereinafter defined), excluding any products with
process design rules generally greater than 0.25 microns (collectively, "NAND
Flash Memory Products"), for the Parties (whether directly or indirectly through
their respective Affiliates). Except as specifically provided for in Articles VI
and VII, all NAND Flash Memory Products of the Parties and their respective
Affiliates will be acquired through FVC-Japan. Embedded Integrated Circuits
("ICs") incorporating NAND Flash Memory Products as well as logic circuitry (i)
will be included in the definition of NAND Flash Memory Products if the main
function and value of such IC is Flash Memory and (ii) will not be included in
the definition of NAND Flash Memory Products if the main function and value of
such IC is logic. Schedule 2.01 sets forth the formula that the Parties shall
use to determine the main function and value of ICs. The Parties each are
permitted to market and sell NAND Flash Memory Products manufactured by and for
Toshiba and/or SanDisk, as provided for in this Agreement, to any third party in
any form, including but not limited to chips, packaged devices and cards.

     SECTION 2.02 New Operating Agreement. In accordance with the Japan Act, as
of the date hereof, the Parties will enter into that certain New Operating
Agreement (the "New Operating Agreement"), in the form attached hereto as
Exhibit A, which sets forth (i) the business of FVC-Japan, (ii) the conduct of
FVC-Japan's affairs and (iii) the rights, powers, preferences, limitations and
responsibilities of the Parties as owners of Units in FVC-Japan.

                                  ARTICLE III

                           CLOSING; DISSOLUTION OF FVC

     SECTION 3.01 Closing. The Closing shall occur upon the execution of this
Agreement and of each other Operative Document (except for any Operative
Document to be executed following the Closing under the terms of this
Agreement).

     SECTION 3.02 Termination of Master Agreement. Effective immediately upon
Closing, that certain Master Agreement, dated as of May 9, 2000, by and among
Toshiba, SENA and SanDisk, shall be terminated and be of no further force or
effect. Pursuant to a letter agreement dated as of the date hereof, SENA has
consented to such termination.

                                                                Master Agreement

                                        4

<PAGE>

          SECTION 3.03 Post Closing Matters.

          (a) Sale of FVC-Japan Equity Interest. As soon as practicable
following the Closing, Toshiba agrees to sell to FVC all of the units of
contribution (shussi mochibun) in FVC-Japan, the par value of one unit
(shussi-hitokuchi-no-kingaku) being JPY 5,000 (the "Units"), for the amount of
[***].

          (b) Transfer of FVC Equipment; Capital Increase in FVC-Japan. The
Parties agree to take the following actions, in the order listed, as soon as
practicable following the sale of the Units to FVC:

                 (i)   cause FVC to sell to FVC-Japan the equipment which was
     formerly leased from ABN AMRO (the "Leased Equipment"), for an amount equal
     to the Net Book Value thereof; then

                 (ii)  cause FVC to sell to either DSC or Toshiba certain
     building, clean room and other assets to be agreed by the Parties in the
     amount equal to the Net Book Value thereof as of March 31, 2002; then

                 (iii) cause FVC to sell to either DSC or Toshiba certain other
     tools to be agreed by the Parties in the amount equal to the Net Book Value
     thereof; then

                 (iv)  cause FVC-Japan to authorize the increase of the capital
     in FVC-Japan by 1,000 Units, and cause FVC to subscribe to purchase all of
     such increase by means of a cash payment, by wire transfer of immediately
     available Japanese Yen, in an amount equal to fifty percent (50%) of the
     result of (A) the amount of paid in capital of FVC ($300,000,000) minus (B)
     the amount paid by FVC to Toshiba to acquire all of the outstanding Units
     pursuant to Section 3.03(a) above ([***]) (the amount resulting from
     subtracting subsection (B) from subsection (A) hereinafter referred to as
     the "FVC Capital"); then

                 (v)   cause FVC to sell to FVC-Japan the remainder of its owned
     equipment formerly used by DSC in the manufacture of NAND Flash Memory
     Products in Manassas, Virginia (the "FVC Owned Equipment") in an amount
     equal to the Net Book Value thereof as of April 30, 2002; then

                 (vi)  cause FVC-Japan to authorize the increase of the capital
     in FVC-Japan by 1,000 Units, and cause FVC to subscribe to purchase all of
     such increase by means of a cash payment, by wire transfer of immediately
     available Japanese Yen, in an amount equal to fifty percent (50%) of the
     FVC Capital; then

                 (vii) cause FVC to be dissolved and liquidated by filing or
     causing to be filed, in accordance with the Virginia Act, the Certificate
     of Cancellation attached hereto as Exhibit B; then

                                                            New Master Agreement

[***] 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>

                 (viii) cause the Units held by FVC to be distributed to the
     Parties on a pro rata basis based upon their respective Percentages as of
     the date of such distribution.

             (c)  Arrangement of Financing for FVC-Japan.

                 (i)  The Parties agree that, following the Closing, they shall
     use their commercially reasonable efforts (and shall cooperate with the
     other Party and negotiate in good faith) to cause FVC-Japan to enter into
     financing arrangements with Mizuho Corporate Bank, Ltd., or any other
     financial institutions organized under the laws of Japan, as soon as
     practicable following the Closing with respect to the Leased Equipment.
     Nothing in this Section 3.03(c) shall be deemed to amend or otherwise
     affect the obligations of Toshiba under that certain letter agreement,
     dated March 20, 2002, between the Parties.

                 (ii) In the event that the outstanding principal amount of the
     loan evidenced by that certain Loan Agreement, dated the date hereof,
     between Toshiba and FVC-Japan (the "Bridge Loan"), along with any interest
     accrued thereon, shall have not been repaid on or prior to the date on
     which any of such amounts have become due and payable, [***].

             (d) Asset Sale Adjustment. As soon as practicable, but in no event
     later than the liquidation of FVC, Toshiba shall pay to FVC an amount equal
     to the Net Book Value of the assets remaining in the fixed asset account of
     FVC following the sale or other disposition of installation components,
     building, clean room assets, the FVC Owned Equipment, tools, and any other
     assets.

                                   ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF THE PARTIES

             Except as may be disclosed in disclosure schedules attached to this
Agreement, and unless indicated differently in the provisions of this Article
IV, each Party represents and warrants to the other Party, as of the date
hereof, as follows:

             SECTION 4.01 Organization, Ownership Interest, etc.

             (a) It is duly organized, validly existing and in good standing
under the laws of its 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 Operative Document to which it is specified to be a
party.

                                                            New Master Agreement

[***] 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.

                                       6

<PAGE>

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

             SECTION 4.02 Authorization; No Conflict.

             (a) It has duly authorized, by all necessary action, the execution,
delivery and performance of each Operative Document to which it or FVC-Japan is
specified to be a party. All corporate and other legal proceedings taken by each
Party, FVC and FVC-Japan in connection with the transactions contemplated by the
Operative Documents and all documents relating to the transactions contemplated
thereby are reasonably satisfactory in form and substance to each Party and its
counsel, and certified or other copies of all relevant documents as either Party
reasonably requested have been provided to such Party or its counsel.

             (b) Its execution and delivery of each such Operative Document, its
consummation of the transactions contemplated thereby and its compliance
therewith, does not and will not (i) require any approval of its stockholders or
any approval or consent of any trustee or holder of any of its Indebtedness or
obligations, (ii) contravene any Governmental Rule applicable to or binding on
it or any of its properties if such contravention would have a material adverse
effect on it or on its ability to perform any of its obligations under any
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 property or the property of FVC or FVC-Japan
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 is a party or by which it or any of its
properties is or is intended to be bound or by which FVC or FVC-Japan or any of
their respective 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 with the
construction and operation of the FVC-Japan Equipment), 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 FVC-Japan Equipment) or other third Person necessary or
advisable for

                                                                Master Agreement

                                        7

<PAGE>

such Party to consummate in all material respects the transactions contemplated
by the Operative Documents have been obtained. No Burdensome Condition exists
with respect to such Party, FVC or FVC-Japan in connection with the transactions
contemplated by the Operative Documents. The pre-transaction waiting period
required by the Japanese Foreign Exchange and Foreign Trade Law, the HSR Act or
any other comparable statute, if applicable, and related regulations relating to
the transactions contemplated by the Operative Documents, shall have expired or
been terminated.

             SECTION 4.03 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 its Affiliates have duly executed and delivered each
other Operative Document to which it or its Affiliates is or is specified to be
a party and, upon the execution and delivery of each such other Operative
Document by each other party thereto, each such other 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).

             SECTION 4.04 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, on the conduct of the business of FVC-Japan
following the Closing as contemplated in the Operative Documents or on such
Party's ability to perform any of its material obligations under any Operative
Document.

             SECTION 4.05 Litigation; Decrees. Except as set forth in Schedule
4.05, 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 FVC-Japan following the Closing
as contemplated by the Operative Documents or (ii) relate to any of the
transactions contemplated by the Operative Documents in a manner which is
material to the ability of it to carry out the transactions contemplated hereby
and in the other Operative Documents or which could have a material adverse
effect on the conduct

                                                                Master Agreement

                                        8

<PAGE>

of the business of FVC-Japan following the Closing as contemplated in the
Operative Documents.

             SECTION 4.06 Compliance with Other Instruments. It is not in
default in any material respect in the performance of any material obligation,
agreement, instrument or undertaking to which it is a party or by which it or
any of its properties is bound, and there is no such obligation, agreement,
instrument or undertaking to which it is a party or by which it or any of its
properties is bound, in each case which is reasonably likely to have a material
adverse effect on the conduct of the business of FVC-Japan following the Closing
as contemplated by the Operative Documents.

             SECTION 4.07 Patents and Proprietary Rights. Except as set forth in
Schedule 4.07, to its knowledge, it owns or possesses sufficient legal rights to
all patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information and proprietary rights and processes (collectively,
"Intellectual Property") necessary (i) to carry out its obligations under the
Operative Documents and (ii) for the conduct of the business of FVC-Japan
following the Closing as contemplated in the 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 4.07, it has not received any communications
alleging that its Intellectual Property violates, or by its entering into the
transactions contemplated by the 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.

             SECTION 4.08 Compliance with Laws. It 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 ability to perform its obligations hereunder or under any other Operative
Document or on the conduct of the business of FVC-Japan following the Closing as
contemplated by the Operative Documents.

             SECTION 4.09 Patent Cross Licenses. With respect to (a) Toshiba,
except as previously disclosed to SanDisk in writing, there are no patent cross
licenses between it and any third party that would require FVC-Japan to make any
payment pursuant to Section 10 of the License Amendment, and (b) SanDisk, there
are no patent cross licenses between it and any third party that would require
FVC-Japan to make any payment pursuant to Section 8 of the License Amendment.

             SECTION 4.10 Representations with Respect to FVC-Japan. Toshiba
represents and warrants to SanDisk with respect to FVC-Japan as follows:

             (a) FVC-Japan is a limited liability company (yugenkaisha) duly
organized and validly existing under the laws of Japan.

                                                                Master Agreement

                                        9

<PAGE>

               (b) All of the outstanding Units in FVC-Japan are owned by
Toshiba. No Units have been issued in violation of the rights of any equity
holder, applicable law or the Articles of Incorporation of FVC-Japan, a copy of
which is attached hereto as Exhibit C. All of the Units are owned by Toshiba
free and clear of all encumbrances, claims, options, warrants, rights or other
agreements granting to any other entity any interest in or rights to acquire any
equity interest in FVC-Japan at any time or upon the happening of any stated
event.

               (c) Transfer of the Units contemplated under Section 3.03(a)
hereof shall vest in FVC legal, valid and marketable title to the Units free and
clear of any encumbrances, rights to acquire options and rights of preemption
with respect thereto in Toshiba or any other party.

               (d) The balance sheet of FVC-Japan, dated as of the date hereof,
a copy of which is attached as Exhibit D hereto, accurately presents the
financial condition of FVC-Japan as of the date hereof. FVC-Japan has no
material obligation or liability of any nature whatsoever (direct or indirect,
matured or unmatured, absolute, accrued, contingent or otherwise), whether or
not required by Japanese GAAP to be provided or reserved against on a balance
sheet, except for obligations or liabilities provided for or reserved against in
the attached balance sheet.

               (e) There is no litigation, proceeding or governmental
investigation pending or, to the best knowledge of Toshiba, threatened against
FVC-Japan. FVC-Japan is not in violation of any decree, order or arbitration
award or law, statute or regulations of any Governmental Authority, other than
such violations that would not have a material adverse effect on FVC-Japan.

               (f) All income, consumption, property and other tax returns and
reports (the "Tax Returns") required to be filed by FVC-Japan with respect to
taxable years or periods ending on or prior to the date hereof have been filed
with the appropriate Governmental Authorities in Japan, except such Tax Returns
with respect to which the failure to file would not have a material adverse
effect on FVC-Japan, and no Tax Return is disputed by any tax authority.
FVC-Japan has not received any notice of assessment or proposed assessment by
any tax authority in connection with the Tax Returns, and there are no tax
claims asserted in writing against FVC-Japan or its properties in connection
therewith.

                                    ARTICLE V

                                    COVENANTS

               SECTION 5.01 Covenants of the Parties. Each Party agrees that,
during the term of this Agreement:

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               (a) Performance of Obligations. It or its Affiliates shall fully
and faithfully carry out all its obligations under each Operative Document to
which it is a party.

               (b) Ownership Interest. Except as otherwise expressly permitted
by Article IX, X or XI of the New Operating Agreement and the Indemnification
Agreement and as contemplated by this Agreement, it shall not Transfer or permit
any of its Affiliates to Transfer all or any portion of its Units in FVC-Japan
(or all or any portion of its interest in any Subsidiary through which it
beneficially owns its Units), to any Person without the consent of the other
Party.

               SECTION 5.02 Further Assurances. Following the Closing, each
Party shall, and shall cause its Affiliates, FVC and FVC-Japan to, take all
reasonable actions necessary or appropriate to effectuate the transactions
contemplated by each Operative Document, 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 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.

               SECTION 5.03 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 FVC or FVC-Japan or that
       refers to the other Party or any of its Affiliates in connection
       therewith (other than a general reference to affiliation with FVC or
       FVC-Japan) that (A) concerns the financial condition or results of
       operations of FVC or FVC-Japan 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, FVC or FVC-Japan's performance or reflects negatively on
       either Party's commitment to FVC-Japan; 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 Operative Documents pursuant to the
       HSR Act and the Japanese Foreign Exchange and Foreign Trade Law and
       related regulations, (A) publicly file all or any part of any 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), FVC or FVC-Japan, except as may be required by any
       applicable Governmental Rule, in which case such Party shall

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       (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.

