Document:

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                                                                   Exhibit 10.48
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                                   APPENDIX 1
                           To Participation Agreement
                   FlashVision/SanDisk Tranche Lease Financing

                         DEFINITIONS AND INTERPRETATION
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      A. Interpretation. In each Operative Document, unless a clear contrary
intention appears:

            (i) the singular number includes the plural number and vice versa;

            (ii) reference to any Person includes such Person's successors and
      assigns but, if applicable, only if such successors and assigns are
      permitted by the Operative Documents, and reference to a Person in a
      particular capacity excludes such Person in any other capacity or
      individually;

            (iii) reference to any gender includes the other gender;

            (iv) reference to any agreement (including any Operative Document),
      document or instrument means such agreement, document or instrument as
      amended, restated, supplemented or otherwise modified and in effect from
      time to time in accordance with the terms thereof and, if applicable, the
      terms of the other Operative Documents;

            (v) reference to any Applicable Laws means such Applicable Laws as
      amended, modified, codified, replaced or reenacted, in whole or in part,
      and in effect from time to time, including rules and regulations
      promulgated thereunder and reference to any section or other provision of
      any Applicable Laws means that provision of such Applicable Laws from time
      to time in effect and constituting the substantive amendment,
      modifications, codification, replacement or reenactment of such section or
      other provision;

            (vi) reference in any Operative Document to any Article, Section,
      Appendix, Schedule or Exhibit means such Article or Section thereof or
      Appendix, Schedule or Exhibit thereto;

            (vii) "hereunder", "hereof", "hereto" and words of similar import
      shall be deemed references to an Operative Document as a whole and not to
      any particular Article, Section or other provision thereof;

      CERTAIN INFORMATION IN THIS EXHIBIT 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.

                                  Appendix 1-1
<PAGE>

            (viii) "including" (and with correlative meaning "include") means
      including without limiting the generality of any description preceding
      such term; and

            (ix) relative to the determination of any period of time, "from"
      means "from and including" and "to" means "to but excluding".

      B. Accounting Terms. In each Operative Document, unless expressly
otherwise provided, accounting terms shall be construed and interpreted, and
accounting determinations and computations shall be made, in accordance with
GAAP.

      C. Conflict in Operative Documents. If there is any conflict between any
Operative Documents, such Operative Document shall be interpreted and construed,
if possible, so as to avoid or minimize such conflict, but, to the extent (and
only to the extent) of such conflict, the Participation Agreement shall prevail
and control.

      D. Legal Representation of the Parties. The Operative Documents were
negotiated by the parties with the benefit of legal representation and any rule
of construction or interpretation that any ambiguity in the Operative Documents
is to be construed or interpreted against the drafting party shall not apply to
any construction or interpretation hereof or thereof.

      E. Defined Terms. Unless a clear contrary intention appears, terms defined
herein have the respective indicated meanings when used in each Operative
Document.

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

      "Accepted" means, with respect to any Item of Equipment, that Lessee has
inspected and tested such Item of Equipment after the date such Item of
Equipment was delivered and Installed at the Facility and that Lessee has
accepted such Item of Equipment from the manufacturer or vendor thereof.

      "Acquisition Agreement" shall mean, with respect to any Equipment, the
purchase agreement or purchase order with the manufacturer or vendor of such
Equipment pursuant to which Lessee has agreed to purchase such Equipment.

      "Additional Costs" means amounts payable to any Participant pursuant to
Article XIII or Article XV of the Participation Agreement.

      "Advance" means an advance by Lessor to Lessee pursuant to Article III of
the Participation Agreement.

      "Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person or (ii) directly or indirectly owning or holding
five percent (5%) or more of the equity interest in such Person. For purposes of
this definition, "control", when used with respect to any Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether

                                  Appendix 1-2
<PAGE>

through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.

      "Affiliate Sublease" is defined in Section 5.2 of the Lease.

      "After Tax Basis" means, with respect to any payment to be received, the
amount of such payment increased so that, after deduction of the amount of all
Taxes (including any Taxes otherwise excluded by the definition of
"Impositions", and assuming for this purpose that the recipient of such payment
is subject to taxation at the highest marginal Federal rate generally applicable
to Persons of the same type as the recipient and the highest marginal state and
local rates generally applicable to Persons of the same type as the recipient in
the jurisdiction in which such recipient has its principal place of business)
required to be paid by the recipient (less any tax savings realized as a result
of the payment of the indemnified amount) with respect to the receipt by the
recipient of such amounts, such increased payment (as so reduced) is equal to
the payment otherwise required to be made.

      "Agent" means ABN AMRO or any successor pursuant to the terms of the
Operative Documents when acting in its capacity as agent for the Participants.

      "Aggregate Commitment Amount" means Two Hundred and Fifteen Million
Dollars ($215,000,000).

      "Aggregate Purchase Price" means, at any time, (a) with respect to any
Lease Supplement, the sum of the Purchase Prices for all related Lease
Supplement Equipment, and (b) with respect to all Equipment, the sum of the
Purchase Prices for all Equipment subject to the Lease at such time.

