Document:

exv10w3

 

EXHIBIT 10.3

FOIA Confidential Treatment Requested

Execution Version

SECOND AMENDED AND RESTATED

COMMON R&D AND PARTICIPATION AGREEMENT

This SECOND AMENDED AND RESTATED COMMON R&D AND PARTICIPATION AGREEMENT, dated as of July 7, 2006,
is made and entered into by and between Toshiba Corporation, a Japanese corporation with a
principal place of business at 1-1, Shibaura 1-chome, Minato-ku, Tokyo 105-8001, Japan (hereinafter
“Toshiba”), and SanDisk Corporation, a Delaware corporation, with a principal place of
business at 601 McCarthy Boulevard, Milpitas, CA 95035, U. S. A. (hereinafter “SanDisk” and
collectively with Toshiba, the “Parties”).

WHEREAS, Toshiba and SanDisk Corporation are parties to that certain Amended and Restated Common
R&D and Participation Agreement, dated as of September 10, 2004 (the “Prior Agreement”);
and

WHEREAS, Toshiba and SanDisk desire to amend and restate the Prior Agreement with the effect of
superceding the Prior Agreement from and after the date of this Agreement.

NOW, THEREFORE, the parties agree as follows:

Article 1. DEFINITIONS

          1.1 “Contract Technology” shall mean [*].

          1.2 “AMC” shall mean the Advanced Microelectronics Center, Toshiba’s development engineering
facility located in Yokohama, Japan.

          1.3 “SanDisk Personnel” shall mean SanDisk’s engineers from the technology areas of
process/device/design, assigned to participate in the Development Work (as defined in Section 2.1)
to be performed at AMC or other Toshiba facilities to be mutually agreed upon by the Parties. A
written list of such SanDisk Personnel shall be mutually agreed to by the Common R&D
Representatives.

          1.4 “Effective Date” shall mean July 7, 2006.

          1.5 “Solely Developed Patents” shall mean patents, utility models (excluding design patents)
and any applications therefor which arise out of the inventions made solely by the employees of
either Party during the performance of the Development Work hereunder.

          1.6 “Jointly Developed Patents” shall mean patents, utility models (excluding design patents)
and any applications therefor which arise out of the inventions jointly made by the employees of
Toshiba and SanDisk during the performance of Development Work hereunder.

 

			
	*	 	Indicates that certain information
contained herein has been omitted and filed separately with the Securities and
Exchange Commission. Confidential treatment has been requested with respect to
the omitted portions.

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          1.7 “Agreement” shall mean this Second Amended and Restated Common R&D and Participation
Agreement together with any Exhibits, Schedules, Appendices and Attachments hereto including
Appendix A to the Master Agreement, which is incorporated herein by this reference.

          1.8 “FP Master Agreement” shall mean that certain Flash Partners Master Agreement, dated as of
September 10, 2004, by and among Toshiba, SanDisk and SanDisk (Cayman) Limited.

          1.9 “Flash Alliance Master Agreement” shall mean that certain Flash Alliance Master Agreement,
dated as of the date hereof, by and among Toshiba, SanDisk and SanDisk (Ireland) Limited.

          1.10 “Residuals” shall mean that technical information which may be retained in the memories
of SanDisk Personnel who have had rightful access to Toshiba’s proprietary information and Contract
Technology.

          1.11
“Common R&D Effective Date” shall mean May 9, 2000.

Article 2. DEVELOPMENT COLLABORATION

          2.1 SanDisk will send, and Toshiba will receive, such number of SanDisk Personnel as are
mutually agreed upon, at AMC or other Toshiba facilities during the term of this Agreement in order
for SanDisk to participate in the development work of the Contract Technology as set forth in
Exhibit B (the “Development Work”), which may be modified by Toshiba and SanDisk
from time to time and in accordance with the direction of Toshiba, subject to review and discussion
by the Common R&D Representatives (as defined below) at the quarterly meetings; provided that such
modification to the Development Work shall not materially affect SanDisk’s permitted access to the
Contract Technology. For avoidance of doubt, it is agreed by the Parties that SanDisk shall not
have any right to have access to, and SanDisk Personnel shall not have access to, any technical
information or data which are not relevant or necessary to perform the Development Work or any
technical information or data for which access by SanDisk Personnel is prohibited by any binding
contract of Toshiba and any third party, and that no right or license is granted to SanDisk with
respect to said technical information or data. The project managers of SanDisk and Toshiba shall
periodically discuss, determine and monitor the details of the Development Work; provided that in
case of any dispute between the respective project managers, the manager of Toshiba may determine
such details, taking into consideration the reasonable input made by SanDisk, subject to review and
discussion by the Common R&D Representatives at the quarterly meetings. In order to perform the
Development Work, Toshiba shall (at its sole expense) provide the SanDisk Personnel with sufficient
office equipment, including personal computers and telephones.

          2.2 Immediately after the Effective Date, each Party shall designate three (3) appropriate
individuals who will constitute the Common R&D Representatives (the “Common R&D
Representatives”). The Common R&D Representatives will meet regularly (quarterly), to

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review, discuss and determine direction of NAND future project plans and SanDisk participation
in the Development Work.

          2.3 SanDisk shall ensure that its SanDisk Personnel comply with the safety, security and all
other applicable practices, regulations of Toshiba and specific instructions or directions to be
made by Toshiba while such SanDisk Personnel are in Toshiba’s facilities. Except as provided in
the Master Agreement, SanDisk agrees to be responsible for all salaries, benefits, expense
reimbursements and other payments to its SanDisk Personnel and workers insurance for SanDisk
Personnel and shall indemnify and hold Toshiba harmless from any claims against Toshiba arising out
of any injury to any SanDisk Personnel.

          2.4 Except as provided in the FP Master Agreement or Flash Alliance Master Agreement, as
applicable, SanDisk shall be responsible for the living, traveling and all other out-of-pocket
expenses for its SanDisk Personnel.

          2.5 The amendment and restatement in Section 7 is conditioned upon Toshiba considering in good
faith SanDisk’s requests (i) to provide SanDisk with the opportunity to manage the Common R&D
expenditure base (project selection, team development, etc.), (ii) to have SanDisk actively
participate in the entire Development Work and (iii) to ensure to the maximum extent practicable
the cooperation between SanDisk and Toshiba’s engineering, development and technology teams (e.g.
open communication, joint planning of experiments, timely sharing of wafers (for first hand
analysis by SanDisk) and Toshiba’s results of wafer testing), it being understood that the final
determination regarding such requests is to be made by Toshiba, subject to review and discussion by
the Common R&D Representatives at the quarterly meetings. SanDisk shall take appropriate action to
preserve the confidentiality of (and restrict the distribution within SanDisk of) the information
learned in the course of Development Work or any activities contemplated hereunder.

          2.6 [*]

          2.7 [*]

Article 3. OWNERSHIP

          3.1 All technical information provided by any Party in the course of the development of the
Contract Technology shall remain the exclusive property of said Party; provided that, Toshiba shall
have a non-exclusive, worldwide and royalty-free license to use, reproduce and otherwise dispose of
such technical information for any purpose.