               (b) Except as required above, the Parties shall endeavor to
cooperate to assure that any press releases and announcements be approved by the
appropriate representatives of each Party. Each Party agrees to use commercially
reasonable efforts to give any approval required under this Section 5.03, or to
indicate that such approval will not be given, 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.

               SECTION 5.04 Expenses. Each Party shall bear its own expenses in
connection with the negotiation, execution and delivery of the Operative
Documents.

               SECTION 5.05 Undertaking as to Affiliate Obligations. Each Party
shall cause all covenants, conditions and agreements to be performed, observed
or satisfied by any of its Affiliates expressly set forth in any of the
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
pursuant to the New Operating Agreement, any event of dissolution of FVC-Japan
caused by such Affiliate. Nothing in Section 5.01 (Covenants of the Parties) or
in this Section 5.05 shall be construed to create any right in any Person other
than the Parties.

               SECTION 5.06 Continuity and Maintenance of Operations. During the
term of this Agreement, each Party agrees to use all reasonable efforts
consistent with past practice and policies to (i) preserve intact in all
material respects its present business operations, (ii) keep available the
services of its key employees as a group, and (iii) preserve its relationships
with suppliers, licensors, licensees, and others having business relationships
with it, each to the extent necessary to allow it to perform its obligations
under the Operative Documents and to allow FVC-Japan to conduct its business as
contemplated in the most recently approved Business Plan.

               SECTION 5.07 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 ability to
perform its obligations under any of the Operative Documents or the ability of
FVC-Japan to conduct its business as contemplated in the most recently approved
Business Plan, or (ii) any breach or failure to satisfy any condition or
covenant contained herein or in any other Operative Document by such Party.

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                                   ARTICLE VI

             COVENANTS CONCERNING NAND FLASH MEMORY PRODUCT BUSINESS

               SECTION 6.01 Technology Transfers.

               (a) Toshiba shall use all reasonable efforts to develop, and, in
exchange for the payments made by SanDisk under the Common R&D Agreement (as
hereinafter defined), upon successful development of 0.21, 0.16, 0.13 [***]
micron process technology applicable to the manufacturing and testing of NAND
Flash Memory Products ("NAND Process Technology") that can be implemented in a
commercially viable manner, Toshiba shall transfer such technology and all
improvements thereto [***] developed by Toshiba during the term of the Common
R&D Agreement, to such manufacturing facilities, other than the Yokkaichi
Facility, as may hereafter be agreed upon by the Parties (each, a "New
Facility"). Timing of the delivery of technology transfers shall be based on,
among other things, available capacity and shall be in accordance with the
decision to be made from time to time by the Management Committee.

               (b) Whenever a technology transfer is required hereunder, Toshiba
shall deliver such level of NAND Process Technology to the applicable New
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) [***].

               SECTION 6.02 Start-up Services at the Yokkaichi Facility.

               (a) During the Start-Up Period (as hereinafter defined), various
activities will be undertaken to physically transfer the FVC Owned Equipment and
the Leased Equipment (collectively, the "Transferred Equipment"), from DSC's
facility to the Yokkaichi Facility, with the intent to prepare the Yokkaichi
Facility for use of the FVC-Japan Equipment to produce wafers, and during such
period of transfer, equipment will be set up, modified and processes refined to
achieve reasonable manufacturing yield and overall quality (such activities, the
"Start-Up Services"). The costs of the Start-Up Services (the "Start-Up Costs")
shall be Yokkaichi's actual expenses for operations together with an allocation
(approved by the Parties) of common indirect costs incurred

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during the Start-Up Period, and shall include, but are not limited to, personnel
costs, material costs, FVC-Japan Equipment occupancy costs and other operating
expenses. Start-Up Costs shall not include the costs described in Section
6.02(c)(i) and (ii). The term "Start-Up Period" means the period commencing on
the execution of this Agreement and ending on either the date of the first wafer
in for [***] L/M production or December 31, 2002, whichever occurs earlier. As
of the date hereof, the Parties have determined that, SanDisk shall be
responsible for [***] of the Start-Up Costs. Such [***] shall be invoiced
quarterly by Toshiba to SanDisk in proportion to the level of Start-Up Services
expected to be completed during the relevant period as follows: (i) [***] on
June 28, 2002, (ii) [***] on September 27, 2002; and (iii) [***] on December 27,
2002. Payment of each invoiced amount shall be due 45 days after the date of
such invoice.

               (b) The Parties agree that the physical transfer of the
Transferred Equipment will occur on the basis of the following understanding:

                     (i)    Toshiba shall bear, and shall reimburse SanDisk (in
       such manner as may be mutually agreed by the Parties) for, all costs and
       expenses related to the disposal of those assets of FVC listed on
       Schedule 6.02(b). For the avoidance of doubt, it is the intention of the
       Parties that such costs and expenses have no financial impact on SanDisk.

                     (ii)   Toshiba will bear all transportation and insurance
       expenses related to the transfer of the Transferred Equipment. [***].

                     (iii)  [***].

               SECTION 6.03 Expanded Capacity.

               (a) The Parties intend to meet demand for increased capacity by
equally investing in, and jointly building (except for the expansion of the
Yokkaichi Facility (not including the FVC-Japan Equipment), unless otherwise
agreed upon by the Parties), and sharing, on equal or substantially equal terms,
equal amounts of new capacity for NAND Flash Memory Products. Schedule 6.03 sets
forth a list in order of priority of expanding the manufacturing capacity of
NAND Flash Memory Products. Toshiba shall be allocated NAND Flash Memory Product
capacity of [***] L/M and SanDisk shall be allocated NAND Flash Memory Product
capacity of [***] L/M at the Yokkaichi Facility (not including the FVC-Japan
Equipment). FVC-Japan Equipment shall be installed with a targeted maximum
manufacturing capacity for NAND Flash Memory Products of [***] L/M, to be
allocated to each Party on an equal basis. Toshiba shall have the right, in its
sole discretion, to expand the manufacturing capacity for NAND Flash Memory
Products of the Yokkaichi Facility, by up to a maximum of [***] L/M; provided,
that, SanDisk shall have the right to have allocated up to [***] of any such
expanded capacity so long as SanDisk commits to load such additional capacity
for six (6) months, and provided, further, that Toshiba may, in its sole
discretion, decrease the manufacturing capacity of the Yokkaichi Facility (not
including FVC-Japan Equipment), subject to Section 7.02(b).

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               (b) Once the FVC-Japan Equipment installed at the Yokkaichi
Facility has achieved NAND Flash Memory Products manufacturing capacity of [***]
L/M, and after such time as the Yokkaichi Facility (not including the FVC-Japan
Equipment) has achieved NAND Flash Memory Products manufacturing capacity of
[***] L/M, the Management Committee will determine whether to further expand
capacity at the Yokkaichi Facility or to establish a New Facility with capacity
to manufacture NAND Flash Memory Products at a targeted capacity to be
determined by the Management Committee, not to exceed [***] L/M. SanDisk shall
have the option to commit to an allocation of such converted capacity to
manufacture NAND Flash Memory Products, up to a maximum of [***] L/M.

               (c) Until (i) the Yokkaichi Facility (not including the FVC-Japan
Equipment) has achieved the expansion of its manufacturing capacity for NAND
Flash Memory Products, if any, determined by Toshiba in accordance with Section
6.03(a), (ii) the FVC-Japan Equipment installed at the Yokkaichi Facility has
achieved a NAND Flash Memory Product manufacturing capacity of [***] L/M, and
(iii) the Parties have further expanded capacity at the Yokkaichi Facility or
established a New Facility with a capacity to manufacture NAND Flash Memory
Products in an amount determined by the Management Committee (not to exceed a
targeted maximum capacity of [***] L/M), the Parties shall not make or cause to
be made any other increases in the manufacturing capacity for NAND Flash Memory
Products. After the capacity expansions described in clauses (i), (ii) and (iii)
of the preceding sentence have been achieved, either Party shall have the
one-time option to expand its capacity to manufacture NAND Flash Memory
Products; provided, that, in no event shall such Party's capacity [***] of the
total combined committed capacity to manufacture NAND Flash Memory Products,
after giving effect to such additional expansion.

               (d) Notwithstanding anything in this Section 6.03 to the
contrary, if SanDisk desires to purchase more than [***] L/M of NAND [***] in
the calendar year of 2003 or anytime thereafter, and Toshiba cannot offer such
additional capacity at a market competitive price, then (i) SanDisk may purchase
such additional capacity [***], and (ii) if SanDisk purchases such additional
capacity from another source, Toshiba may thereafter utilize more than [***] of
the total NAND manufacturing capacity and Toshiba shall no longer be subject to
the last sentence of Section 6.03(c); provided, however, SanDisk shall continue
to be entitled to purchase (A) [***] L/M of NAND [***] from FVC-Japan under and
pursuant to the SanDisk Purchase and Supply Agreement and (B) up to [***] L/M of
NAND [***] from Yokkaichi under and pursuant to the SanDisk Foundry Agreement.

               (e) After the capacity expansions described in Section 6.03(a),
(b) and (c), any additional capacity expansion shall be determined by the
Management Committee and shall be made by mutual agreement of the Parties.

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               (f) All NAND Flash Memory Products will be obtained by the
Parties or for the Parties through their respective Affiliates from FVC-Japan,
except that each Party may obtain, directly or indirectly, a combined total of
up to [***] L/M of NAND Flash Memory Products produced at the Yokkaichi Facility
(not including the FVC-Japan Equipment), which shall be obtained according to
agreed upon allocations in accordance with this Section 6.03. Notwithstanding
the foregoing, all orders for NAND Flash Memory Products not ordered through
FVC-Japan shall be reported to FVC-Japan on a quarterly basis.

               (g) If the Parties mutually agree to secure external
manufacturing sources other than the Yokkaichi Facility through joint investment
or investment by either Party in accordance with this Section 6.03, FVC-Japan
and Toshiba will jointly transfer the applicable manufacturing technology and
know-how to such source. FVC-Japan 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. The Parties may purchase NAND Flash Memory Products manufactured at
such external source only from FVC-Japan. 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 from such external manufacturing source. If both Parties request
such new external capacity, then FVC-Japan 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.

               SECTION 6.04  Capacity Sharing Arrangement.

               (a) Each of the Parties will have the right and obligation,
through FVC-Japan, to utilize 50% of the FVC-Japan Equipment's manufacturing
capacity based on a measure of equivalent wafer starts per day 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 NAND Flash Memory
Products being produced for such Parties. Where the Parties purchase the same
output volume (up to and including 50% of the Yokkaichi Target Capacity (as
hereinafter defined)) for equivalent NAND Flash Memory Products supplied by
FVC-Japan, the Parties will pay the same purchase price per die or packaged
unit. If a Party is unable to utilize 50% of FVC-Japan's manufacturing capacity
for NAND Flash Memory Products, such Party may contract with FVC-Japan to
utilize its surplus capacity to manufacture such Party's proprietary products,
including but not limited to controllers or Flash Memory products that are not
NAND Flash Memory Products, provided, that such Party installs the necessary
process technology and bears all incremental costs (measured as incremental
costs above the Yokkaichi

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Manufacturing Costs (as hereinafter defined) at the then-current maximum
capacity of the FVC-Japan Equipment) associated with the adverse impact on the
manufacture of NAND Flash Memory Products. If either Party is unable to use its
allocated capacity, the Parties may negotiate the terms of a transfer of such
capacity shortfall to the Party not experiencing such shortfall. To the extent
that a Party is not able to utilize excess capacity or transfer such capacity to
the other Party, the Party experiencing such shortfall will pay the incremental
cost increase to the Party not experiencing a shortfall (or pay to FVC-Japan an
under-utilization fee in accordance with a formula to be mutually determined by
the Parties).

               (b) 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. Any adverse incremental costs (measured as
incremental costs above the Yokkaichi Manufacturing Costs at the then-current
maximum capacity of the FVC-Japan Equipment) associated with the manufacture and
production of such Proprietary NAND Flash Memory will be borne by the initiating
Party. 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 unless it receives the consent of the
other Party to an increase in such output volume above such limit.

               (c) 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 or NAND Flash Memory-related controllers,
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 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 6.04(b) above; 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

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NAND Flash Memory Products, or (ii) treat such NAND Flash Memory Products as
Proprietary NAND Flash Memory Products for purposes of Section 6.04(b) above. 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.

               (d) Each Party may use a portion of its total allocated capacity
to cause controllers to be manufactured at a New Facility or at the Yokkaichi
Facility using the FVC-Japan Equipment, including NAND Flash Memory-related
controllers, and non-NAND Flash Memory-related products which are proprietary to
that Party and which need not be shared with the other Party. Any adverse
incremental costs (measured as incremental costs above the Yokkaichi
Manufacturing Costs at the then-current maximum capacity of the FVC-Japan
Equipment) associated with the manufacture and production of such proprietary
designs will be borne by the initiating Party. 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 such proprietary 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.

               SECTION 6.05  Creation of Management Committee. Immediately after
the Closing, the Parties shall establish a management committee (the "Management
Committee") to manage the objectives of FVC-Japan set forth in the New Operating
Agreement and certain affairs of FVC-Japan.

               (a) Authority. The Management Committee shall have the authority
to (i) advise FVC-Japan with respect to policy and operating matters common to
Toshiba and SanDisk as well as on such other matters as FVC-Japan may decide to
refer to the Management Committee from time to time, (ii) preside over and pass
upon any disputes regarding operational matters (but not with respect to alleged
breaches of contractual obligations under the Operative Documents) that may
arise and cannot be resolved by FVC-Japan, in accordance with Section 9.03
(Dispute Resolution), and (iii) take the actions specified to be taken by the
Management Committee in this Section 6.05 and in Sections 6.01 (Technology
Transfer), 6.03 (Expanded Capacity) and 9.03 (Dispute Resolution).

               (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

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Section 6.05 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.

                   (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 Representative shall be entitled to compensation from FVC or
       FVC-Japan for serving in such capacity.