      "Allocation Fraction" means, with respect to any Item of Equipment, a
fraction, the numerator of which is the Purchase Price of such Item of Equipment
and the denominator of which is the Aggregate Purchase Price of all Equipment
then subject to the applicable Lease Supplement, including such Item of
Equipment.

      "Annual Appraisal" means an update (which update shall be a desktop
appraisal) of the Initial Appraisal from an Appraiser received pursuant to the
terms of the Lease on each annual anniversary of the Document Closing Date,
setting forth as of such annual anniversary the Fair Market Value of each Item
of Equipment then subject to the Lease, in form and substance reasonably
satisfactory to Agent and the Required Participants and using appraisal methods
consistent with the methods used in the Initial Appraisal. Each such appraisal
shall be prepared at the sole cost and expense of Lessee.

      "Applicable Laws" at any time means all then existing applicable laws,
rules, regulations (including Environmental Laws), statutes, treaties, codes,
ordinances, Permits, certificates, orders and licenses of and interpretations by
any Governmental Authority, and applicable judgments, decrees, injunctions,
writs, orders or like action of any court, arbitrator or other administrative,
judicial or quasi-judicial tribunal or agency of competent jurisdiction
(including those pertaining to health, safety or the environment and those
pertaining to the construction, installation or use of the Equipment.

                                  Appendix 1-3
<PAGE>

      "Applicable Lending Office" means, for each Participant, the office of
such Participant set forth as the Applicable Lending Office for such Participant
on Schedule II to the Participation Agreement, or such other office of such
Participant (or of an Affiliate of such Participant) as such Participant may
from time to time specify to Agent and Lessee by written notice as the office
from which its Participation Interests are made available and maintained.

      "Applicable Margin" means with respect to the Participation Interests
purchased by the Participants while interest or yield is accruing thereon by
reference to the LIBO Rate, the respective margin percentage that shall be
subject to adjustment (upwards or downwards, as appropriate) based on the
existence of the applicable Level I, II, III, IV or V as at the end of any
fiscal quarter as set forth below. The Leverage Ratio of the Guarantor shall be
determined from the then most recent quarterly or annual financial statements
and the Compliance Certificate in respect thereof delivered by the Guarantor
pursuant to the Guarantee. The adjustment, if any, to the Applicable Margin
shall be effective commencing on the third Business Day after the delivery of
such financial statements and Compliance Certificate. If the Guarantor shall at
any time fail to timely furnish to the Participants the financial statements and
Compliance Certificate required to be delivered pursuant to the Guarantee, then,
during the period commencing on the date such financial statements and
Compliance Certificate were required to be delivered pursuant to the Guarantee
until the date on which such financial statements and Compliance Certificate are
delivered by the Guarantor (but only during such period), Level V shall be
deemed to exist and no retroactive adjustments shall be made for such period.
Notwithstanding the foregoing, during the period from the Document Closing Date
through the date which is three Business Days after the date on which the
Guarantor delivers the first quarterly or annual financial statements and
Compliance Certificate pursuant to the Guarantee for the period ended June 30,
2001, Level IV shall be deemed to exist.

  ---------------------------------------------------------------------------
                           Applicable Margin Table
  ---------------------------------------------------------------------------
                             Applicable Margin for    Applicable Margin for
                            Tranche A and Tranche B         Tranche C
           Level                    Advances                 Advances
  ---------------------------------------------------------------------------
          Level V                     [*]                     [*]
  ---------------------------------------------------------------------------
          Level IV                    [*]                     [*]
  ---------------------------------------------------------------------------
          Level III                   [*]                     [*]
  ---------------------------------------------------------------------------
          Level II                    [*]                     [*]
  ---------------------------------------------------------------------------
          Level I                     [*]                     [*]
  ---------------------------------------------------------------------------

      "Appraisal" means any of the Initial Appraisal, any Annual Appraisal, any
Supplemental Appraisal or any Lease Term Appraisal.

      "Appraiser" means American Appraisal Associates or such other independent
qualified Person as may be selected by Agent and reasonably satisfactory to
Lessee.

      "Arrangement Fee" means the arrangement fee described in the Fee Letter.

[*] INDICATES THAT CERTAIN INFORMATION IN THIS EXHIBIT 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.

                                  Appendix 1-4
<PAGE>

      "Arranger" means ABN AMRO in its capacity as arranger of the lease
facility provided under the Operative Documents.

      "Assignment Agreement" means an Assignment Agreement substantially in the
form of Exhibit F to the Participation Agreement.

      "Available Commitment" means as to any Participant at any time an amount
equal to the excess, if any, of (A) the amount of such Participant's Commitment,
over (B) the aggregate amount of its Participation Interest in all Advances then
outstanding.

      "Bank" means ABN AMRO in its individual capacity.