          3.2 All technical information, inventions and intellectual property rights resulting therefrom
(but specifically excluding patents) made or generated by Toshiba and/or SanDisk Personnel in the
course of the Development Work shall be the exclusive property of Toshiba; provided that, SanDisk
shall have the right and license set forth in Section 4.

 

			
	*	 	Indicates that certain information
contained herein has been omitted and filed separately with the Securities and
Exchange Commission. Confidential treatment has been requested with respect to
the omitted portions.

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          3.3 Any Solely Developed Patent of Toshiba shall be and remain the exclusive property of
Toshiba, subject to the licenses granted to SanDisk in accordance with Section 4.1.

          3.4 Any Solely Developed Patent of SanDisk shall be and remain the exclusive property of
SanDisk, subject to the licenses granted to Toshiba in accordance with Section 4.3.

          3.5 Any right, title and interest in, to and under Jointly Developed Patents shall be jointly
owned by Toshiba and SanDisk. Each Party shall be free to use such Jointly Developed Patents for
any purpose and shall have the right to grant non-exclusive licenses to any third party without the
consent of the other Party and shall have no duty to account to the other Party for any revenue
therefrom. Both parties shall promptly agree on which of them shall file and prosecute the first
patent application and which countries’ corresponding applications shall be filed and by whom. All
expenses incurred in obtaining and maintaining such patents shall be equally shared by the parties;
provided that if one Party elects not to seek or maintain such patents in any particular country or
not to share equally in the expense thereof, the other Party shall have the right to seek or
maintain such patents in said country at its own expense and shall have full control over the
prosecution and maintenance thereof even though title to any patent issuing thereon shall be joint.
The Party electing not seek or maintain such patents shall give the other Party any necessary
assistance required for the preparation and prosecution of such patents filed or maintained by the
other Party.

          3.6 It is understood by the parties that either Party may perform development of any products
or process independently of the development of the Contract Technology hereunder. This Agreement
is not intended to limit such independent development involving technology or information of a
similar nature to the Contract Technology.

Article 4. LICENSE

          4.1 Toshiba grants to SanDisk a non-exclusive, non-transferable, worldwide and royalty-free
license, without the right to sublicense, under its Solely Developed Patents to develop, have
developed, make, have made, use, sell, modify and otherwise dispose of any semiconductor products.

          4.2 Subject to SanDisk’s confidentiality obligations under Section 8 and the provisions of
Sections 3, 6, 7 and 10, SanDisk shall be free to use, improve or modify without additional
compensation to Toshiba the Residuals, including the use, improvement or modification of such
Residuals in the development and manufacture of SanDisk’s products; provided that this Section, by
itself, shall not be deemed to grant to SanDisk any rights or licenses under any patents of Toshiba
nor shall this Section operate to waive SanDisk’s confidentiality obligations under Section 8. In
no event shall such SanDisk Personnel or SanDisk publish or disseminate said Residuals to any third
party.

          4.3 SanDisk grants to Toshiba a non-exclusive, non-transferable, worldwide and royalty-free
license, without the right to sublicense, under its Solely Developed Patents to

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develop, have developed, make, have made, use, sell, modify and otherwise dispose of any
semiconductor products.

          4.4 Toshiba shall prepare and transfer to the Yokkaichi Facility (as defined in Appendix
A) documentation for NAND process concerning the Contract Technology for production at the
Yokkaichi Facility; provided, however, that SanDisk may have access to such documentation at such
facilities but shall have no right to disclose or transfer it to any third party.

Article 5. COMMON R&D EXPENDITURE

          5.1 Unless otherwise mutually agreed upon by the Parties, no Common R&D for non-NAND Flash
Memory technology shall be performed at the Y3 Facility or Y4 Facility. Provided Toshiba continues
to develop and advance NAND Flash Memory technology for the benefit of both parties pursuant to the
FVC Japan Operative Documents, the FP Operative Documents, the Flash Alliance Operative Documents
and the other Joint Operative Documents, SanDisk hereby agrees to share Toshiba’s Common R&D
expenditures and shall pay to Toshiba its portion of such Common R&D expenditures in accordance
with this Section 5.1:

               (a) Within thirty (30) days of the end of each calendar quarter for the calendar quarters from
April 1, 2006 to March 31, 2007 based on SanDisk’s Net Sales of NAND Flash Memory Products for the
quarter just ended as follows:

	 	(i)	 	[*]
	 
	 	(ii)	 	[*]
	 
	 	(iii)	 	[*]

               (b) Within thirty (30) days of the end of each calendar quarter for the calendar quarters from
April 1, 2007 to March 31, 2009 based on SanDisk’s Net Sales of NAND Flash Memory Products for the
quarter just ended as follows:

	 	(i)	 	[*]
	 
	 	(ii)	 	[*]
	 
	 	(iii)	 	[*]

               (c) [*]

               (d) For purposes of this Section 5.1, “Net Sales of NAND Flash Memory Products” shall mean
[*]:

	 	(i)	 	[*]

 

			
	*	 	Indicates that certain information
contained herein has been omitted and filed separately with the Securities and
Exchange Commission. Confidential treatment has been requested with respect to
the omitted portions.

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	 	(ii)	 	[*]
	 
	 	(iii)	 	[*]

               (e) Notwithstanding Sections 5.1(a), (b) and (c) and subject to Section 5.1(f), SanDisk’s
quarterly contribution for Common R&D pursuant to Sections 5.1(a), (b), (c) and (d) shall not
exceed the sum of (i) [*] of the total Common R&D annual expenditure of the Semiconductor Company
of Toshiba, as notified to SanDisk by Toshiba at the beginning of each Toshiba fiscal year (“Total
R&D Budget”) for the first [*] of the Total R&D Budget and (ii) [*] of the portion of such Total
R&D Budget in excess of [*].

               (f) In the event that any Common R&D activities have been done [*] pursuant to Section
6.6(a)(i) of the FP Master Agreement or [*] pursuant to Sections 6.1 or 6.8(a)(i) of the Flash
Alliance Master Agreement, SanDisk shall bear any and all charges incurred by each of Flash
Partners or Flash Alliance from such Common R&D activities at, [*], and SanDisk’s total
contribution for Common R&D charges pursuant to (a), (b), (c), (d) and (e) of this Section 5.1
shall be reduced by such SanDisk Y3 &Y4 Common R&D Charges; in the event such SanDisk Y3 & Y4
Common R&D Charges exceed in any given quarter the amount for such quarter set forth in paragraphs
(a), (b), (c), (d) and (e) of this Section 5.1, unless otherwise agreed upon by the Parties, [*] of
SanDisk Y3 & Y4 Common R&D Charges shall be borne directly by SanDisk and no payment by SanDisk to
Toshiba for any such Common R&D expenditures shall be made for that given quarter pursuant to (a),
(b), (c), (d) and (e) of this Section 5.1, provided, however, that to the extent of any such excess
amount that has been incurred from Common R&D activities [*] performed without consent of SanDisk,
[*] of the applicable portion of such amount shall be borne by Toshiba.