                   (iv)  Each Appointing Party shall notify the other Appointing
       Party and FVC-Japan 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 FVC-Japan 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 shall be required for
       purposes of approving 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 6.05(c) (Meetings, Notice, etc.), 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

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       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 FVC-Japan
       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.

                   (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 on a bi-annual basis or such other
       period as agreed upon by the Parties.

                   (iii)  Notice of any regular meeting or special meeting
       pursuant to Section 6.05(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 6.05(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 6.05, 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 6.05(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 Operative Documents or FVC-Japan.

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       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 6.05(c)(iii).

                     (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 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 6.05.

                     (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 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.

               (d) 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.

               SECTION 6.06  Personnel.

               (a) Subject to the terms and conditions of this Section 6.06,
each Party may assign to FVC-Japan, as Seconded Employees, employees whom such
Party believes

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are capable of performing the assignment and likely to contribute to the success
of FVC-Japan and to have a positive impact on FVC-Japan's business environment.
Any liabilities in respect of the employment of Seconded Employees assigned to
work at the Yokkaichi Facility shall be retained by the relevant Party (or its
Subsidiary) that assigned such Seconded Employee to FVC-Japan.

               (b) The Parties agree that it is in the best interests of
FVC-Japan to attract capable and qualified potential employees to work at
FVC-Japan. FVC-Japan's management will decide what type of promotional
activities and personal incentives are desirable to help achieve this goal and
shall be responsible for hiring decisions.

               (c) The Parties agree that all Seconded Employees, during their
period of assignment to FVC-Japan, are expected to devote their best efforts to
promote the interests and success of FVC-Japan and to perform their work for
FVC-Japan in good faith under the direction of management of FVC-Japan. Each
Party agrees to encourage Seconded Employees assigned to FVC-Japan by such Party
to be dedicated to the best interests and success of FVC-Japan.

               (d) The Parties will, by mutual consent, which consents shall not
be unreasonably withheld, agree on the total number of Seconded Employees
assigned to FVC-Japan at any time. The Party that assigns a Seconded Employee to
the Yokkaichi Facility in accordance with the terms hereof shall be responsible
for the salaries, employment-related Taxes and customary and reasonable
additional expenses of such Seconded Employee associated with the temporary
nature of such Seconded Employee's duties, including the costs and expenses
associated with any stock-based compensation (including, but not limited to,
stock options, stock appreciation rights, restricted stock, restricted stock
units and dividend equivalent rights) provided to such Seconded Employees;
provided, however, that FVC-Japan shall be responsible for expenses, mutually
agreed to by the Parties, of a Seconded Employee assigned to a New Facility,
other than as set forth in Schedule 6.01 in connection with the transfer of the
technology.

               (e) FVC-Japan shall be responsible for paying any expenses
associated with hiring its employees, including moving and living expenses and
signing bonuses, subject to approval of the Board of Directors after the
Closing.

               SECTION 6.07 Non-solicitation of Employees. So long as the
business of FVC-Japan is being continued, 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 officer of FVC or FVC-Japan (other
than a Seconded Employee of such Party or one of its Affiliates) to leave his or
her employment with FVC-Japan prior to the period ending twenty-four (24) months
after the termination of this Agreement; provided, however, that placement of
employment advertisements or other general solicitation for employees not
specifically targeted to the employees or officers of FVC or FVC-Japan shall not
be deemed to constitute direct recruitment. In the event of the dissolution and
upon the liquidation of FVC-Japan, either Party (or any Affiliate of either
Party) may

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solicit any employee or former employee of FVC or FVC-Japan, but neither Party
(nor any of its Affiliates) shall be required to employ any such Person. In the
event that all of the Units of one Party are purchased by the other Party or by
the designee of the other Party, the Parties shall reach agreement on a
reasonable transition plan of up to six months in connection with the services
provided to FVC-Japan by Seconded Employees assigned to FVC-Japan by the Party
selling all of its Units.

               SECTION 6.08 External Financing; Additional Equipment.

               (a) Funding required by FVC-Japan in excess of the aggregate US
$300 million in cash originally contributed by SENA and SanDisk to FVC will be
obtained by FVC-Japan through loans, equipment leasing transactions and other
methods of financing agreed to by the Parties; provided, however, such funding
shall not exceed US $500 million, without the written consent of each Party. The
types and amount of funding will continue to be evaluated until the time the
financing is required and will be based on, among other things, asset lives,
lease terms and cost of capital. The funding obligations of the Parties shall be
several and not joint, unless otherwise specifically agreed to in writing by
both Parties. It is the intent of the Parties that such obligations be incurred
on a pro rata basis based upon their respective Percentages as of the date on
which such obligations are incurred. The Parties shall provide several but not
joint guarantees of any institutional Indebtedness on a pro rata basis based
upon their respective Percentages as of the date on which such obligations are
incurred if such guarantees are required by third parties from which FVC-Japan
will obtain such funding or if such guarantees would substantially reduce the
interest rate applicable to such Indebtedness. Except as otherwise agreed to in
writing by the Parties, the actual cost of, and liabilities arising from, each
such guarantee shall be borne by the Party that provides such guarantee. In no
event shall the Parties be obligated to provide any joint and several guarantees
to third parties or otherwise be liable to any third party on a joint and
several basis. If either Party is unable to provide guarantees required
hereunder, such Party (or its Affiliates) shall make loans to FVC-Japan in the
amount of the guarantee required to be made by it hereunder; provided, that, the
interest rate for such loans shall not exceed competitive interest rates
denominated in U.S. dollars. Notwithstanding the foregoing, in connection with
the refinancing of the lease facilities with ABN AMRO as lessor which were
recently terminated by FVC by letter dated March 21, 2002, [***].

               (b) A definitive list of the FVC-Japan Equipment has not been
completed as of the date hereof. As soon as practicable after the Closing, the
Board of Directors shall establish the process and mechanism for obtaining such
equipment. Such process and mechanism shall include procedures for obtaining
equipment pursuant to arms-length negotiations on the most favorable terms and
conditions available.

               SECTION 6.09 Other Activities. During the term of this Agreement
and except as set forth in Section 6.03(d), neither Party nor any of their
respective Affiliates shall: (i) fabricate NAND Flash Memory Integrated Circuits
at any location

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other than the Yokkaichi Facility or any other fabrication facility agreed upon
by the Parties; (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 Article VI, as such
capacity limitations may be amended from time to time in accordance with this
Article VI. 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 Yokkaichi Facility (subject to the capacity
limitations set forth in this Article VI, as such capacity limitations may be
amended from time to time in accordance with this Article VI). For purposes of
this Section 6.09, "NAND Flash Memory Integrated Circuits" means ICs included in
the definition of NAND Flash Memory Products pursuant to Section 2.01.

               SECTION 6.10 Protection of Intellectual Property. Both Parties
share the common recognition that it is important for the success of the NAND
Flash Memory Products business to promote the adoption of such 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 will use reasonable
efforts to protect and enhance the value of NAND Flash Memory Products. Further,
where feasible, each Party shall share with FVC-Japan internally prepared
analyses of competitive products prepared by either Party so as to allow
FVC-Japan 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.

               SECTION 6.11 Purchase of Replacement Tools. As soon as
practicable after the Closing and with the intent to facilitate [***] L/M .16u
NAND Flash Memory Product output capacity for FVC-Japan, the Parties will cause
FVC-Japan to purchase (i) certain tools to replace the tools sold to third
parties pursuant to Section 3.03(b)(iii) (the "Replacement Tools") and (ii)
certain tools required in addition to the Replacement Tools to enable FVC-Japan
to attain [***] L/M output capacity for the .16u NAND Flash Memory Product (the
"Additional Capacity Tools"). The Replacement Tools and the Additional Capacity
Tools will be purchased from third party manufacturers and from Yokkaichi as
determined by the Parties. [***]. Unless otherwise agreed by the Parties,
Replacement Tools and Additional Capacity Tools will be 0.13u process
compatible. FVC-Japan shall bear broker fees, if any, transportation, insurance
and installation expenses associated with the Additional Capacity Tools.

               [***].

               Purchase of tools from the Yokkaichi Facility shall not occur
prior to January 2003. As soon as practical after the Closing, the Parties will
develop a plan to

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cause FVC-Japan to purchase certain new tools with the intent to facilitate
[***] L/M .13u NAND Flash Memory Product for FVC-Japan by the end of calendar
2002 (the ".13u/MLC Tools"). FVC-Japan shall bear broker fees, if any,
transportation, insurance and installation expenses associated with the .13u/MLC
Tools. In approximately the same time frame, Toshiba shall, at its expense,
purchase and install certain new tools with the intent to upgrade the existing
[***] L/M capacity at the Yokkaichi Facility (not including the FVC-Japan
Equipment) to process .13u/MLC NAND Flash Memory Product.

               SECTION 6.12 Installation of FVC-Japan Equipment. FVC-Japan shall
purchase new installation components (including, but not limited to, tool
modification and installation services) related to the FVC-Japan Equipment
(excluding Additional Capacity Tools and .13u/MLC Tools) in an amount not to
exceed the Net Book Value (as of March 31, 2002) of FVC capitalized expenses
related to the installation of (i) the FVC Owned Equipment, (ii) the Leased
Equipment at the DSC Facility and (iii) equipment sold to third parties pursuant
to Section 3.03(b)(iii).

                                  ARTICLE VII

                                OTHER AGREEMENTS

               In addition to this Agreement, the Parties will enter into or
cause to be entered into the following agreements (it being understood that the
descriptions of the following agreements are for reference purposes only, and
the fact that all provisions of said agreements are not included in the
following summary descriptions is not significant to the Parties):

               SECTION 7.01 FVC-Japan Foundry Agreement. FVC-Japan and Yokkaichi
shall enter into a foundry agreement (the "FVC-Japan Foundry Agreement") on, or
as soon as practicable after, the Closing. At such time as the FVC-Japan Foundry
Agreement is executed, it shall be deemed an Operative Document hereunder. The
FVC-Japan Foundry Agreement shall provide for ordering procedures, prices,
delivery, cost reporting and other specific terms and conditions for the
manufacture by Yokkaichi and supply to FVC-Japan of NAND Flash Memory Products,
which shall be consistent with the following basic terms:

               (a)   Facilities, Equipment and Raw Materials. The manufacturing
facilities will be located at the Yokkaichi Facility. FVC-Japan will lease or
sublease certain NAND manufacturing equipment to Yokkaichi to be used in the
manufacture of NAND Flash Memory Products by the FVC-Japan Equipment. Certain
equipment owned by Yokkaichi will also be made available for the manufacture of
NAND Flash Memory Products; provided, that [***], the depreciation and related
costs thereof shall be shared by FVC-Japan. Yokkaichi will be responsible for
obtaining the raw materials to be used in the manufacture of NAND Flash Memory
Products.

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          (b) Production. Yokkaichi will manufacture NAND Flash Memory Products
for FVC-Japan ordered by Toshiba and SanDisk under the terms and conditions of
the Purchase and Supply Agreement (as hereinafter defined). FVC-Japan and
Yokkaichi will use their best efforts to achieve a manufacturing capacity of the
FVC-Japan Equipment of [***] L/M for 0.16 microns (the "Yokkaichi Target
Capacity"). Wafers will be sorted between the Parties such that aggregate yield
losses will be shared on an equal basis.

          (c) Operating Relationship. Yokkaichi shall provide all employees
necessary for the manufacturing of the NAND Flash Memory Products by the
FVC-Japan Equipment.

          (d) Consideration to be Paid to Yokkaichi. The price charged to
FVC-Japan by Yokkaichi (the "Yokkaichi Sales Price") for the NAND Flash Memory
Products it manufactures under the FVC-Japan Foundry Agreement will be (i) after
commencement of the transition of wafer production from DSC's facility to the
Yokkaichi Facility [***], with respect to the wafers manufactured for SanDisk
under the FVC-Japan Foundry Agreement (which shall not exceed [***] L/M),
without duplication, the sum of [***]. The term "Yokkaichi Manufacturing Costs"
means all of Yokkaichi's costs and expenses which are directly or indirectly
incurred by Yokkaichi in conjunction with its operation and administration of
the FVC-Japan Equipment determined in accordance with Japanese GAAP consistently
applied in accordance with Yokkaichi's past practices and the cost methodology
to be agreed upon by the Parties on or before December 31, 2002. These costs and
expenses include but are not limited to, personnel costs, materials costs,
depreciation, leases, rentals, FVC-Japan Equipment occupancy costs, taxes,
insurance, interest and other operating expenses. The Yokkaichi Manufacturing
Costs shall expressly exclude: [***]. Notwithstanding the foregoing, commencing
on January 1, 2003 and for periods thereafter, the price per wafer, [***], shall
not exceed the prices set forth in (i)(w) above unless Toshiba, after
consultation with SanDisk, makes a capital investment for NAND Flash Memory
which results in a higher wafer price in order to accommodate the extra cost to
Toshiba. [***].

          (e) Exclusivity. Except as provided in Section 6.03 (Expanded
Capacity), Yokkaichi shall be FVC-Japan's exclusive manufacturing source for
output of NAND Flash Memory Products up to the total of the Yokkaichi Target
Capacity. FVC-Japan may seek external manufacturing sources for output in excess
of the Yokkaichi Target Capacity in accordance with the capacity expansion
priority set forth in Section 6.03 (Expanded Capacity).

          (f) Business Interruption Insurance. The Parties agree to discuss and
negotiate in good faith with respect to the necessity for business interruption
insurance for FVC-Japan. In the event that it is decided to obtain such
insurance coverage, each of the Parties shall be named as an additional insured
on the policy evidencing such coverage and the policy limits for such coverage
shall be an amount sufficient to protect

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Toshiba's and SanDisk's projected margin on NAND Flash Memory Products.

          SECTION 7.02  SanDisk Foundry Agreement. As of the date hereof,
Toshiba and SanDisk shall enter into a foundry and supply agreement in the form
of Exhibit F (the "SanDisk Foundry Agreement") providing for specific terms and
conditions for the manufacture and sale of NAND Flash Memory Products at the
Yokkaichi Facility (not including the FVC-Japan Equipment), which shall be
consistent with the following basic terms:

          (a)  Facilities, Raw Materials and Equipment: Toshiba will procure and
be responsible for all facilities, raw materials and equipment utilized in the
manufacture of NAND Flash Memory Products at the Yokkaichi Facility (not
including the FVC-Japan Equipment).