               (g) The amount of the Total R&D Budget shall be subject to verification if requested by
SanDisk by disclosing internal Toshiba documents to an independent certified public accountant
appointed by SanDisk which shall verify the stated amount of the Total R&D Budget, by written
certification to SanDisk by the appropriate officer of the Semiconductor Company of Toshiba. Such
verification shall be conducted, at SanDisk’s cost and expense, during normal business hours of
Toshiba and not more frequently than annually.

               (h) Within 45 days of the start of each of its fiscal years, Toshiba shall provide SanDisk
with a 1-2 day detailed presentation of Toshiba’s process development activity at AMC and other
Toshiba facilities for the previous calendar year and forecasted activity for the new fiscal year
as such activity relates to or affects NAND Flash Memory. Any expenses incurred for such
presentation shall be borne by the Party incurring such expenses.

          5.2 Payments made pursuant to this Agreement shall constitute SanDisk’s sole financial
obligation with respect to any and all Common R&D charges from (or through) any Toshiba source.

 

			
	*	 	Indicates that certain information
contained herein has been omitted and filed separately with the Securities and
Exchange Commission. Confidential treatment has been requested with respect to
the omitted portions.

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          5.3 Payments of the fees provided for in Section 5.1 (other than Section 5.1(a), 5.1(b) and
5.1(c)), which payments shall be made on or before the dates specified therein) shall be made by
SanDisk within sixty (60) days after receiving the invoice to be issued by Toshiba at the end of
each applicable calendar quarter. For the purpose of Toshiba’s issuance of such invoices, SanDisk
shall submit to Toshiba, within 30 days following the end of each quarter after April 1, 2006, a
written report stating the quantity and Net Sales of NAND Flash Memory Products sold or otherwise
disposed of by SanDisk during the applicable quarter.

          5.4 All payments under Section 5.1 shall be made in Japanese yen by wire transfer of
immediately available funds to the following account or such other account as may be designated by
Toshiba to SanDisk in writing:

     [*]

     Where the provisions of this Agreement require the conversion of an amount initially computed
in another currency into Japanese Yen, the Japanese Yen amount payable shall be calculated using
the New York foreign exchange mid range rates (Currency per US Dollars) published in The Wall
Street Journal, Western Edition, on the last day such journal is published in the calendar quarter
immediately preceding the date of payment.

          5.5 All payments provided for in Section 5.1 shall be made without deduction of taxes;
provided, however, that in the event any withholding income tax is imposed by U.S. tax authorities
on any amount payable to Toshiba hereunder, SanDisk may withhold such income tax from such amount
to the extent that Toshiba may obtain a tax credit against its Japanese income tax. SanDisk shall
without undue delay obtain and send to Toshiba tax certificates evidencing the tax amount withheld
and paid to U.S. tax authorities.

          5.6 In the event any compensation payable to Toshiba by SanDisk under this Agreement becomes
overdue other than as a result of any action or inaction on the part of Toshiba, Toshiba shall be
entitled to request SanDisk to pay interest at twelve percent (12%) per annum until such
compensation is paid.

          5.7 Toshiba shall have the right, at its sole cost and expense, to have an independent
certified public accountant conduct during normal business hours and not more frequently than
annually, an audit of the appropriate records of SanDisk to verify the number of units of Toshiba
Foundry NAND Flash Memory Products, FVC Japan NAND Flash Memory Products, Y3 NAND Flash Memory
Products and Y4 NAND Flash Memory Products sold or otherwise disposed of by SanDisk and SanDisk’s
calculation of the fees and Net Sales pursuant to Section 5.1.

 

			
	*	 	Indicates that certain information
contained herein has been omitted and filed separately with the Securities and
Exchange Commission. Confidential treatment has been requested with respect to
the omitted portions.

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Article 6. WARRANTY

          6.1 Each Party provides to the other Party its technical information on an “as-is” basis only,
and does not make any warranty or representation with respect to such technical information for any
purpose.

          6.2 Nothing contained in this Agreement shall be construed as:

               (a) a warranty or representation that the manufacture, use, sale or other disposal of
semiconductor products by the other Party using any technical information received under this
Agreement will be free from infringement of patents or any other intellectual property rights of
any third Party;

               (b) conferring the other Party any right to use in advertising, publicity or otherwise any
trademark, trade name or names, or any contraction, abbreviation or simulations thereof of either
Party;

               (c) conferring the other Party, by implication, estoppel or otherwise, any license or other
right, except for the licenses and rights expressly granted hereunder; and

               (d) an obligation to furnish any technical information or know-how except as otherwise
specifically provided herein.

Article 7. LIMITATION OF LIABILITY

IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL,
INCIDENTAL OR INDIRECT DAMAGE OF ANY KIND, (INCLUDING LOSS OF PROFIT OR DATA) WHETHER OR NOT
ADVISED OF THE POSSIBILITY OF SUCH LOSS.

Article 8. CONFIDENTIALITY

          8.1 As used in this Agreement, the term “Confidential Information” shall mean any information
disclosed by Toshiba to SanDisk pursuant to this Agreement which is in written, graphic, machine
readable or other tangible form and is marked “Confidential”, “Proprietary” or in some other manner
to indicate its confidential nature. Confidential Information may also include oral information
disclosed by Toshiba to SanDisk pursuant to this Agreement, provided that such information is
designated in a manner to indicate its confidential nature at the time of disclosure and reduced to
a written summary by Toshiba within thirty (30) days after its oral disclosure. For avoidance of
doubt, all information observed by or disclosed to SanDisk Personnel at Toshiba’s facilities shall
be treated as Toshiba Confidential Information.

          8.2 During the [*] years period following receipt of such information, the
receiving Party shall keep any Confidential Information, including the technical information
SanDisk has access to at AMC during the course of the development of the Contract Technology

 

			
	*	 	Indicates that certain information
contained herein has been omitted and filed separately with the Securities and
Exchange Commission. Confidential treatment has been requested with respect to
the omitted portions.

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hereunder, in strict confidence, and shall not disclose such Confidential Information to any
third party without prior written consent of the disclosing Party. The receiving Party shall
maintain the Confidential Information with at least the same degree of care that the receiving
Party uses to protect its own strictly confidential information, but no less care than is
reasonable under the circumstances. Further, the receiving Party shall not use the Confidential
Information for any purposes other than for the development of the Contract Technology hereunder,
except as otherwise provided herein.

          8.3 Neither Party shall disclose the terms and conditions of this Agreement to any third party
other than in compliance with any government regulation, without prior written consent of the other
Party.

          8.4 The confidentiality obligation set forth in Sections 8.2 and 8.3 above shall not apply to
any information which:

     (a) is already known to the receiving Party at the time of disclosure;

     (b) is or becomes publicly through no fault of the receiving Party;

     (c) is rightfully received by the receiving Party from a third party without any
restriction on disclosure;

     (d) is independently developed by the receiving Party;

     (e) is disclosed with the prior written consent of the disclosing Party hereunder;
or

     (f) is disclosed pursuant to applicable laws, regulations or court order; provided,
that the receiving Party shall give the disclosing Party prompt notice of such request
so that the disclosing Party has an opportunity to defend, limit or protect such
disclosure.