          (b)  Production. Yokkaichi will manufacture and supply NAND Flash
Memory Products in accordance with the demand requirements of Toshiba and
SanDisk. Toshiba agrees to allocate a portion of the manufacturing capacity of
the Yokkaichi Facility (not including the FVC-Japan Equipment) to SanDisk in
accordance with the allocation set forth in Schedule 7.02(b). Such allocation
will be subject to SanDisk's loading commitment to be made quarterly pursuant to
the SanDisk Foundry Agreement. In order to meet the capacity demands of both
Parties, Toshiba will expand the Yokkaichi Facility (not including the FVC-Japan
Equipment), up to [***] L/M in the aggregate. Such expansion shall be made at
Toshiba's own expense. The timing and amount of the investment necessary to
effect such expansion shall be in the sole discretion of Toshiba. If Toshiba
expands the capacity of the Yokkaichi Facility (not including the FVC-Japan
Equipment) from [***] L/M to [***] L/M, SanDisk shall have the right to utilize
up to [***] of such incremental capacity, up to a maximum of [***] L/M,
provided, however, once SanDisk exercises such right to utilize such incremental
capacity, SanDisk shall be obligated to commit to load such capacity for three
(3) months thereafter. Notwithstanding the foregoing, SanDisk acknowledges that
Toshiba may, in its sole discretion, decrease the manufacturing capacity of the
Yokkaichi Facility (not including the FVC-Japan Equipment), subject to the prior
loading commitment for three (3) month period made by SanDisk; provided,
however, a maximum of [***] L/M of such incremental capacity of SanDisk may
decrease to zero if Toshiba gives SanDisk written notice two (2) months prior to
the next three (3) month period, in which case Toshiba's manufacturing capacity
shall be proportionately reduced.

          (c)  Pricing of NAND Flash Memory Products Produced at the Yokkaichi
Facility. The purchase price to SanDisk for NAND Flash Memory Products produced
at the Yokkaichi Facility (not including the FVC-Japan Equipment) pursuant to
the SanDisk Foundry Agreement shall be as set forth in the SanDisk Foundry
Agreement and shall be consistent with the following basic terms:

               (i)  Prior to commencement of the transition of wafer production
from DSC's facility to the Yokkaichi Facility [***], Toshiba shall sell

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     wafers manufactured at the Yokkaichi Facility (not including the FVC-Japan
     Equipment) to SanDisk directly at a price equal to [***].

          (ii) After commencement of the transition of wafer production from
     DSC's facility to the Yokkaichi Facility (not including the FVC-Japan
     Equipment), with respect to up to [***] L/M of wafers requested by SanDisk
     in excess of the first [***] L/M of wafers purchased by SanDisk under the
     Purchase and Supply Agreement, Toshiba shall sell wafers manufactured at
     the Yokkaichi Facility (not including the FVC-Japan Equipment) to SanDisk
     directly at a price equal to:

               (A)  With respect to [***];

               (B)  With respect to [***];

               (C)  With respect to [***]; and

               (D)  With respect to [***], in connection with the SanDisk
          Foundry Agreement, the price for wafers manufactured at the Yokkaichi
          Facility (not including the FVC-Japan Equipment) will be negotiated in
          good faith among the Parties; [***].

          (d)  Priority of FVC-Japan NAND Flash Memory Products. Toshiba and
SanDisk shall not order or purchase NAND Flash Memory Products produced at the
Yokkaichi Facility (not including the FVC-Japan Equipment) except to the extent
FVC-Japan is unable to procure NAND Flash Memory Products manufactured at the
Yokkaichi Facility by the FVC-Japan Equipment in accordance with the demand
requirements of Toshiba and SanDisk. In the event that the Parties intend to
meet increased demand for NAND Flash Memory Products by expanding capacity at
the Yokkaichi Facility (not including the FVC-Japan Equipment), such expansion
of capacity shall be pursuant to the order set forth in Section 6.03 (Expanded
Capacity).

          (e)  Any dispute arising under the SanDisk Foundry Agreement (but not
under any other agreement specified in this Agreement) shall be resolved by
binding arbitration in Tokyo, Japan under the rules of the International Chamber
of Commerce. Each party shall bear its own costs and expenses of arbitration,
including attorneys' fees.

          SECTION 7.03  Purchase and Supply Agreement. FVC-Japan will enter into
an agreement with the Parties or their respective Affiliates providing for
specific terms and conditions for the purchase by the Parties of NAND Flash
Memory Products from FVC-Japan (the "Purchase and Supply Agreement"), which
shall be consistent with the following basic terms:

          (a)  Manufacturing. Except as provided in Sections 6.03 (Expanded
Capacity) and 7.02 (SanDisk Foundry Agreement), FVC-Japan shall manufacture or

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cause to be manufactured 100% of the demand of the Parties for NAND Flash Memory
Products.

          (b)  Sales Price for NAND Flash Memory Products. The sales price (the
"FVC-Japan Sales Price") charged by FVC-Japan to the Parties for wafers
manufactured pursuant to the FVC-Japan Foundry Agreement with respect to the
sale of the first [***] L/M of wafers pursuant to Section 7.01 will be a price
equal to the sum of (A) the [***]; provided, however, if during the transition
of the wafer production from DSC's facility to the Yokkaichi Facility [***]. The
Parties further agree to discuss in good faith at the request of Toshiba or
SanDisk the possibility of sales by FVC-Japan to non-Japanese Affiliates of
Toshiba or SanDisk if such sales can be made in a manner mutually beneficial to
the Parties. FVC-Japan shall use profits earned from the sale of NAND Flash
Memory Products for future investment in manufacturing and production as well as
for expenses associated with managing FVC-Japan and reimbursing expenses for
Seconded Employees.

          SECTION 7.04  Common R&D Agreement. As of the date hereof, the Parties
shall amend the Common R&D and Participation Agreement entered into as of May 9,
2000 (as amended in accordance herewith, the "Common R&D Agreement") in the form
of Exhibit G attached hereto (the "Amendment to Common R&D Agreement").

          SECTION 7.05  Product Development Agreement. As of the date hereof,
the Parties shall amend that certain Product Development Agreement entered into
as of May 9, 2000 (as amended in accordance herewith, the "Product Development
Agreement") for the design and development of new NAND Flash Memory Products and
NAND Flash Memory-related controllers in the form of Exhibit H attached hereto
(the "Amendment to Product Development Agreement").

          SECTION 7.06  Other Matters.

          (a)  Sale of SmartMedia. Upon the request of SanDisk, Toshiba will
sell SmartMedia to SanDisk on an OEM basis at mutually agreed terms and
conditions, including price.

          (b)  Assembly and Testing Services Agreement. The Parties will
consider joint arrangements for the provision of assembly (TSOP, card, PTP,
etc.) and test services. Subject to the availability of Toshiba's capacity,
Toshiba will, at SanDisk's request, provide assembly and test services at cost
plus a reasonable margin. Alternatively, the Parties will, at equal cost to
each, subcontract with third parties for such assembly and test services.

          (c)  Manufacture of Controllers. SanDisk may request that Toshiba
manufacture controllers for SanDisk, in which case, subject to availability of
manufacturing capacity, Toshiba agrees to sell the controllers to SanDisk at
prices and

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under terms and conditions at least as favorable as those previously or
presently made available by Toshiba to any other party.

          (d)  No Duplication of Costs or Expenses. It is the intent of the
parties that any payments made by SanDisk under or pursuant to the Common R&D
Agreement, the Product Development Agreement or the Yokkaichi Service Agreement
shall not be duplicative and SanDisk shall in no event be required to pay more
than once for any service provided under such agreements, if such service is
provided under more than one agreement, including without limitation, the
Start-Up Services. In addition, if SanDisk makes a direct payment for any
service provided under any such agreement, the cost incurred by Yokkaichi or
FVC-Japan, 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.

          SECTION 7.07  Yokkaichi Service Agreement. The Parties agree that
Yokkaichi and FVC-Japan shall enter into an agreement pursuant to which
Yokkaichi shall provide for FVC-Japan certain services such as administrative,
clerical, accounting and human resource services (the "Yokkaichi Service
Agreement").

          SECTION 7.08  Patent Cross License. Toshiba and SanDisk are parties to
a Patent Cross License Agreement, dated July 30, 1997 and amended as of May 9,
2000 (the "License Agreement") under which Toshiba pays royalties to SanDisk in
consideration for the license granted by SanDisk to Toshiba. The License
Agreement expires on or about July 29, 2002. As of the date hereof, the Parties
shall enter into a Second Amendment to the Patent Cross License Agreement in the
form attached as Exhibit I (the "License Amendment").

                                  ARTICLE VIII

                                   TERMINATION

          SECTION 8.01  Termination.

          (a)  This Agreement shall be terminated automatically upon the earlier
of the transfer of all of a Party's Units to the other Party (or its Affiliate)
or upon completion of the dissolution and liquidation of FVC-Japan pursuant to
Article XI (Dissolution) of the New Operating Agreement (the date of such
transfer or dissolution and liquidation, the "Termination Date"); provided,
that, all obligations or liabilities of either Party which are accrued or owing
prior to such termination and the Parties' covenants contained in Section 5.03
(Public Announcements) shall survive such termination.

          (b)  Upon termination of this Agreement resulting from an event of
dissolution of FVC-Japan pursuant to Section 11.01(a) of the New Operating
Agreement:

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                  (i)  The Parties shall further amend the License Agreement, as
          in effect as of the Termination Date, to specify that each Party's
          patents issued or issuing on patent applications entitled to an
          effective filing date prior to the 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 8.01(b)(i) shall not be
          greater than the scope of those granted under the License Agreement,
          as in effect as of the Termination Date.

                  (ii) Toshiba shall grant to SanDisk, effective upon such
          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 by Yokkaichi, and SanDisk
          shall have full access to all such know-how at the Yokkaichi Facility
          which has been transferred to Yokkaichi prior to the Termination Date.

             (c)  Upon termination of this Agreement resulting from an event of
     dissolution of FVC-Japan or one Party's acquisition of the other Party's
     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 11.05 (Dissolution Upon Notice) of the New
     Operating Agreement:

                  (i)  Toshiba or the Acquiring Party, as the case may be, will,
          upon the request, prior to the Termination Date, of (A) SanDisk (such
          request to be made at the time of its notice pursuant to Section 11.05
          of the New Operating Agreement) in the case of the dissolution of
          FVC-Japan 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 FVC-Japan under this Agreement as
          of the 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
             Termination Date: 100% of the Termination Capacity

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

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

                  (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.

                                                                Master Agreement

                                       31

<PAGE>

                        (iii)  The Parties shall further amend the License
               Agreement to specify that each Party's patents issued or issuing
               on patent applications entitled to an effective filing date prior
               to the 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 8.01(c)(iii) shall not be
               greater than the scope of those granted under the License
               Agreement, as in effect as of the Termination Date.

                        (iv)   Upon termination of this Agreement resulting from
               an event of dissolution of FVC-Japan caused by Toshiba's election
               to withdraw from FVC-Japan pursuant to the New Operating
               Agreement, then Toshiba hereby grants to SanDisk, effective upon
               the 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 by Yokkaichi, and
               SanDisk shall have full access to all such know-how at the
               Yokkaichi Facility which has been transferred to Yokkaichi prior
               to the Termination Date.

                   (d)  Upon termination of this Agreement resulting from an
        event of dissolution of FVC-Japan or Toshiba's acquisition of SanDisk's
        Units pursuant to Section 11.04 (Dissolution by Unilateral Option) of
        the New Operating Agreement:

                        (i)    Yokkaichi will, upon request of SanDisk given
               within sixty (60) days of the notice given by SanDisk pursuant to
               Section 11.04 of the New Operating Agreement, continue to
               manufacture products for SanDisk for a period of eighteen (18)
               months following the 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 FVC-Japan under this Agreement as of the
               Termination Date (the "SanDisk Termination Capacity"):

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

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

                               (C)   During the 13th through the 18th month
                   following the 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.

                                                                Master Agreement

                                       32

<PAGE>

                  (iii) The Parties shall further amend the License Agreement to
          specify that each Party's patents issued or issuing on patent
          applications entitled to an effective filing date prior to the
          Termination Date are licensed at the royalty rates specified in
          Schedule 8.01(d) for five (5) years following the Termination Date;
          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 Termination Date. The scope of the licenses as amended
          pursuant to this Section 8.01(d)(iii) shall not be greater than the
          scope of those granted under the License Agreement, as in effect as of
          the Termination Date.

             (e)  Upon termination of this Agreement resulting from an event of
dissolution of FVC-Japan or one Party's acquisition of the other Party's Units
following a Deadlock (as defined in the New Operating Agreement) pursuant to
Section 10.04 (Dispute Resolution; Deadlock Respecting Business Plan) of the New
Operating Agreement:

                  (i)   In the case of one Party's acquisition of the other
          Party's Units in FVC-Japan pursuant to Section 10.04(e) of the New
          Operating Agreement, the Acquiring Party will 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 Termination Date in accordance with the following ramp down
          manner:

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

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

                        (C)  During the 13th through the 18th month following
             the 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.

                  (iii) The Parties shall further amend the License Agreement to
          specify that each Party's patents issued or issuing on patent
          applications entitled to an effective filing date prior to the
          Termination Date are licensed: (x) at the royalty rates specified in
          Schedule 8.01(e) until March 31, 2008; (y) at the royalty rates
          specified in Schedule 8.01(d) from April 1, 2008 through December 31,
          2010; and (z) thereafter, on a royalty-free basis. Both Parties shall
          negotiate

                                                                Master Agreement

                                       33

<PAGE>

     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 Termination
     Date to mutually agree on royalty rates for patents filed by each Party
     after the Termination Date. The scope of the licenses as amended pursuant
     to this Section 8.01(e)(iii) shall not be greater than the scope of those
     granted under the License Agreement, as in effect as of the Termination
     Date.

          (f)   Upon termination of this Agreement resulting from an event of
dissolution of FVC-Japan or a Party's acquisition of the other Party's Units
described in Section 11.03 (Dissolution Upon Event of Default) of the New
Operating Agreement:

                (i)   The Parties shall further amend the License Agreement to
     specify that each Party's patents issued or issuing on patent applications
     entitled to an effective filing date prior to the Termination Date are
     licensed at the royalty rates specified in Schedule 8.01(f) for seven (7)
     years after the Termination Date or until the end of calendar 2015,
     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 by Yokkaichi, and SanDisk shall have full access to all
     such know-how at the Yokkaichi Facility which has been transferred to
     Yokkaichi prior to the Termination Date.

          (g)   Upon termination of this Agreement resulting from an event of
dissolution described in Section 11.01(f) (Bankruptcy Event) of the New
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 License Amendment 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 by Yokkaichi, and SanDisk shall have full access to all
     such know-how at the Yokkaichi Facility which has been transferred to
     Yokkaichi prior to the Termination Date.

                (ii)  If such termination is caused by a Bankruptcy Event in
     respect of SanDisk, the license granted to Toshiba under SanDisk Licensed

                                                                Master Agreement

                                       34

<PAGE>

     Patents (as defined in the License Amendment) pursuant to the License
     Amendment shall continue on a royalty-free basis.

          (h)  Upon termination of this Agreement pursuant to Section 9(b)(2) of
the Indemnification Agreement, the license granted to Toshiba under SanDisk
Licensed Patents pursuant to the License Amendment shall continue on a
royalty-free basis.

          (i)  Termination of this New Master 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.

                                   ARTICLE IX

                                  MISCELLANEOUS

          SECTION 9.01  No Partnership. Nothing contained in this Agreement
shall be deemed or construed to make the Parties, or any Affiliate of any of
them, partners or joint venturers with each other. FVC-Japan shall not be a
general partnership, a limited partnership or a joint venture, and no Party
shall be considered a partner or joint venturer of or with any other Party, for
any purposes other than for Federal, state and other tax purposes.

          SECTION 9.02  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;
provided, however, that any Operative Document described herein shall be
governed by the governing law specified in that Operative Document in the manner
specified in that Operative Document.

          SECTION 9.03  Dispute Resolution.

          (a)  The Parties shall use the process set forth in Section 10.04(a)
and (b) (Dispute Resolution) of the New Operating Agreement to address any
disputes which may arise concerning any material breach of any provision of any
of the Operative Documents, other than Events of Default, and in the absence of
exigent circumstances, the Parties shall refrain from commencing any lawsuit or
seeking judicial relief in connection with any such disputes until the Parties
have pursued such process to its conclusion. For such alleged breaches, the
Party alleging breach shall initiate the process by providing a written notice
to the individuals referred to in Section 10.04(b) of the New Operating
Agreement (the "Designated Individuals"), describing with specificity the facts
and circumstances forming the basis of the alleged breach, with the factual
explanation cross-referenced to any actions taken pursuant to Section 10.04(a)
of the New Operating Agreement and the applicable provisions of the relevant
Operative Document alleged to have been breached. Such notice shall also provide
a list of specific actions that, if taken by the alleged breaching Party, would
result in curing such alleged breach, if capable of

                                                                Master Agreement

                                       35

<PAGE>

cure, within sixty (60) days of the end of the dispute resolution process
referred to in said Section 10.04(b) of the New Operating Agreement. The Party
alleging breach and the alleged breaching Party will prepare and present their
views, including evidence collected, on such matter to the Designated
Individuals, in writing; and later in person to both Designated Individuals in a
single meeting, if requested by either Designated Individual. The written
description shall be provided not less than seven Business Days prior to any
meeting requested to be in person by either Designated Individual. If
irreparable harm would result from such alleged breach continuing during the
normal dispute resolution process, the Parties will accelerate the process at
the request of any party to the Operative Document alleged to have been
breached.

          (b) If senior management or the Management Committee cannot resolve
the dispute in accordance with Section 9.03(a), 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.

          SECTION 9.04 Damages Limited. IN THE ABSENCE OF ACTUAL FRAUD, IN NO
EVENT SHALL EITHER PARTY BE LIABLE TO OR BE REQUIRED TO INDEMNIFY THE 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.

                                                                Master Agreement

                                       36

<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/ Takeshi Nakagawa
                                       ----------------------------------------
                                   Name:  Takeshi Nakagawa
                                   Title:  Corporate Senior Vice President
                                           President & CEO
                                           Semiconductor Company

                                   SANDISK CORPORATION

                                   By: /s/ Eli Harari
                                       ----------------------------------------
                                   Name:  Eli Harari
                                   Title:  President & Chief Executive Officer

                    [Signature Page to New Master Agreement]

                                       37

<PAGE>

                                  SCHEDULE 2.01
                    Definition Regarding Embedded NAND Flash

The main function and value of any product is Flash Memory if the total NAND
flash memory array area is greater than [***] of the total die area or the
product is a cut-down or derivative of a standard NAND Flash Memory Product.

                                                                Master Agreement

                                       38

[***] 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.

<PAGE>

                                  SCHEDULE 4.05
                              Litigation; Decrees.

               On or about August 3, 2001, the Lemelson Medical, Education &
Research Foundation filed a complaint for patent infringement against SanDisk
Corporation and other defendants. The suit was filed in the United States
District Court, District of Arizona. On November 13, 2001, the Lemelson
Foundation filed an Amended Complaint, which made the same substantive
allegations against SanDisk but named more than twenty-five additional
defendants. The Amended Complaint alleges that SanDisk, and the other
defendants, have infringed certain patents held by the Lemelson Foundation
pertaining to bar code scanning technology. By its complaint, the Lemelson
Foundation requests that SanDisk be enjoined from our allegedly infringing
activities and seeks unspecified damages.

               On or about March 5, 2002, Samsung Electronics Co., Ltd. filed a
patent infringement lawsuit against SanDisk Corporation in the United States
District Court for the Eastern District of Texas. The lawsuit alleges that
SanDisk infringes four Samsung United States patents, Nos. 5,473,563; 5,514,889;
5,546,341 and 5,642,309, and seeks a preliminary and permanent injunction
against unnamed SanDisk products, as well as damages, attorneys' fees and costs
of the lawsuit.

                                                                Master Agreement

                                       39

<PAGE>

                                  SCHEDULE 4.07
                         Patents and Proprietary Rights

                               See Schedule 4.05.

                                                                Master Agreement

                                       40

<PAGE>

                                  SCHEDULE 6.01
                           New Facility Transfer Costs

[***]

                                                                Master Agreement

                                       41

[***] 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.

<PAGE>

                                SCHEDULE 6.02(b)
              Costs and Expenses Related to Disposal of FVC Assets

[***]

                                                                Master Agreement

                                       42

[***] 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.

<PAGE>

                                  SCHEDULE 6.03

 Priority for Expansion of Manufacturing Capacity of NAND Flash Memory Products

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------

                                    Toshiba                              SanDisk
------------------------------------------------------------------------------------------------------------
<S>                                 <C>                                  <C>
1.  Yokkaichi (not                  [***] L/M                            [***] L/M
including the FVC-Japan
Equipment)
------------------------------------------------------------------------------------------------------------

2.  Yokkaichi Expansion             Minimum [***]                        Maximum [***]
(at about the same time as          [***] L/M (or proportionate          [***] L/M (or proportionate
FVC-Japan                           amount in relation to total          amount in relation to total
expansion)(total                    expansion capacity if                expansion capacity if
expansion not to exceed             expansion less than [***]            expansion less than [***]
[***] L/M)                          L/M in total)                        L/M in total)
------------------------------------------------------------------------------------------------------------

2.  FVC-Japan (at about             [***] L/M                            [***] L/M
the same time as                    (or [***] of the actual              (or [***] of the actual
Yokkaichi expansion)                capacity)                            capacity)
------------------------------------------------------------------------------------------------------------

3.  Yokkaichi Facility or           [***] L/M to [***] L/M               [***] L/M to [***] L/M
a New Facility                      (or proportionate amount in          (or proportionate amount in
                                    relation to total expansion          relation to total expansion
                                    capacity if expansion less           capacity if expansion less
                                    than [***] L/M in total)             than [***] L/M in total)

------------------------------------------------------------------------------------------------------------
Until the capacity expansions described above are made, no other expansions of capacity shall be permitted
------------------------------------------------------------------------------------------------------------

4.  Thereafter, one time            (e.g., [***] L/M if previous
capacity expansion                  TSB allocation is [***] L/M
permitted, in an amount             and SD allocation is [***]
not to exceed the capacity          L/M)
ratio of [***]
------------------------------------------------------------------------------------------------------------

5.  Thereafter, all
capacity expansion must
be mutually agreed upon
------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                Master Agreement

                                       43

[***] 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.

<PAGE>

                                SCHEDULE 7.02(b)

   Allocation of Yokkaichi (not including the FVC-Japan Equipment) NAND Flash
                                Memory Products

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
         Period                1Q02         2Q02                2H02                  1H03 and beyond
-----------------------------------------------------------------------------------------------------------
      <S>                     <C>           <C>                 <C>                   <C>
         SanDisk              [***]         [***]               [***]                      [***]
      Allocation(L/M)
-----------------------------------------------------------------------------------------------------------
</TABLE>

Notes:
Wafers sold to the Parties by Toshiba will have the same yields on an aggregate
basis.

Such capacity includes [***] of 512Mbit 0.21 micron NAND MLC [***] of newly
installed 0.16 micron and 0.13 micron capacity for NAND Flash Memory. For
incremental capacity above [***] L/M at the Yokkaichi Facility, [***] of the
incremental capacity will be allocated to SanDisk, including up to [***] of any
0.13 micron capacity expansion for NAND Flash Memory.

                                                                Master Agreement

                                       44

[***] 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.

<PAGE>

                                SCHEDULE 8.01(d)

                Royalty in case of SanDisk Unilateral Termination

[***]

                                                                Master Agreement

                                       45

[***] 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.

<PAGE>

                                SCHEDULE 8.01(e)

                     Royalty in case of Deadlock Termination

[***]

                                       46

[***] 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.

<PAGE>

                                SCHEDULE 8.01(f)

                 Royalty in case of Event of Default Termination

[***]

                                       47

[***] 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.

<PAGE>
                                                                      APPENDIX A

                     DEFINITIONS, RULES OF CONSTRUCTION AND
                             DOCUMENTARY CONVENTIONS

     In any agreement or instrument that incorporates the definitions set forth
in this Appendix and states that the rules of construction and documentary
conventions set forth herein shall apply to such agreement or instrument, then,
unless such agreement or instrument otherwise requires:

                                   Article I.

                                  Definitions
                                  -----------

     The following terms shall have the specified meanings:

     "ABN AMRO" means ABN AMRO Bank, N.V.

     "Accountants" means such firm of internationally recognized independent
certified public accountants for FVC-Japan as is appointed pursuant to the New
Operating Agreement from time to time. Initially, the Accountants shall be
Deloitte & Touche 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
FVC, FVC-Japan or any of their respective subsidiaries, shall not include either
Party or any of its Affiliates, (b) when used in relation to a Party or any of
its Affiliates, shall not include FVC, FVC-Japan or any of their respective
Subsidiaries.

     "Articles" means the Articles of Incorporation of FVC-Japan.

     "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

<PAGE>

effect to any of the events specified in clauses (1) through (6) above; or (8)
takes any action in 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 FVC-Japan.

     "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 Party of its Units or (C)
seeking to impose limitations on the ability of either Party effectively to
exercise full rights as a member or Unitholder, as applicable, of FVC or
FVC-Japan, including the right to act on all matters properly presented to the
Parties pursuant to the New 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 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 FVC-Japan for each relevant
period, approved in accordance with Section 3.04(c) of the New Operating
Agreement and complying with Section 3.04(b) of the New Operating Agreement.

     "Capital Contribution" means the capital contribution made by or allocated
to a Party by virtue of its ownership of Units of FVC-Japan, as indicated on
Schedule 6.01 to the New 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 Section 3.01
of the New Master Agreement.

                                       2

<PAGE>

     "Closing Date" means the date mutually agreed for the Closing by the
Parties; provided, however, that in no event will the Closing Date be later than
April 30, 2002 without the written agreement of both Parties.

     "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.

     "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).

     "DSC" means Dominion Semiconductor Company, L.L.C, a Virginia limited
liability company.

     "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 9.01 of the
     New Operating Agreement or the breach by such Party of its covenant in
     Section 5.01(b) of the New 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.

     "Foundry Agreements" means, collectively, the SanDisk Foundry Agreement and
the FVC-Japan Foundry Agreement.

     "FVC" means FlashVision, L.L.C., a Virginia limited liability company.

     "FVC-Japan" means FlashVision, Ltd., a Japanese limited liability company
(yugenkaisha).

     "FVC-Japan Equipment" means, collectively, the FVC Owned Equipment, Leased
Equipment, Replacement Tools, Additional Capacity Tools, .13u/MLC Tools (each as
defined in the New Master Agreement) and any other equipment which is or will,
from time to time, be owned or leased by FVC-Japan.

                                       3

<PAGE>

     "FVC-Japan Foundry Agreement" means the Foundry Agreement between FVC-Japan
and Yokkaichi.

     "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.

     "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976
and the rules and regulations promulgated thereunder.

     "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;

          (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

                                       4

<PAGE>

     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.

     "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.

     "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.

     "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 FVC-Japan, the capital accounts of the Parties or the
ability of FVC-Japan to carry out its then-current Business Plan.

     "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.

     "New Initial Business Plan" means the initial business plan of FVC-Japan to
be agreed to and adopted by the Parties.

     "New Master Agreement" means the New Master Agreement dated as of April 10,
2002 by and between Toshiba and SanDisk.

                                       5

<PAGE>

     "New Operating Agreement" means the New Operating Agreement dated as of
April 10, 2002 between Toshiba and SanDisk.

     "Operative Documents" means the New Operating Agreement, the New Master
Agreement, the Articles, the SanDisk Foundry Agreement, the Common R&D
Agreement, the Product Development Agreement and, when executed, the FVC-Japan
Foundry Agreement.

     "Party" means Toshiba and SanDisk, and each of them.

     "Percentage" means, with respect to any Unitholder (as defined in the New
Operating Agreement), the percentage of such Unitholders' ownership interest in
FVC or FVC Japan, as the case may be. 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 or its Affiliate, 49.9%; provided, however, if either
Unitholder transfers all of its Units to any Affiliate in accordance with the
New 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 FVC-Japan, either
Party or any Affiliate of any such Person as provided in the 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.

     "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.

     "Purchase and Supply Agreement" means that certain Purchase and Supply
Agreement to be entered into in connection with the New Master Agreement, by and
among FVC-Japan, Toshiba and SanDisk.