          8.5 Each Party understands that disclosure or dissemination of the other Party’s Confidential
Information not expressly authorized hereunder would cause irreparable injury to such other Party,
for which monetary damages would not be an adequate remedy and said other Party shall be entitled
to equitable relief in addition to any remedies the other Party may have hereunder or at law. In
the event SanDisk is to enter into any joint development work with any third party other than a
tool vendor, SanDisk warrants that Toshiba Confidential Information provided to SanDisk in
connection with the development of the Contract Technology shall neither be used for such joint
development work nor be disclosed to any third party unless expressly otherwise provided hereunder.
If SanDisk desires to work with a tool vendor and to disclose Toshiba’s Confidential Information
to the tool vendor, SanDisk shall first discuss the matter in advance with Toshiba including why it
considers such disclosure to be necessary or appropriate. Any such disclosure shall remain subject
to Toshiba’s written consent in each instance, which it may withhold or condition in its sole
discretion to protect its interests in its Confidential Information.

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Article 9. TERM AND TERMINATION

          9.1 This Agreement shall become effective on the Common R&D Effective Date and continue in
full force and effect until the later of the termination of the FVC Japan Master Agreement, the FP
Master Agreement or the Flash Alliance Master Agreement, unless earlier terminated as hereinafter
provided. The term of this Agreement may be extended by mutual agreement of both parties. This
Agreement shall automatically terminate upon termination of the FVC Japan Master Agreement, the FP
Master Agreement or the Flash Alliance Master Agreement, whichever is later.

          9.2 If either Party fails to perform or breaches any of its material obligations under this
Agreement, then, upon sixty (60) days written notice specifying such failure or breach, the
non-defaulting Party shall have the right to terminate this Agreement forthwith, unless the failure
or breach specified in the notice has been cured during the sixty (60) day period. Termination of
this Agreement pursuant to this Section 9.2 shall not relieve the breaching Party from any
liability arising from any breach of this Agreement and such termination shall be without prejudice
to any other rights and remedies of the non-breaching Party provided at law or in equity, in
addition to the rights and remedies set forth in this Agreement.

          9.3 Either Party shall have the right to terminate this Agreement by giving written notice to
the other Party upon the occurrence of any of the following events:

               (a) the filing by the other Party of a voluntary petition in bankruptcy or insolvency;

               (b) any adjudication that such other Party is bankrupt or insolvent;

               (c) the filing by such other Party of any legal action or document seeking reorganization,
readjustment or arrangement of its business under any law relating to bankruptcy or insolvency;

               (d) the appointment of a receiver for all or substantially all of the property of such other
Party; or

               (e) the making by such other Party of any assignment of whole or substantial assets for the
benefit of creditors.

     This Agreement shall terminate on the thirtieth (30th) day after such notice of termination is
given.

          9.4 The provisions of Sections 3, 6, 7, 8, 9 and 10 and Appendix A shall survive any
termination or expiration of this Agreement. The provisions of Section 4 shall survive the
expiration of this Agreement; provided that SanDisk has paid to Toshiba the total amount of fees
required to be paid in Section 5.

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Article 10. GENERAL PROVISIONS

          10.1 Neither Party is required to disclose any information of which disclosure is prohibited
by laws of the country of such Party.

          10.2 Neither Party shall export or re-export, directly or indirectly, any technical
information disclosed hereunder or direct product thereof to any destination prohibited or
restricted by the export control regulations of Japan or the United States, including the U.S.
Export Administration Regulations, without the prior authorization from the appropriate
governmental authorities. Neither Party will use technical information supplied by the other Party
hereunder for any purpose to develop or manufacture nuclear, chemical, biological weapons or
missiles (hereafter “weapons of mass destruction”). Each Party agrees that it will not knowingly
sell any products manufactured using the other Party’s technical information to any third party if
it knows that the end-user of the products will use them for the development and/or manufacture of
the weapons of mass destruction.

          10.3 The rules of construction and documentary conventions set forth in Appendix A to
the Master Agreement shall apply to, and are hereby incorporated in, this Agreement.

[Rest of Page Intentionally Blank]

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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate,
as of the date first written above, by their duly authorized officers or representatives.

	 	 	 	 	 	 	 	 	 	 	 
	Toshiba Corporation	 	 	 	SanDisk Corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Masashi Muromachi
	 	 	 	Name:
	 	Eli Harari	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	President and CEO
	 	 	 	Title:
	 	Chief Executive Officer	 	 
	 

	 	Semiconductor Company	 	 	 	 	 	 	 	 
	 

	 	Corporate Executive Vice President	 	 	 	 	 	 	 	 

[Signature page to Amended and Restated Common R&D and Participation Agreement]

 

 

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EXHIBIT A

(Contract Technology)

[*]

      

      

      

      

      

      

 

			
	*	 	Indicates that certain information
contained herein has been omitted and filed separately with the Securities and
Exchange Commission. Confidential treatment has been requested with respect to
the omitted portions.

 

 

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EXHIBIT B

(Development Work for Contract Technology)

[*]

      

      

      

      

      

      

 

			
	*	 	Indicates that certain information
contained herein has been omitted and filed separately with the Securities and
Exchange Commission. Confidential treatment has been requested with respect to
the omitted portions.exv10w4

 

EXHIBIT 10.4

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Execution Version

SECOND AMENDED AND RESTATED

PRODUCT DEVELOPMENT AGREEMENT

This SECOND AMENDED AND RESTATED PRODUCT DEVELOPMENT AGREEMENT, dated as of July 7, 2006, is made
and entered into by and between Toshiba Corporation, a Japanese corporation with a principal place
of business at 1-1, Shibaura 1-chome, Minato-ku, Tokyo 105-8001, Japan (“Toshiba”), and
SanDisk Corporation, a Delaware corporation with a principal place of business at 601 McCarthy
Boulevard, Milpitas, CA 95035, U. S. A. (“SanDisk,” and collectively with Toshiba, the
“Parties”).

WHEREAS, Toshiba and SanDisk are parties to that certain Amended and Restated Product Development
Agreement, dated as of September 10, 2004 (the “Prior Agreement”); and

WHEREAS, Toshiba and SanDisk desire to amend and restate the Prior Agreement with the effect of
superceding the Prior Agreement from and after the date of this Agreement;

NOW, THEREFORE, the parties agree as follows:

ARTICLE 1. DEFINITIONS

	1.1	 	“Products” shall mean the NAND Flash Memory devices developed hereunder, including
the NAND Flash Memory devices specified in Exhibit A attached hereto, but excluding Flash
Memory Controllers.
	 
	1.2	 	“ Flash Memory Controller” shall mean any firmware, hardware and/or software that is
necessary to operate a NAND Flash Memory device.
	 