     "SanDisk" means SanDisk Corporation, a Delaware corporation.

     "SanDisk Foundry Agreement" means the Foundry Agreement between Toshiba and
SanDisk.

     "Seconded Employee" means an individual who was originally an employee of a
Party or any of its Affiliates and who was assigned to FVC-Japan or any of its
Subsidiaries by such Party or such Affiliate at the request of such Party as
contemplated by Section 6.06 of the New Master Agreement.

     "SENA" means Semiconductor North America, Inc., a Delaware corporation.

     "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

                                       6

<PAGE>

          (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 Operative Document, when used in relation to a Party or any of its
Affiliates, shall not include FVC, FVC-Japan 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.

     "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 FVC or FVC-Japan at the
request of either Member to (i) implement changes in the manufacturing processes
to be employed for Products to be manufactured for such Member (or its
Affiliates) that are not agreed to by the other Member, (ii) commence
manufacturing other Products for the requesting Member (or its Affiliates) that
the other Member 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 Member (or its
Affiliates).

     "Units" means the units of contribution (shussi mochibun) in FVC-Japan, 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.

     "Virginia Act" means the Virginia Limited Liability Company Act, as in
effect from time to time.

                                       7

<PAGE>

     "Yokkaichi Facility" means the manufacturing facility owned and operated by
Toshiba in Yokkaichi-shi, Japan.

                                  Article II.

                Rules of Construction and Documentary Conventions
                -------------------------------------------------

     Section 2.01 Amendment and Waiver. (a) No amendment to or waiver of any
                  --------------------
agreement or instrument incorporating these Rules of Construction and
Documentary Conventions shall be effective unless it shall be in writing,
identify with specificity the provisions of the applicable agreement or
instrument that are thereby amended or waived and be signed by each party
thereto. Any failure of a party to comply with any obligation, covenant,
agreement or condition contained in such agreement or instrument may be waived
by the party entitled to the benefits thereof only by a written instrument duly
executed 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.

     Section 2.02 Severability. If any provision of any agreement or instrument
                  ------------
incorporating these Rules of Construction and Documentary Conventions 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 such agreement or instrument (except as may be expressly
provided in such agreement or instrument) or invalidate or render unenforceable
such provision in any other jurisdiction. To the extent permitted by applicable
law, the Parties waive any provision of law that renders any provision of such
agreement or instrument invalid, illegal or unenforceable in any respect. The
Parties 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 Operative
Documents, considered as a single transaction, cannot be preserved, the
Operative Documents shall either be renegotiated or terminated by mutual
agreement of the Parties.

     Section 2.03 Survival. Except as may otherwise be specifically provided in
                  --------
any agreement or instrument incorporating these Rules of Construction and
Documentary conventions, all covenants, agreements, representations and
warranties of the Parties made in or pursuant to such agreement or instrument
shall survive the execution and delivery of such agreement or instrument and the
closing of the transactions contemplated thereby, notwithstanding any
investigation by or on behalf of any party. Further, the provisions set forth in
Article II hereof shall survive and shall apply with respect to any terminated
agreement which incorporated these Rules of Construction and Documentary
Conventions.

     Section 2.04 Assignment. Except as may otherwise be specifically provided
                  ----------
in any agreement or instrument incorporating these Rules of Construction and
Documentary Conventions, a party thereto shall not transfer, or grant or permit
to exist any Lien (except Permitted Liens) on, such agreement or instrument or
any of its rights thereunder (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

                                       8

<PAGE>

consent of the other parties) without the prior written consent of each other
party thereto (which consent may be withheld in each such other party's sole
discretion), and any such purported transfer or Lien without such consent shall
be void.

     Section 2.05 Remedies; Force Majeure. In no event, except in the case of
                  -----------------------
fraud, will any party to any agreement or instrument incorporating these Rules
of Construction and Documentary Conventions (except as may be otherwise
expressly provided therein) be liable to another party thereto for special,
indirect, punitive or incidental damages, lost profits, lost savings or any
other consequential damages, even if such party has been advised of the
possibility of such damages, resulting from the breach by it of any of its
obligations thereunder or breach by it or any of its Affiliates of any of their
respective obligations under any other Operative Document or from the use of any
confidential or other information.

     (a) Except as may otherwise be specifically provided in any agreement or
instrument incorporating these Rules of Construction and Documentary
Conventions, the rights and remedies of the parties under such agreement or
instrument are cumulative and are not exclusive of any rights or remedies which
the parties would otherwise have. Equitable relief, including the remedies of
specific performance and injunction, shall be available with respect to any
actual or attempted breach of such agreement or instrument; 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 Section 10.03 of the New Master Agreement until
the parties have attempted to resolve the subject dispute by following said
dispute resolution process to its conclusion.

     (b) If the due date for any amount required to be paid under an Operative
Document incorporating these Rules of Construction and Documentary Conventions
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 FVC or FVC-Japan pursuant to any Operative Document
incorporating these Rules of Construction and Documentary Conventions, such
party shall have an additional 30 day period to make alternative arrangements to
provide such support.

     Section 2.06 Parties in Interest; Limitation on Rights of Others. Any
                  ---------------------------------------------------
agreement or instrument incorporating these Rules of Construction and
Documentary Conventions shall be binding upon and inure to the benefit of the
parties thereto and their permitted successors and assigns. Nothing in any such
agreement or instrument, whether express or implied, shall give or be construed
to give any Person (other than the parties thereto and their permitted
successors and assigns) any legal or equitable right, remedy or claim under or
in respect of such agreement or instrument, unless such Person is expressly
stated in such agreement or instrument to be entitled to any such right, remedy
or claim.

     Section 2.07 Table of Contents; Headings. The Table of Contents and Article
                  ---------------------------
and Section headings to any agreement or instrument incorporating these Rules of
Construction

                                       9

<PAGE>

and Documentary Conventions 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.

     Section 2.08 Counterparts; Effectiveness. Any agreement or instrument
                  ---------------------------
incorporating these Rules of Construction and Documentary Conventions may be
executed by the parties thereto 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. Any agreement or instrument
incorporating these Rules of Construction and Documentary Conventions shall not
become effective until one or more counterparts have been executed by each party
thereto and delivered to the other parties thereto.

     Section 2.09 Entire Agreement. Any agreement or instrument incorporating
                  ----------------
these Rules of Construction and Documentary Conventions, together with the other
Operative Documents and the Exhibits, Schedules, Appendices and Attachments
thereto, any agreement entered into simultaneously therewith, and the Initial
Business Plan, when completed, constitute the agreement of the parties to the
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.

     Section 2.10 Construction. References in any agreement or instrument
                  ------------
incorporating these Rules of Construction and Documentary Conventions to any
gender include references to all genders, and references in any such agreement
or instrument to the singular include references to the plural and vice versa.
Unless the context otherwise requires, the term "party" when used in any such
agreement or instrument means a party to such agreement or instrument.
References in any such agreement or instrument to a party or other Person
include their respective permitted successors and assigns. The words "include",
"includes" and "including", when used in any such agreement or instrument, shall
be deemed to be followed by the phrase "without limitation". Unless the context
otherwise requires, references used in any such agreement or instrument to
Articles, Sections, Exhibits, Schedules, Appendices and Attachments shall be
deemed references to Articles and Sections of, and Exhibits, Schedules,
Appendices and Attachments to, such agreement or instrument. Unless the context
otherwise requires, the words "hereof", "hereby" and "herein" and words of
similar meaning when used in any such agreement or instrument refer to such
agreement or instrument in its entirety and not to any particular Article,
Section or provision of such agreement or instrument. Any reference to an
Operative Document shall include such Operative Document as amended or
supplemented from time to time in accordance with the provisions thereof.

     Section 2.11 Official Language. The official language of any agreement
                  -----------------
incorporating these Rules of Construction and Documentary Conventions is the
English language only, which language shall be controlling in all respects, and
all versions of any such agreement in any other language shall not be binding on
the parties thereto or nor shall such other versions be admissible in any legal
proceeding, including arbitration, brought under such agreement. All
communications and notices to be made or given pursuant to any such agreement
shall be in the English language.

     Section 2.12 Governing Law. Any agreement incorporating these Rules of
                  -------------
Construction and Documentary Conventions shall be governed and construed as to
all matters

                                       10

<PAGE>

including validity, construction and performance by and under the substantive
laws of the State of California, unless such agreement expressly provides
otherwise.

     Section 2.13 Waiver of Jury Trial and Certain Damages. Each party to any
                  ----------------------------------------
Operative Document incorporating these Rules of Construction and Documentary
Conventions waives, to the fullest extent permitted by applicable law, (i) any
right it may have to a trial by jury in respect of any action, suit or
proceeding arising out of or relating to any Operative Document and (ii) absent
fraud, any right it may have to receive damages or indemnification from any
other party to any Operative Document in respect of any act, omission or event
relating to such Operative Document or the transactions contemplated by the
Operative Documents based on any theory of liability for any special, indirect,
consequential or punitive damages. Each party to any such agreement or
instrument (x) certifies that no representative, agent or attorney of another
party has represented, expressly or otherwise, that such other party would not,
in the event of litigation, seek to enforce the foregoing waiver and (y)
acknowledges that it has been induced to enter into such agreement or instrument
by, among other things, the mutual waivers and certifications set forth above in
this Section 2.13.

     Section 2.14 Arbitration. Each party to any agreement or instrument
                  -----------
incorporating these Rules of Construction and Documentary Conventions hereby
agrees to adhere to the dispute resolution procedures described in Section 10.03
of the New Master Agreement with respect to any disputes, grievances or actions
arising thereunder.

     Section 2.15 Notices. All notices and other communications to be given to
                  -------
any party under any agreement or instrument incorporating these Rules of
Construction and Documentary Conventions 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:

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

            Attention: President and CEO

                                       11

<PAGE>

         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

     (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 FVC-Japan:

            FlashVision, Ltd.
            800 Yamanoisshikicho,
            Yokkaichi, Mie, Japan

            Attention: President and CEO

                                       12

<PAGE>

         With a copy to:

            SanDisk Corporation
            140 Caspian Court
            Sunnyvale, CA 94089
            Telephone: (408) 542-0510
            Facsimile: (408) 542-0640
            Attention: General Manager, NAND Division

            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

     Section 2.16 Definitions. The definitions set forth in Article I of this
                  -----------
Appendix A shall apply to this Article II.

                                       13<PAGE>

                                                                   Exhibit 10.31

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

                             NEW OPERATING AGREEMENT

                           Dated as of April 10, 2002

                                     between

                               TOSHIBA CORPORATION

                                       and

                               SANDISK CORPORATION

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

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>
ARTICLE I     Definitions, Rules of Construction and Documentary Conventions ................  1

     SECTION 1.01     Certain Definitions ...................................................  1
     SECTION 1.02     Additional Definitions ................................................  2
     SECTION 1.03     Rules of Construction and Documentary Conventions .....................  2

ARTICLE II    General Provisions ............................................................  3

     SECTION 2.01     Sale of Units; Capital Increase; Distribution of Units ................  3
     SECTION 2.02     Name ..................................................................  4
     SECTION 2.03     Principal Office ......................................................  4
     SECTION 2.04     Term; Extension .......................................................  4
     SECTION 2.05     (Intentionally Blank) .................................................  4
     SECTION 2.06     Scope of Activity .....................................................  4
     SECTION 2.07     Powers ................................................................  4
     SECTION 2.08     Articles of Incorporation .............................................  4
     SECTION 2.09     Company Actions .......................................................  4

ARTICLE III   Business Operations ...........................................................  4

     SECTION 3.01     Business Dealings with the Company ....................................  4
     SECTION 3.02     Other Activities ......................................................  5
     SECTION 3.03     Seconded Employees ....................................................  5
     SECTION 3.04     Business Plans and Related Matters ....................................  5
     SECTION 3.05     Standard of Care ......................................................  7
     SECTION 3.06     Use of Names ..........................................................  7

ARTICLE IV    Actions by the Unitholders ....................................................  7

     SECTION 4.01     Matters Requiring the Approval of the Unitholders .....................  7
     SECTION 4.02     General Meetings of Unitholders .......................................  9
     SECTION 4.03     Restrictions on Unitholders ........................................... 10

ARTICLE V     Management and Operations of Company .......................................... 10

     SECTION 5.01     Meetings of the Board of Directors .................................... 10
     SECTION 5.02     Officers; Employees ................................................... 15
     SECTION 5.03     Insurance ............................................................. 16
     SECTION 5.04     Records ............................................................... 16

ARTICLE VI    Capital Contributions; Distributions .......................................... 17
</TABLE>

                                       i

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                                        Page
<S>                                                                                     <C>
      SECTION 6.01     Capital Contributions ..........................................  17
      SECTION 6.02     Distributions ..................................................  17
      SECTION 6.03     No Interest ....................................................  18
      SECTION 6.04     Return of Capital Contributions ................................  18

ARTICLE VII    (Intentionally Blank) ..................................................  18

ARTICLE VIII   Accounting and Taxation ................................................  18

      SECTION 8.01     Financial Accounting Conventions ...............................  18
      SECTION 8.02     Maintenance of Books of Account ................................  18
      SECTION 8.03     Financial Statements ...........................................  18
      SECTION 8.04     Other Reports and Inspection ...................................  20
      SECTION 8.05     Characterization ...............................................  20
      SECTION 8.06     Deposit of Funds ...............................................  20

ARTICLE IX     Units of Contribution; Disposition of Units ............................  21

      SECTION 9.01     Restrictions on Transfer of Units ..............................  21
      SECTION 9.02     Admission of New Unitholders ...................................  22
      SECTION 9.03     Withdrawal Prohibited ..........................................  23
      SECTION 9.04     Purchase of Additional Interest ................................  23

ARTICLE X      Certain Agreements of the Unitholders ..................................  23

      SECTION 10.01    (Intentionally Blank) ..........................................  23
      SECTION 10.02    Taxes and Charges; Governmental Rules ..........................  23
      SECTION 10.03    Further Assurances .............................................  23
      SECTION 10.04    Dispute Resolution; Deadlock Respecting Business Plan ..........  23
      SECTION 10.05    Remedies Upon Event of Default; Termination on Breach ..........  25
      SECTION 10.06    (Intentionally Blank) ..........................................  25
      SECTION 10.07    Mechanics of Sale ..............................................  25

ARTICLE XI     Dissolution ............................................................  26

      SECTION 11.01    Events of Dissolution ..........................................  26
      SECTION 11.02    Dissolution by Agreement .......................................  26
      SECTION 11.03    Dissolution Upon Event of Default ..............................  27
      SECTION 11.04    Dissolution by Unilateral Option ...............................  27
      SECTION 11.05    Dissolution upon Notice ........................................  27
</TABLE>

                                       ii

<PAGE>
                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                                     Page
<S>                                                                                  <C>
     SECTION 11.06     Winding Up ..................................................  27
     SECTION 11.07     Liquidation Proceeds ........................................  28
     SECTION 11.08     Additional Contribution .....................................  28

ARTICLE XII    Indemnification and Insurance .......................................  28

     SECTION 12.01     Indemnification .............................................  28
     SECTION 12.02     Insurance ...................................................  29
     SECTION 12.03     Indemnification by the Unitholders ..........................  30
     SECTION 12.04     Assertion of Claims .........................................  30

ARTICLE XIII   Miscellaneous .......................................................  30

     SECTION 13.01     Governing Law ...............................................  30
     SECTION 13.02     Effectiveness ...............................................  31
     SECTION 13.03     Conflict with Articles ......................................  31
</TABLE>

Exhibit A          Articles of Incorporation of the Company
Schedule 6.01      Capital Contributions
Schedule 8.03      Monthly Reports

                                       iii

<PAGE>

            NEW OPERATING AGREEMENT of FLASHVISION, LTD., a Japanese limited
liability company (yugenkaisha), dated as of April 10, 2002, between TOSHIBA
CORPORATION, a Japanese corporation ("Toshiba"), and SANDISK CORPORATION, a
Delaware corporation ("SanDisk").