	1.3	 	“Developed Products” shall mean Products solely developed by either Party during the term of
this Agreement, including solely developed derivatives of Jointly Developed Products; provided
however, that Developed Products shall not include cut-downs of Jointly Developed Products.
	 
	1.4	 	“Jointly Developed Products” shall mean Products jointly developed by Toshiba and SanDisk
during the term of this Agreement.
	 
	1.5	 	“Toshiba Developed Controller” shall mean a Flash Memory Controller solely developed by
Toshiba during the term of this Agreement, including solely developed derivatives of Jointly
Developed Controllers.
	 
	1.6	 	“SanDisk Developed Controller” shall mean a Flash Memory Controller solely developed by
SanDisk during the term of this Agreement, including solely developed derivatives of Jointly
Developed Controllers.
	 
	1.7	 	“Jointly Developed Controller” shall mean a Flash Memory Controller developed by Toshiba and
SanDisk during the term of this Agreement.

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	1.8	 	“Development Project” shall mean all development activities undertaken pursuant to Article 2.
	 
	1.9	 	“Background Technology” shall mean the Technology which has been or will be developed by or
for either Party independently of the Development Projects and owned or controlled by such
Party prior to or during the term of this Agreement, and which shall be deemed reasonably
necessary for the other Party to perform the Development Projects. Background Technology may
be either SanDisk Background Technology or Toshiba Background Technology, as the context
requires.
	 
	1.10	 	“Technology” shall mean all developments, ideas, inventions, Test Technology and other
technical information (whether or not patentable) relating to Products as well as intellectual
property rights relating thereto, including trade secrets, copyrights and maskwork rights, but
specifically excluding Patents.
	 
	1.11	 	“Developed Technology” shall mean Technology solely developed by either Party in the course
of the Development Projects.
	 
	1.12	 	“Jointly Developed Technology” shall mean Technology jointly developed by Toshiba and SanDisk
in the course of the Development Projects.
	 
	1.13	 	“Test Technology” shall mean all developments, ideas, inventions, test programs, test
methods, configured and developed hardware and other technical information (whether or not
patentable) for all stages of product manufacture, as well as intellectual property rights
relating thereto, but specifically excluding Patents, concerning testing of Products and Flash
Memory Controllers.
	 
	1.14	 	“Controller Technology” shall mean all developments, ideas, inventions and technical
information (whether or not patentable) relating to Flash Memory Controllers and intellectual
property rights relating thereto, including, but not limited to, trade secrets, copyrights and
maskwork rights, but specifically excluding Patents.
	 
	1.15	 	“Jointly Developed Controller Technology” shall mean Controller Technology developed by
Toshiba and SanDisk during the term of this Agreement.
	 
	1.16	 	“Developed Controller Technology” shall mean Controller Technology solely developed by either
Party during the term of this Agreement.
	 
	1.17	 	“SanDisk Controllers” shall mean SanDisk Developed Controllers, Jointly Developed
Controllers, SanDisk Developed Controller Technology and Jointly Developed Controller
Technology.
	 
	1.18	 	“SanDisk Products and Technology” shall mean SanDisk Developed Products, SanDisk Background
Technology, SanDisk Developed Technology and SanDisk Controllers.

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	1.19	 	“Toshiba Products and Technology” shall mean Toshiba Developed Products, Toshiba Background
Technology, Toshiba Developed Technology, Toshiba Developed Controller Technology and Toshiba
Developed Controllers.
	 
	1.20	 	“Joint Products and Technology” shall mean Jointly Developed Products and Jointly Developed
Technology.
	 
	1.21	 	“Patents” shall mean all classes of types of patents, utility models (excluding design
patents) and any applications therefor in all countries of the world, which are, now or
hereafter, owned or controlled by either Party hereto.
	 
	1.22	 	“Jointly Developed Patents” shall mean Patents which arise out of the inventions jointly made
by the employees of Toshiba or SanDisk in the course of the Development Projects.
	 
	1.23	 	“Effective Date” shall be July 7, 2006.
	 
	1.24	 	“Agreement” means this Second Amended and Restated Product Development Agreement together
with any Exhibits, Schedules, Appendices and Attachments hereto and Appendix A.
	 
	1.25	 	“Master Agreement” shall mean that certain Flash Alliance Master Agreement, dated as of the
date hereof, by and among Toshiba, SanDisk and SanDisk (Ireland) Limited.
	 
	1.26	 	“Appendix A” shall mean the Definitions, Rules of Construction and Documentary Conventions,
attached as Appendix A to the Master Agreement.
	 
	1.27	 	“Direct R&D Effective Date” shall mean May 9, 2000.

ARTICLE 2. DEVELOPMENT

	2.1	 	Except as expressed in the Common R&D Agreement, each Party agrees to undertake at Toshiba’s
or SanDisk’s facilities (such facility or facilities to be determined by the Coordinating
Committee prior to commencement of the applicable Development Project) the Development
Projects specified in Exhibit A in accordance with a development schedule and activity
allocations to be determined by the Coordinating Committee. During the term of this
Agreement, the parties will use reasonable efforts to continually identify and pursue joint
development of new products and Exhibit A may be amended from time to time, in
accordance with the approval of the Coordinating Committee, to reflect such new Development
Projects.
	 
	2.2	 	Each Party shall, from time to time during the term of this Agreement and to the extent
reasonably necessary to perform the Development Projects, provide the other Party with
technical information relating to its Background Technology.

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	2.3	 	Each Party shall, from time to time during the term of this Agreement, provide the other
Party with technical information relating to Jointly Developed Technology and Jointly
Developed Controller Technology.
	 
	2.4	 	A Party that is in possession of Jointly Developed Technology, Jointly Developed Controller
Technology or other technical information, including the items specified in Exhibit C,
shall, upon request of the other party made at any time during the term of this Agreement or
for a period of one year thereafter, promptly deliver to the other Party copies of such
information as requested. When requested by either Party, such exchange of information, shall
include test flow conditions and related know-how.
	 
	2.5	 	During the term of this Agreement, upon request by either Party and subject to the
availability of the other Party’s engineers, the other Party shall (i) delegate its qualified
engineers to advise and consult with such requesting Party at the requesting Party’s
facilities or (ii) receive qualified engineers of the requesting Party to train and advise at
its own facilities. The details of such delegation or reception of the engineers shall be
decided by the Coordinating Committee as described in Article 3.
	 
	2.6	 	This Agreement shall not encompass or include products or technology developed jointly or
solely by the parties, utilizing or based on Toshiba NOR flash technology or other Toshiba
non-NAND Flash technologies, or SanDisk NOR flash technology or other SanDisk non-NAND flash
technologies.
	 