            WHEREAS, FLASHVISION, LTD. (the "Company") is a Japanese limited
liability company (yugenkaisha) whose units of contribution (shussi mochibun),
the par value of one unit (Shussi-hitokuchi-no-kingaku) being JPY5,000 (the
"Units"), are wholly owned by Toshiba;

            WHEREAS, Toshiba, through its wholly-owned subsidiary, SEMICONDUCTOR
NORTH AMERICA, INC., and SanDisk entered into the Operating Agreement dated May
9, 2000, and pursuant to such Operating Agreement, formed FLASHVISION, L.L.C., a
Virginia limited liability company ("FVC"); and

            WHEREAS, SanDisk and Toshiba intend to cause FVC to purchase all the
Units of the Company from Toshiba pursuant to the New Master Agreement, dated as
of the date hereof, by and between SanDisk and Toshiba (the "New Master
Agreement"); and

            WHEREAS, SanDisk and Toshiba desire to enter into this New Operating
Agreement in accordance with the Japan Act and the Articles of Incorporation of
the Company (as amended from time to time, the "Articles") in order to provide
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:

                                   ARTICLE I

                       Definitions, Rules of Construction
                           and Documentary Conventions

            SECTION 1.01 Certain Definitions.

                 (a) Capitalized terms used but not defined in this Agreement
shall have the respective meanings assigned to them in the Definitions, Rules of
Construction and Documentary Conventions, attached as Appendix A (the "Rules
Document") to the New Master Agreement. Capitalized terms used but not defined
in this Agreement or the Rules Document shall have the respective meanings
assigned to them in the New Master Agreement.

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

                                       1

<PAGE>

            SECTION 1.02 Additional Definitions. The following capitalized terms
used in this Agreement shall have the respective meanings assigned in the
sections indicated below:

            Term                                          Defined in
            ----                                          ----------
            "Articles"                                    Recitals
            "Bankruptcy Event"                            Section 11.01(f)
            "Claim"                                       Section 12.04(a)
            "Company"                                     Recitals
            "Deadlock"                                    Section 10.04(c)
            "Deadlock Dissolution Notice"                 Section 10.04(d)
            "Defaulting Unitholder"                       Section 10.05
            "Designated Individuals"                      Section 10.04(b)
            "Director(s)"                                 Section 3.05 (a)
            "FVC Capital"                                 Section 2.02(b)(i)
            "General Meeting of Unitholders"              Section 4.01(b)
            "Indemnified Party"                           Section 12.04(a)
            "Indemnifying Party"                          Section 12.04(a)
            "Initiating Unitholder"                       Section 10.04(d)
            "Losses"                                      Section 12.01(a)
            "New Master Agreement"                        Recitals
            "Nondefaulting Unitholder"                    Section 10.05
            "Notified Party"                              Section 11.05
            "Notifying Party"                             Section 11.05
            "Permissible Assignee"                        Section 9.01(c)
            "Permissible Assignment Agreement"            Section 9.01(c)
            "Price Per Unit"                              Section 2.01(b)(i)
            "Responding Unitholder"                       Section 10.04(d)
            "Rules Document"                              Section 1.01(a)
            "Termination Date"                            Section 11.04
            "Transition Period"                           Section 2.01(c)
            "Units"                                       Recitals
            "Units Distribution"                          Section 2.01(b)(v)
            "Units Sale"                                  Section 2.01(a)
            "Unitholder"                                  Section 2.01(c)

            SECTION 1.03 Rules of Construction and Documentary Conventions. The
rules of construction and documentary conventions set forth in the Rules
Document shall apply to, and are hereby incorporated in, this Agreement.

                                       2

<PAGE>

                                   ARTICLE II

                               General Provisions

            SECTION 2.01 Sale of Units; Capital Increase; Distribution of Units.

                (a) As soon as practicable following the Closing, Toshiba shall
sell to FVC, and Toshiba and SanDisk shall cause FVC to purchase from Toshiba,
all of the Units for a cash payment, by wire transfer of immediately available
Japanese Yen, in the amount of JPY [***] (the "Units Sale").

                (b) Toshiba and SanDisk agree to take the following actions, in
the order listed, as soon as practicable following the Units Sale:

                    (i)   cause the Company to authorize the increase of the
     capital in the Company by 1,000 Units, and cause FVC to subscribe to
     purchase all of such increase by means of a cash payment, by wire transfer
     of immediately available Japanese Yen, in an amount equal to fifty percent
     (50%) of the result of (A) the amount of paid in capital of FVC
     ($300,000,000) minus (B) the amount paid by FVC to Toshiba to acquire all
     of the outstanding Units pursuant to Section 2.01(a) above ([***]) (the
     amount resulting from subtracting subsection (B) from subsection (A)
     hereinafter referred to as the "FVC Capital"); then

                    (ii)  cause FVC to sell to the Company the FVC Owned
     Equipment for a cash payment, by wire transfer of immediately available
     Japanese Yen, in an amount equal to the [***] thereof as of April 30, 2002;
     then

                    (iii) cause the Company to authorize the increase of the
     capital in the Company by 1,000 Units, and cause FVC to subscribe to
     purchase all of such increase by means of a cash payment, by wire transfer
     of immediately available Japanese Yen, in an amount equal to fifty percent
     (50%) of the FVC Capital; then

                    (iv)  cause FVC to be dissolved and liquidated by filing or
     causing to be filed, in accordance with the Virginia Act, the Certificate
     of Cancellation attached as Exhibit B to the New Master Agreement; then

                    (v)   cause the Units held by FVC to be distributed to the
     Toshiba and SanDisk on a pro rata basis based upon the respective
     Percentages of the Unitholders as of the date of such distribution (the
     "Units Distribution").

                (c) The holders of the Units shall be hereinafter called the
"Unitholders." For purposes of this Agreement, during the period beginning upon
consummation of the Units Sale and ending immediately prior to the Units
Distribution (the "Transition Period"), Toshiba and SanDisk, as members of FVC
(which shall hold all of the Units during the Transition Period), shall be
deemed to be the Unitholders (Toshiba being deemed the Unitholder of 50.1% of
the outstanding Units, and SanDisk being deemed the Unitholder of 49.9% of the
outstanding Units).

                                       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.

<PAGE>

                          (d)  The rights and obligations of the Unitholders
shall be as set forth in the Japan Act, except as provided herein.

         SECTION 2.02 Name. The name of the Company is "FLASHVISION YUGEN
KAISHA", which translates to "FLASHVISION, LTD." in English, and all Company
business shall be conducted in that name or such other name as the Unitholders
shall mutually agree.

         SECTION 2.03 Principal Office. The principal office of the Company
shall be located in Yokkaichi, Mie, or such other place as the Unitholders may
designate by mutual agreement from time to time in accordance with the Articles
and the Japan Act.

         SECTION 2.04 Term; Extension. The Company shall be terminated on
December 31, 2016, unless extended by mutual written agreement of all of the
Unitholders or earlier terminated in accordance with Article XI (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, 2015,
to discuss the possible extension of the term of the Company.

         SECTION 2.05 (Intentionally Blank)

         SECTION 2.06 Scope of Activity. The scope of activity of the Company
shall be to manufacture or to cause to be manufactured Products and the sale of
NAND Flash Memory Products to the Unitholders and their Affiliates, with the
objective of meeting the demand of each Unitholder for NAND Flash Memory
Products.

         SECTION 2.07 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 2.06 (Scope of Activity).

         SECTION 2.08 Articles of Incorporation. The Articles of the Company in
effect as of the date hereof are as attached hereto as Exhibit A. In the event
of any conflict between this Agreement and the Articles, the terms of this
Agreement shall prevail.

         SECTION 2.09 Company Actions. The Unitholders hereby authorize the
Company, and ratify (including for purposes of Section 4.01 (Matters Requiring
the Approval of the Unitholders)) all action having been taken by or on behalf
of the Company prior to the date hereof, to execute and deliver the Operative
Documents to which it is or is specified to be a party, including all
certificates, agreements and other documents required in connection therewith.

                                  ARTICLE III

                               Business Operations

         SECTION 3.01 Business Dealings with the Company. Subject to the
provisions set forth in Sections 4.01(a) (Matters Requiring the Approval of the
Unitholders) and

                                       4

<PAGE>

5.01(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 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.

         SECTION 3.02 Other Activities. During the term of this Agreement and
except as set forth in Section 6.03(d) of the New Master Agreement, no
Unitholder 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 Unitholders; (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 Article VI of the New Master Agreement, as such
capacity limitations may be amended from time to time in accordance with Article
VI of the New Master Agreement. For the avoidance of doubt, nothing contained in
the foregoing shall restrict the Unitholders 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 Yokkaichi
Facility (subject to the capacity limitations set forth in Article VI of the New
Master Agreement, as such capacity limitations may be amended from time to time
in accordance with Article VI of the New Master Agreement). For purposes of this
Section 3.02, NAND Flash Memory Integrated Circuits shall mean ICs included in
the definition of NAND Flash Memory Products pursuant to Section 2.01 of the New
Master Agreement.

         SECTION 3.03 Seconded Employees. The Unitholders agree that all
Seconded Employees, during their period of assignment to the Company, are
expected to devote their best efforts to promote the interests and success of
the Company and to perform their work for the Company in good faith under the
direction of the Company's management. Each Unitholder agrees to encourage
Seconded Employees assigned to the Company by such Unitholder to be dedicated to
the best interests and success of the Company.

         SECTION 3.04 Business Plans and Related Matters.

                                        5

<PAGE>

               (a)  Initial and Subsequent Business Plans. The 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 the [***], will be agreed upon and certified
by the Board of Directors as soon as practicable after the Closing.

                    (i)   The Unitholders acknowledge that 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
     3.04(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 [***] preceding the
     commencement of such Fiscal Year.

                    (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
     officers 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 5.01(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.

               (c)  Approval. Other than the initial Business Plan (which shall
be approved in accordance with Section 3.04(a) above), the Board of Directors
shall vote upon the proposed Business Plan, with such modifications as it may
deem necessary, before February 15 preceding the commencement of each Fiscal
Year. Subject to Sections 10.04(c), (d) and (e) (Dispute Resolution; Deadlock
Respecting Business Plan), 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

                                        6

[***] 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.

<PAGE>

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.

          SECTION 3.05  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:

                    (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.

          SECTION 3.06  Use of Names. Except as may be expressly provided in the
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.

                                   ARTICLE IV

                           Actions by the Unitholders

          SECTION 4.01  Matters Requiring the Approval of the Unitholders.

               (a)  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 prior unanimous written approval
of the Unitholders:

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

                    (ii)  any amendment to or renewal of any 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;

                                       7

<PAGE>

                    (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 JPY 5,000,000 in
     one transaction or a series of related transactions, other than 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
     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 JPY 5,000,000 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
     JPY 1,000,000 or an increase in aggregate Indebtedness in excess of JPY
     1,000,000 in any calendar quarter, other than as authorized by Section
     5.01(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 9.01(a) and the Rules Document,
     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 Article XI (Dissolution));

                                       8

<PAGE>

                    (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);

                    (xiv)  any increase 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 4.01(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 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 Section 10.04(a) and (b) (Dispute Resolution; Deadlock Respecting
Business Plan).

          SECTION 4.02  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
so agree, by conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each other, provided
that such communications equipment continues to be operational throughout the
meeting.

                                       9

<PAGE>

               (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 5.04 (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 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.

          SECTION 4.03  Restrictions on Unitholders. As between the 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 Article XI (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.

                                   ARTICLE V

                      Management and Operations of Company

          SECTION 5.01  Meetings of the Board of Directors.

               (a)  General. Except as otherwise provided herein (including but
not limited to Section 4.01 (Matters Requiring the Approval of the Unitholders)
and Section 5.02 (Officers; Employees)), 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.

               (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 designated by Toshiba, and
     the other three (3) of which shall be designated by SanDisk; provided that
     the total number of Directors of the Company may be changed by mutual
     agreement of the Unitholders.

                                       10

<PAGE>

                (ii)   Directors shall be elected for a one (1) year term, and
    shall be 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, 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.

                (iv)   Each Unitholder shall bear any cost incurred by any
    Director designated 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 and facsimile
    numbers of each Director that such Member has appointed to the Board of
    Directors. Each Unitholder shall promptly notify the other Unitholder and
    the Company of any change in such Unitholder's appointments 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.

                (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
    5.01(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.

                (ix)   Any resolution of the Board of Directors may be adopted
    by obtaining the written consent of each Director.

            (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.

                                       11

<PAGE>

                (ii)  Notice of any regular meeting or special meeting pursuant
    to Section 5.01(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 5.01(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.

                (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 5.01(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)  The minutes of each meeting of the Board of Directors
    shall be sent by facsimile to all Directors within twenty (20) calendar
    days after such meeting. Material to be presented at a Board of Directors
    meeting shall be sent by facsimile or delivered in hard copy 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.

                (v)   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 consent of
    the Directors pursuant to this Section 5.01(c)(v).

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

                                       12

<PAGE>

                (vii)  At each meeting, the Board of Directors shall consider
    (A) any of the items set forth in Section 5.01(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 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.

                (viii) 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.

                (ix)   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 5.01(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 JPY 1,000,000 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
    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 JPY 1,000,000 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;

                                       13

<PAGE>

                (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 JPY1,000,000 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 5.02(a) (Officers; Employees) who are not Seconded Employees, 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 6.03 (Public
    Announcements) of the New 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;

                                       14

<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 5.01(c)(ix), 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; and

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

          SECTION 5.02 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 and the Representative
Director/Executive Vice President, each of whom shall be elected by the Board of
Directors from among the Directors designated alternately by Toshiba and SanDisk
to serve successive three-year terms, subject to the consent of the
non-appointing Unitholder, which consent shall not unreasonably be withheld.
Notwithstanding the foregoing, the first term of the Representative
Director/President/Chief Executive Officer held by Toshiba shall expire on June
30, 2003. In addition, 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. Toshiba shall appoint the Company's first Representative
Director/President/Chief Executive Officer and SanDisk shall appoint the
Company's first Representative Director/Executive Vice President.

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

            (c) Subject to the terms and conditions of Section 6.06 of the New
Master Agreement, each Unitholder may assign to the Company, as Seconded
Employees, employees whom such Unitholder believes are capable of performing the
assignment and likely to contribute to the success of the Company and to have a
positive impact on the Company's

                                       15

<PAGE>

business environment. Any liabilities in respect of the employment of Seconded
Employees assigned to work for the Company shall be retained by the relevant
Unitholder (or its Subsidiary) that assigned such Seconded Employee to the
Company; provided, however, financial responsibility for the salary,
employment-related Taxes, benefits and temporary expenses relating to Seconded
Employees shall be allocated as provided in Section 6.06 (Personnel) of the New
Master Agreement. Seconded Employees other than the Company's executive officers
referred to in Section 5.02(a) (Officers; Employees) may be removed for cause by
the Company's management and may be removed with or without cause by the Board
of Directors. The Board of Directors shall have the right to terminate the
services of the Company's executive officers referred to in Section 5.02(a)
(Officers; Employees) with or without cause, in any manner permissible under
Section 5.01 (Meetings of the Board of Directors).

               (d)    The Company will have agreements with and policies
applicable to each of its officers, employees and consultants who are not
Seconded Employees, in forms acceptable to each Unitholder, and shall also have
appropriate arrangements with its Seconded Employees, 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
Seconded Employees, by agreement of the Board of Directors, non-competition.

        SECTION 5.03  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.

        SECTION 5.04  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 JPY 5,000,000 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;

                                       16

<PAGE>

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

               (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.

                                   ARTICLE VI

                      Capital Contributions; Distributions

          SECTION 6.01  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 6.01.

               (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.

          SECTION 6.02  Distributions.

               (a)  General. Notwithstanding any provision of the Articles to
the contrary, and subject to Section 11.07 (Liquidation Proceeds), unless
otherwise agreed by the Unitholders, no distributions of cash (or in the case of
Section 11.07 (Liquidation Proceeds), 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
11.07 (Liquidation Proceeds), other property) by the Company to the Unitholders
shall be made in Japanese Yen at the times and in the amounts determined by the
Unitholders. Except as provided in Section 11.07 (Liquidation Proceeds), 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 the provisions of
Section 6.02(a), 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

                                       17

<PAGE>

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 distribution made to SanDisk pursuant to
this Section 6.02(b). Any such prior distributions shall be taken into account
upon any purchase and sale of Units under Article X herein or dissolution of the
Company under Article XI herein.

          SECTION 6.03  No Interest. No interest shall be payable to the
Unitholders on their Capital Contributions or otherwise in respect of the
capital of the Company.

          SECTION 6.04  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.

                                  ARTICLE VII

                              (Intentionally Blank)

                                  ARTICLE VIII

                            Accounting and Taxation

          SECTION 8.01  Financial Accounting Conventions.

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

               (b)  Notwithstanding anything to the contrary in the Rules
Document, the first Fiscal Year shall begin on April 10, 2002 and end on March
31, 2003.

          SECTION 8.02  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.

          SECTION 8.03  Financial Statements.

               (a)  Annual Statements. As soon as practicable following the end
of each Fiscal Year (and in any event not later than sixty (60) 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 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

                                       18

<PAGE>

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 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. As soon as practicable following the
end of each Fiscal Quarter (and in any event not later than fifteen (15) 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. Such financial statements 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 Federal, state, and local income or
franchise tax purposes.

               (c)  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 8.03. Such reports and other information will become
available at the respective times set forth on Schedule 8.03.

               (d)  Business Plan. Subject to Sections 10.04(c), (d) and (e),
and provided that the most recently approved Business Plan does not provide for
the next Fiscal Year, the Company shall, not later than February 15 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.

                                       19

<PAGE>

               (e)  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.

        SECTION 8.04  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.

        SECTION 8.05  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 disregarded entity at all times during the Transition
Period and as a partnership at all times following the expiration of the
Transition Period, 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.

        SECTION 8.06  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.

                                   ARTICLE IX

                   Units of Contribution; Disposition of Units

        SECTION 9.01  Restrictions on Transfer of Units.

                                       20

<PAGE>

               (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 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 Operative Document to which the transferring Unitholder is
a party 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 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 9.01.

               (b)  If a Unitholder Transfers its entire interest in the Company
pursuant to Section 9.01(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
          Article VI or XI 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;

                                       21

<PAGE>

                    (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 9.01(a) of
     this Agreement 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.

          SECTION 9.02  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 a Unitholder's Units to
an Affiliate of such Unitholder in accordance with Section 9.01 (Restrictions on
Transfer of Units), such Person, the terms and conditions of such Person's
admission as a Unitholder and the 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 may reasonably deem
appropriate to affirm that the representations and warranties contained in the
New 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 9.01 (Restrictions on Transfer of Units)
or this Section 9.02.

          SECTION 9.03  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

                                       22

<PAGE>

written consent of all other Unitholders (which consent may be withheld in such
other Unitholder's sole discretion).

          SECTION 9.04   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 Article XI 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.

                                   ARTICLE X

                      Certain Agreements of the Unitholders

          SECTION 10.01  (Intentionally Blank)

          SECTION 10.02  Taxes and Charges; Governmental Rules. Each Unitholder
shall (a) promptly pay all applicable Taxes and other governmental charges
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.

          SECTION 10.03  Further Assurances. Following the Closing, each
Unitholder shall, and shall cause its Affiliates, FVC and the Company to take
all reasonable actions necessary or appropriate to, effectuate the transactions
contemplated by this Agreement, and to obtain (and cooperate 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.

          SECTION 10.04  Dispute Resolution; Deadlock Respecting Business Plan.

               (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 5.01(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 10.04(c), (d) and (e) shall apply.

               (b)  If (i) the Unitholders are unable to agree on any matter
requiring the approval of the Unitholders pursuant to Section 4.01(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 5.01(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 10.04(c), (d) and (e)) or
(iii) the Unitholders or

                                       23

<PAGE>

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 10.04(c), (d) and (e)), then any
Unitholder may bring the matter to the attention of the Vice President,
Semiconductor Company of Toshiba, and the SanDisk General Manager, NAND Division
(the "Designated Individuals"), who will attempt to find a resolution. If the
matter has not been resolved within 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 10.04(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 10.03(b)
(Dispute Resolution) of the New Master Agreement. 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 10.04(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)  If by February 15 of any calendar year during the term of
this Agreement, commencing February 15, 2004, 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 decision shall be final and binding on the
Company and the Unitholders. If a decision is reached by mutual 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").

               (d)  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 [***] of the Company as of
the date of such transaction multiplied by the Initiating Unitholder's
Percentage as of such date.

               (e)  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 10.04 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 11.01(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

                                       24

[***] 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.

<PAGE>

with the most recently approved Business Plan except that additional capital
expenditures will not be made except as required for line maintenance.

          SECTION 10.05  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 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 Net Book Value of the Company as of the date of such transaction
multiplied by the Defaulting Unitholder's Percentage as of such date; and/or

               (b)  elect to dissolve the Company pursuant to Section 11.03
(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 Article
XI (Dissolution).

          SECTION 10.06  (Intentionally Blank)

          SECTION 10.07  Mechanics of Sale.

               (a)  The closing of any purchase and sale of Units pursuant to
Section 10.04(e) (Dispute Resolution; Deadlock Respecting Business Plan),
10.05(a) (Remedies Upon Event of Default; Termination on Breach), 11.04
(Dissolution by Unilateral Option) or 11.05 (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 Seconded Employees 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 10.04(e) (Dispute Resolution; Deadlock
Respecting Business Plan), 10.05(a) (Remedies Upon Event of Default; Termination
on Breach), 11.04 (Dissolution by Unilateral Option) or 11.05 (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

                                       25

[***] 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.

<PAGE>

determined pursuant to Section 10.07(a) (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.

                                   ARTICLE XI

                                   Dissolution

          SECTION 11.01  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 2.04 (Term; Extension);

               (b)  the agreement of the Unitholders to dissolve the Company
pursuant to Section 11.02 (Dissolution by Agreement);

               (c)  the election of the Nondefaulting Unitholder pursuant to
Section 11.03 (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
Section10.04(d) (Dispute Resolution; Deadlock Respecting Business Plan) 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 11.04 (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 11.05 (Dissolution Upon Notice) unless the Notified Party
elects to purchase the Units of the Notifying Party pursuant to Section 11.05
(Dissolution Upon Notice).

          SECTION 11.02  Dissolution by Agreement. The Company may be dissolved
at any time by the unanimous written consent of the Unitholders.

          SECTION 11.03  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 11.06
(Winding Up). This Section 11.03 shall not be construed to limit the rights of
the

                                       26

<PAGE>

Nondefaulting Unitholder under Section 10.05 (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 Operative Documents.

          SECTION 11.04  Dissolution by Unilateral Option. At any time between
April 1, 2003 and March 31, 2004, 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 one (1) year following SanDisk's notice to withdraw (the
"Termination Date") for a cash payment, by wire transfer of immediately
available Japanese Yen, in an amount equal to the Net Book Value of the Company
as of the Termination Date multiplied by SanDisk's Percentage as of the
Termination Date, and increased or decreased, as the case may be, for any cash
contributions by or distributions to the Unitholders after the date of the
notice, or (ii) dissolve the Company and wind-up its affairs in accordance with
Section 11.06 (Winding Up) within one (1) year of the notice of withdrawal and
make such payment to SanDisk on the Termination Date.

          SECTION 11.05  Dissolution upon Notice. At any time during the one (1)
year period following the eighth anniversary of May 16, 2000 (which was the date
of formation of FVC), 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 11.06 (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 Net Book Value of the Company as of the date of such transaction
multiplied by the Notifying Party's Percentage as of such date.

          SECTION 11.06  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 and (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 Operative Document or to
offer to enter into any other agreement with a prospective purchaser of the
Company for the purchase or sale of goods or services or the use of facilities
or any other business arrangement. 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 11.03 (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.

                                       27

<PAGE>

               (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.

          SECTION 11.07  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 6.02 (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 11.07, 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 11.07 shall
be made as soon as practicable under and in accordance with applicable Japanese
law.

          SECTION 11.08  Additional Contribution. No Unitholder shall be
obligated to contribute any additional amounts to the Company or otherwise be
liable for the debts and obligations of the Company.

                                  ARTICLE XII

                          Indemnification and Insurance

          SECTION 12.01  Indemnification.

               (a)  Subject to Section 12.01(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,

                                       28

<PAGE>

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 12.01 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 12.01 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 12.01
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 12.01, 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 Seconded Employee 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 12.01(c)
(Indemnification).

          SECTION 12.02  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 12.01.

          SECTION 12.03  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.

                                       29

<PAGE>

               (b)  The provisions of this Section 12.03 shall survive each of
the termination of this Agreement, the dissolution of the Company and the
withdrawal of any Unitholder.

          SECTION 12.04  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 Article XII, 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 Parties
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.

                                  ARTICLE XIII

                                  Miscellaneous

          SECTION 13.01  Governing Law. Notwithstanding anything to the contrary
in the Rules Document, 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.

          SECTION 13.02  Effectiveness. Notwithstanding anything to the contrary
in the Rules Document, this Agreement shall be effective as of April 10, 2002.

          SECTION 13.03  Conflict with Articles. In the event of any conflict
between this Agreement and the Articles, the provisions of this Agreement shall
control, and the

                                       30

<PAGE>

conflicting provisions of the Articles shall be deemed to have been waived by
the Parties, to the extent permissible under applicable law.

                    [REST OF PAGE INTENTIONALLY LEFT BLANK]

                                       31

<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/ Takeshi Nakagawa
                                          --------------------------------------
                                          Name:  Takeshi Nakagawa
                                          Title: Corporate Senior Vice President
                                                 President & CEO
                                                 Semiconductor Company

                                      SANDISK CORPORATION

                                      By: /s/ Eli Harari
                                          --------------------------------------
                                          Name:  Eli Harari
                                          Title: President and Chief Executive
                                                 Officer

                  [SIGNATURE PAGE TO NEW OPERATING AGREEMENT]

<PAGE>

                                    EXHIBIT A

                    ARTICLES OF INCORPORATION OF THE COMPANY

<PAGE>

                                  SCHEDULE 6.01

                              CAPITAL CONTRIBUTIONS

The Unitholders shall be deemed to have made Capital Contributions to the
Company in the amounts set forth opposite their respective names below:

Unitholder                        Capital Contribution
----------                        --------------------

Toshiba Corporation ............    JPY 7,515,000

SanDisk Corporation ............    JPY 7,485,000
                                  ---------------

         Total .................   JPY 15,000,000

<PAGE>

                                  SCHEDULE 8.03

                                 MONTHLY REPORTS

This Schedule provides a list of Unitholder required reports, pursuant to
Section 8.03(c) (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

REPORT TITLE                                        DATE DUE
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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}]]