	2.7	 	Either Party may propose to disclose (the “Proposing Party”) Jointly Developed
Controller Technology to any Qualified Design House under a written agreement of
confidentiality and non-use, for a period of restriction generally to be discussed and agreed
upon by the Coordinating Committee, but if not so discussed or agreed upon, then for a period
of at least seven years, for the purpose of engaging such Qualified Design House to design a
solely developed Flash Memory Controller for the account of the Proposing Party to be
manufactured and sold by the Proposing Party. Prior to making such disclosure to a Qualified
Design House, the Proposing Party shall give the other Party to this Agreement (the
“Reviewing Party”) the opportunity to jointly develop such product with the Proposing
Party. The opportunity should be presented in detail at a meeting of the Coordinating
Committee and the Reviewing Party will be given a reasonable amount of time to consider the
proposal. If the Reviewing Party accepts the opportunity to enter into such joint
development, the Proposing Party shall not make the disclosure to the Qualified Design House.
For the purpose of this section, “Qualified Design House” shall mean a company which
offers services to design devices similar to Flash Memory Controllers but which does not make
or sell flash memory devices or flash cards.
	 
	2.8	 	Each of Toshiba and SanDisk agree to provide to the other Party certain information relating
to product development, including the information set forth in Exhibit D attached
hereto.

ARTICLE 3. COORDINATING COMMITTEE

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	3.1	 	Immediately after the Effective Date, the Parties shall jointly establish the “Coordinating
Committee” which shall be comprised of six (6) representatives; three (3) of which shall be
appointed by Toshiba and three (3) of which shall be appointed by SanDisk, which appointments
shall have been approved by each of the Parties; provided that such approval shall not be
unreasonably withheld.
	 
	3.2	 	The Coordinating Committee shall be responsible for:

	 	(a)	 	Determining new Products and Flash Memory Controllers to be jointly developed,
including product design and manufacturing specifications. All Product development
projects, including Flash Memory Controller development projects, and projects
considered by either Party for sole development, shall be disclosed to the Coordinating
Committee prior to the start of development;
	 
	 	(b)	 	Reviewing the progress of the Development Projects against the development
schedule and evaluating the Development Projects;
	 
	 	(c)	 	Discussing necessary changes to the scope or the schedules of the Development
Projects and actions to be taken;
	 
	 	(d)	 	Resolving any differences in opinions between the parties which may arise
during the course of the Development Projects;
	 
	 	(e)	 	Allocation of wafer processing costs as specified in Article 5;
	 
	 	(f)	 	Discussing inventorship of patents conceived by the parties as a result of any
joint development activity hereunder; and
	 
	 	(g)	 	Any other matters as agreed upon by both parties.

	 	 	All decisions by the Coordinating Committee, including any decision to jointly develop
Products or Flash Memory Controllers, shall be made unanimously and shall be set forth in
writing. If any matter is not determined by unanimous consent of the Coordinating
Committee, such matter shall be referred to Management Committee (as defined in the Master
Agreement) for its final decision. In connection with discussing inventorship of patents
pursuant to Section 3.2(f), the parties agree to notify the Coordinating Committee as soon
as possible, but not later than three (3) months after such Party’s knowledge of the filing
date of the particular patent.
	 
	3.3	 	The Coordinating Committee shall have periodical meetings which shall be led by the Technical
Coordinator of both Parties on a quarterly basis, or at such other intervals, alternatively in
the United States and in Japan or such other places as mutually agreed upon by the Technical
Coordinators of each Party. Either Party may invite other of its employees to attend such
meetings.

ARTICLE 4. TECHNICAL COORDINATORS

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Each Party shall designate from time to time its Technical Coordinator from its three members of
the Coordinating Committee to be appointed in accordance with Section 3.1. The Technical
Coordinator shall be responsible for supervision of transmittal and receipt of technical
information hereunder, coordinating the site visits by engineers and coordination of the training
and consultation to be performed hereunder. The incumbent Technical Coordinators for each Party
are as follows:

For Toshiba: [*]

For SanDisk: [*]

ARTICLE 5. COST

Each Party shall bear all costs and expenses incurred by such Party in performing the Development
Projects which will include the salaries of its engineers involved in joint development projects
hereunder. Notwithstanding the foregoing, in order to balance each Party’s cost for Jointly
Developed Products and Jointly Developed Flash Memory Controllers, SanDisk shall share Toshiba’s
direct costs of processing certain wafers to be made for the purpose of such Product design
verification (including mask costs) in the amounts set forth in Exhibit B. If either Party
believes there are significant additional costs (beyond direct costs) that should be shared (i.e.
other material costs such as subcontractors fees for packaging and analysis), the Parties will
discuss in good faith if any appropriate amount of such additional costs is to be shared between
the Parties. Similarly, Toshiba shall share the direct costs of processing certain wafers to be
made for the purpose of Flash Memory Controller verification (including mask costs) and other
material costs related thereto, such as subcontractor fees for packaging and analysis, in a manner
as determined by the Coordinating Committee but conceptually similar to the nature of the expenses
shared by SanDisk for Products.

ARTICLE 6. OWNERSHIP

	6.1	 	Toshiba Products and Technology shall be and remain the exclusive property of Toshiba,
subject to the license granted in accordance with Section 7.1. From time to time, upon
request of SanDisk, Toshiba shall offer SanDisk, based upon reasonable terms, a non-exclusive,
worldwide, non-transferable license, without right to sublicense, to develop, have developed,
make, have made, use, sell, modify and otherwise dispose of all or a portion of the Toshiba
Products and Technology.
	 
	6.2	 	Toshiba Patents shall be and remain the exclusive property of Toshiba, subject to the
licenses granted in accordance with the Patent Cross License Agreement between SanDisk
Corporation and Toshiba Corporation, as amended from time to time, the “Patent
Agreement”).
	 
	6.3	 	SanDisk Products and Technology shall be and remain the exclusive property of SanDisk,
subject to the licenses granted in accordance with Sections 7.2 and 7.3

 

			
	*	 	Indicates that certain information
contained herein has been omitted and filed separately with the Securities and
Exchange Commission. Confidential treatment has been requested with respect to
the omitted portions.

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	 	 	hereof. From time to time, upon request of Toshiba, SanDisk shall offer Toshiba, based upon
reasonable terms, a non-exclusive, worldwide, non-transferable license, without right to
sublicense, to develop, have developed, make, have made, use, sell, modify and otherwise
dispose of all or a portion of the SanDisk Products and Technology.
	 
	6.4	 	SanDisk Patents shall be and remain the exclusive property of SanDisk, subject to the
licenses granted in accordance with the Patent Agreement.
	 
	6.5	 	Any right, title and interest in and to Joint Products and Technology shall be jointly owned
by Toshiba and SanDisk. With the exception that neither Party may sublicense or transfer
Joint Products and Technology without the prior written consent of the other Party, each of
Toshiba and SanDisk has the right to use, fully exploit, disclose or otherwise dispose of such
Joint Products and Technology for any purpose without consent of nor accounting to the other
Party.
	 
	6.6	 	Any right, title and interest in and to Jointly Developed Patents shall be jointly owned by
Toshiba and SanDisk. Each Party shall be free to use such Jointly Developed Patents for any
purpose and shall have the right to grant non-exclusive licenses to any third Party without
the consent of nor accounting to the other Party. Both Parties shall promptly agree on which
of them shall file and prosecute the first patent application and which countries’
corresponding applications shall be filed and by whom. All expenses incurred in obtaining and
maintaining such patents shall be shared equally by the Parties; provided that if one Party
elects not to seek or maintain such patents in any particular country or not to share equally
in the expense thereof, the other Party shall have the right to seek or maintain such patents
in said country at its own expense and shall have full control over the prosecution and
maintenance thereof even though title to any patent issuing thereon shall be joint. The Party
electing not to seek or maintain such patents shall give the other Party any necessary
assistance required for the preparation and prosecution of such patents filed or maintained by
the other Party. Jointly Developed Patents shall not be considered “SanDisk Licensed Patents”
or “Toshiba Licensed Patents” as defined in the Patent Agreement.

ARTICLE 7. LICENSE

	7.1	 	Subject to the terms and conditions of this Agreement, Toshiba hereby grants to SanDisk a
non-exclusive, non-transferable, worldwide and royalty-free license, without the right to
sublicense, to use Toshiba Background Technology provided to SanDisk hereunder to develop,
have developed, make, have made, use, sell, modify and otherwise dispose of Products, SanDisk
Controllers and any other controller products designed by or for SanDisk.
	 
	7.2	 	Subject to the terms and conditions of this Agreement, SanDisk hereby grants to Toshiba a
non-exclusive, non-transferable, worldwide and royalty-free license, without the right to
sublicense, to use SanDisk Background Technology provided to

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	 	 	Toshiba hereunder to develop, have developed, make, have made, use, sell, modify and
otherwise dispose of Products, Toshiba Developed Controllers and other controller products
not designed or used for file storage.
	 
	7.3	 	Subject to the terms and conditions of this Agreement, SanDisk hereby grants to Toshiba a
non-exclusive, non-transferable, worldwide and royalty-free license, without the right to
sublicense, to make, have made, use, sell, modify and otherwise dispose of any Jointly
Developed Controllers.
	 
	7.4	 	It is understood that SanDisk has the right to use, fully exploit, disclose, sublicense,
transfer or otherwise dispose of SanDisk Controllers and any other controller product designed
by or for SanDisk without consent from or accounting to Toshiba, even if such SanDisk
Controllers or other controller products incorporate any Toshiba Background Technology.

ARTICLE 8. WARRANTY

	8.1	 	Toshiba and SanDisk each provides to the other Party its Background and Developed Technology
on an “as-is” basis only, and neither makes any warranty or representation with respect to the
Background Technology or Developed Technology for any purpose.
	 
	8.2	 	Nothing contained in this Agreement shall be construed as:

	 	(a)	 	a warranty or representation that the manufacture, use, sale or other disposal
of semiconductor products by the other Party using any technical information received
under this Agreement will be free from infringement of patents or any other
intellectual property rights of a third party;
	 
	 	(b)	 	conferring to the other Party any right to use in advertising, publicity or
otherwise any trademark, trade name or names, any contraction, abbreviation or
simulations thereof of either Party;
	 
	 	(c)	 	conferring to the other Party, by implication, estoppel or otherwise, any
license or other right except for the licenses and rights expressly granted hereunder;
or
	 
	 	(d)	 	an obligation to furnish any technical information or know-how except as
otherwise specifically provided herein.

ARTICLE 9. LIMITATION OF LIABILITY

Neither Party shall be responsible to the other Party in respect of any action taken or reliance
upon any information furnished to the other Party under this Agreement, except to the extent of any
breach of the warranties or agreements set forth in this Agreement. IN NO EVENT SHALL EITHER PARTY
BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGE OF ANY
KIND, (INCLUDING LOSS OF PROFIT OR DATA) WHETHER OR NOT ADVISED OF THE

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POSSIBILITY OF SUCH LOSS.

ARTICLE 10. CONFIDENTIALITY

	10.1	 	As used in this Agreement, the term “Confidential
Information” shall mean any information
disclosed by one Party (the “disclosing party”) to other Party (the “receiving
party”) pursuant to this Agreement which is in written, graphic, machine readable or other
tangible form and is marked Confidential, Proprietary or in some other manner to indicate its
confidential nature. Confidential Information may also include oral information disclosed by
one Party to the other Party pursuant to this Agreement; provided that such information is
designated in a manner to indicate its confidential nature at the time of disclosure and
reduced to a written summary by the disclosing party within thirty (30) days after its oral
disclosure.
	 
	10.2	 	During the [*] year period following receipt of such information, the receiving
party shall keep, and cause its Subsidiaries, its sublicensees and subcontractors who have
access to Confidential Information as permitted in this Agreement to keep, any Confidential
Information, including but not limited to Background Technology and Developed Technology
provided by the disclosing party hereunder, in strict confidence, and shall not disclose such
Confidential Information to any third party without the prior written consent of the
disclosing party. The receiving party shall maintain the Confidential Information with at
least the same degree of care that the receiving party uses to protect its own strictly
confidential information, but no less than a reasonable degree of care under the
circumstances. Further, the receiving party shall not use the Confidential Information for
any purpose other than for the Development Projects, except as otherwise provided herein.
	 
	10.3	 	Neither Party shall disclose the terms and conditions of this Agreement to any third party
without the prior written consent of the other Party.
	 
	10.4	 	The confidentiality obligation set forth in Articles 10.2 and 10.3 above shall not apply to
any information which:

	 	(a)	 	is already known by the receiving party at the time of disclosure;
	 
	 	(b)	 	is or becomes publicly known through no fault of the receiving party;
	 
	 	(c)	 	is rightfully received by the receiving party from a third party without any
restriction on disclosure;
	 
	 	(d)	 	is independently developed by the receiving party;
	 
	 	(e)	 	is disclosed with the prior written consent of the disclosing party hereto; or

 

			
	*	 	Indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to the
omitted portions.

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	 	(f)	 	is disclosed pursuant to applicable laws, regulations or court order, provided
that the receiving party shall give the disclosing party prompt notice of such request
so that the disclosing party has an opportunity to defend, limit or protect such
disclosure.

	10.5	 	Each Party understands that disclosure or dissemination of the other Party’s Confidential
Information, specifically Toshiba Background Technology provided to SanDisk in connection with
the Development Projects, not expressly authorized hereunder would cause irreparable injury to
such other Party, for which monetary damages would not be an adequate remedy and said other
Party shall be entitled to equitable relief in addition to any remedies the other Party may
have hereunder or at law. In the event SanDisk is to enter into any joint development work
with any third party, SanDisk warrants that Toshiba Background Technology provided to SanDisk
in connection with the Development Projects shall neither be used for such joint development
work nor be disclosed to any third party unless expressly otherwise provided hereunder.
	 
	10.6	 	The Technical Coordinator of each Party shall ensure that the other Party’s Technical
Coordinator is informed of and receives in sufficient detail and completeness the Background
and Developed Technology that is exchanged under Article 2. Each Technical Coordinator shall
also monitor within their company the distribution of Confidential Information received from
the other Party only to those who have a need to know and, further, to assist in preventing
the unauthorized disclosure of the Confidential Information to personnel within the company
who do not have a need to know, or to third parties. The Technical Coordinator for each Party
shall maintain pertinent records and the like, and acknowledge the receipt from the other
Party of all Confidential Information.

ARTICLE 11. TERM AND TERMINATION

	11.1	 	This Agreement shall become effective on the Direct R&D Effective Date and continue in full
force and effect until later of the termination of the FVC-Japan Master Agreement, the FP
Master Agreement or the Master Agreement, unless earlier terminated as hereinafter provided.
The term of this Agreement may be extended by mutual agreement of both parties.
	 
	11.2	 	If either Party fails to perform or breaches any of its material obligations under this
Agreement, then, upon sixty (60) days advanced written notice specifying such failure or
breach, the non-defaulting Party shall have the right to terminate this Agreement forthwith,
unless the failure or breach specified in the notice has been cured during the sixty (60) day
period. Termination of this Agreement pursuant to this Section 11.2 shall not relieve the
breaching Party from any liability arising from any breach of this Agreement and such
termination shall be without prejudice to any other rights and remedies of the non-breaching
Party provided at law or in equity, in addition to the rights and remedies set forth in this
Agreement.

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	11.3	 	Either Party shall have the right to terminate this Agreement by giving written notice to the
other Party upon the occurrence of any of the following events:

	 	(a)	 	the filing by the other Party of a voluntary petition in bankruptcy or
insolvency;
	 
	 	(b)	 	any adjudication that such other Party is bankrupt or insolvent;
	 
	 	(c)	 	the filing by such other Party of any legal action or document seeking
reorganization, readjustment or arrangement of its business under any law relating to
bankruptcy or insolvency;
	 
	 	(d)	 	the appointment of a receiver for all or substantially all of the property of
such other Party; or
	 
	 	(e)	 	the making by such other Party of any assignment of whole or substantial assets
for the benefit of creditors.

	 	 	This Agreement shall terminate on the thirtieth (30th) day after such notice of termination
is given.
	 
	11.4	 	In the event of termination or expiration of this Agreement, the rights and licenses granted
to each Party specified in Article 7 shall survive such termination or expiration, except that
if this Agreement is terminated by either Party for any of the events specified in Sections
11.2 and 11.3, then the licenses granted to the defaulting Party or the non-terminating Party,
as the case may be, shall thereupon terminate. The provisions of Articles 6, 8, 9, 10, 11 and
12 shall survive any termination or expiration of this Agreement.

ARTICLE 12. GENERAL PROVISIONS

	12.1	 	Neither Party is required to disclose any information of which disclosure is prohibited by
laws of the country of such Party.
	 
	12.2	 	In the event that the Parties will, after the Effective Date, make an announcement regarding
this transaction and their business relationship, such announcement shall be in a mutually
agreeable form and at a mutually agreeable time; provided that any information to be disclosed
and/or announced by either Party shall be identified through consultation with the other Party
and be agreed upon between the Parties before the disclosure and announcement.
	 
	12.3	 	Neither Party shall export or re-export, directly or indirectly, any technical information
disclosed hereunder or direct product thereof to any destination prohibited or restricted by
the export control regulations of Japan or the United States, including the U.S. Export
Administration Regulations, without the prior authorization from the appropriate governmental
authorities. Neither Party will use technical information supplied by the other Party
hereunder for any purpose to develop or

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	 	 	manufacture nuclear, chemical, biological weapons or missiles (hereafter “weapons of mass
destruction”). Each Party agrees that it will not knowingly sell any products manufactured
using the other Party’s technical information to any third party if it knows that the
end-user of the products will use them for the development and/or manufacture of the weapons
of mass destruction.
	 
	12.4	 	The rules of construction and documentary conventions set forth in Appendix A to this
Agreement shall apply to, and are hereby incorporated in, this Agreement.

[signatures next page]

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Execution Version

     IN WITNESS WHEREOF, each of the Parties hereto have caused this Agreement to be executed in
duplicate, as of the date first written above, by their respective duly authorized officers or
representatives.

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	TOSHIBA CORPORATION
	 	 	 	 	 	SANDISK CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	Masashi Muromachi
	 	 	 	Name:
	 	Eli Harari	 	 
	Title:

	 	President and CEO
	 	 	 	Title:
	 	Chief Executive Officer	 	 
	 

	 	Semiconductor Company	 	 	 	 	 	 	 	 
	 

	 	Corporate Executive Vice President	 	 	 	 	 	 	 	 

[Signature Page to Second Amended and Restated Product Development Agreement]

 

EXHIBIT 10.4

FOIA Confidential Treatment Requested

Execution Version

Exhibit A

Jointly Developed Products and Jointly Developed Flash Memory Controllers

	 	 	 	 	 
	1.

	 	256 M
	 	NAND Flash Memory
	 
	 	 	 	 
	2.

	 	512 M
	 	NAND Flash Memory
	 
	 	 	 	 
	3.

	 	1 G
	 	NAND Flash Memory
	 
	 	 	 	 
	4.

	 	2 G
	 	NAND Flash Memory
	 
	 	 	 	 
	5.

	 	4 G
	 	NAND Flash Memory
	 
	 	 	 	 
	6.

	 	[*]	 	 
	 
	 	 	 	 
	7.

	 	[*]	 	 
	 
	 	 	 	 
	8.

	 	[*]	 	 
	 
	 	 	 	 
	9.

	 	[*]	 	 
	 
	 	 	 	 
	10.

	 	[*]	 	 
	 
	 	 	 	 
	11.

	 	[*]	 	 
	 
	 	 	 	 
	12.

	 	[*]	 	 

Note 1: The Coordinating Committee will determine (i) the best process technology to utilize for
all products to be jointly developed pursuant to this Agreement (e.g. 0.16 micron, 0.13 micron, 90
nanometer and smaller sizes), (ii) whether such products shall use [*] or [*] and (iii) detail
product specifications, such as, but not limited to, voltage operating range [*].

Note 2: The Coordinating Committee shall be responsible for determining development
responsibilities of each Party with respect to jointly developed products.

 

			
	*	 	Indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

EXHIBIT 10.4

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Execution Version

Note 3: All Products and Flash Memory Controllers jointly developed hereunder shall include the
development of wafer test products. A “wafer test product” is a test system used to test
semiconductor wafers.

 

Execution Version

Exhibit B

SHARING OF WAFER PROCESSING COSTS –

(For Jointly Developed Products and Jointly Developed Controllers)

Jointly Developed Products

[*]

Jointly Developed Controllers

(1) Wafer processing cost associated with Jointly Developed Controllers will be shared by
the parties as determined by the Coordinating Committee in accordance with Section 3.2.

 

			
	*	 	Indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

Execution Version

Exhibit C

[*]

 

			
	*	 	Indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

Exhibit D

[*]

 

			
	*	 	Indicates that certain information contained
herein has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to the
omitted portions.

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