      "Bankruptcy Code" means Title 11 of United States Code entitled
"Bankruptcy," as now or hereafter in effect.

      "Base Term" means, with respect to any Lease Supplement, the period
beginning on the applicable Lease Supplement Closing Date and ending on the
first anniversary of such Lease Supplement Closing Date.

      "Basic Rent" means, with respect to any Lease Supplement, all installments
of Fixed Rent and Variable Rent in respect of the relevant Lease Supplement
Balance due and payable by Lessee on each Payment Date during the Base Term or
Renewal Term, if any, applicable thereto.

      "Bill of Sale" means a bill of sale substantially in the form of Exhibit C
to the Participation Agreement to be delivered to Lessor pursuant to the
Participation Agreement.

      "Break Costs" means an amount equal to the amount, if any, required to
compensate any Participant for any losses (including, without limitation, any
loss, cost or expense incurred by reason of the liquidation or reemployment of
deposits or funds acquired by any Participant to fund its obligations under the
Operative Documents) it may reasonably incur as a result of (x) Lessee's payment
of any Basic Rent other than on a Payment Date therefor, (y) any Advance not
being made on the date specified therefor in the applicable Lease Supplement
Closing Date Notice (other than as a result of a breach by such Participant of
its obligation under Section 3.1 of the Participation Agreement to fund its
Participation Interest in such Advance) as set forth in Section 3.4 of the
Participation Agreement, or (z) any conversion of the LIBO Rate other than
pursuant to and in accordance with the Operative Documents. A statement as to
the amount of such loss, cost or expense, prepared in good faith and in
reasonable detail and submitted by any Participant to Agent and by Agent to
Lessee, shall be presumed correct absent demonstrable error.

      "Business Day" means (i) each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banks in New York, New York, Chicago,
Illinois, Manassas, Virginia or Sunnyvale, California are generally authorized
or obligated, by law or executive order, to close and (ii) relative to any
determination of the LIBO Rate, any day which is a Business Day under clause (i)
and is also a day on which dealings in Dollars are carried on in the London
interbank eurodollar market.

                                  Appendix 1-5
<PAGE>

      "Capital Asset" shall mean with respect to any Person, any tangible fixed
or capital asset owned or leased (in the case of a Capitalized Lease) by such
Person, or any expense incurred by such Person that is required by GAAP to be
reported as a non-current asset on such Person's balance sheet.

      "Capital Expenditures" means with respect to any Person and its
Subsidiaries on a consolidated basis, all expenses accrued for the acquisition
of Capital Assets which, in accordance with GAAP, would be classified as capital
expenditures (including all Capitalized Lease Obligations).

      "Capitalized Lease" means with respect to any Person and its Subsidiaries
on a consolidated basis, any lease of property, real, personal or mixed, the
obligations under which are capitalized on the consolidated balance sheet of
such Person and its Subsidiaries in accordance with GAAP.

      "Capitalized Lease Obligations" means with respect to any Person and its
Subsidiaries on a consolidated basis, the capitalized amount of monetary
obligations of such Person and its Subsidiaries to pay rent or other amounts
under or in respect of Capitalized Leases.

      "Cash Equivalents" means, as at any date of determination:

      (a)   Direct obligations of, or obligations the principal and interest on
            which are unconditionally guaranteed by, the United States of
            America or obligations of any agency of the United States of America
            to the extent such obligations are backed by the full faith and
            credit of the United States of America, in each case maturing within
            one year from the date of acquisition thereof;

      (b)   Certificates of deposit maturing within one year from the date of
            acquisition thereof issued by a commercial bank or trust company
            organized under the laws of the United States of America or a state
            thereof or that is a Participant, provided that (A) such deposits
            are denominated in Dollars, (B) such bank or trust company has
            capital, surplus and undivided profits of not less than
            $1,000,000,000 and (C) such bank or trust company has certificates
            of deposit or other debt obligations that were rated, as of the date
            such Cash Equivalents were acquired, at least A-1 (or its
            equivalent) by S&P or P-1 (or its equivalent) by Moody's;

      (c)   Open market commercial paper maturing within 270 days from the date
            of acquisition thereof issued by a corporation organized under the
            laws of the United States of America or a state thereof, provided
            such commercial paper was rated, as of the date such Cash
            Equivalents were acquired, at least A-1 (or its equivalent) by S&P
            or P-1 (or its equivalent) by Moody's; and

      (d)   Any repurchase agreement entered into with a commercial bank or
            trust company organized under the laws of the United States of
            America or a state thereof or that is a Participant, provided that
            (A) such bank or trust company has capital, surplus and undivided
            profits of not less than $1,000,000,000, (B) such bank or trust
            company has certificates of deposit or other debt obligations that
            were rated, as of the date such Cash Equivalents were acquired, at
            least A-1 (or its equivalent) by

                                  Appendix 1-6
<PAGE>

            S&P or P-1 (or its equivalent) by Moody's, (C) the repurchase
            obligations of such bank or trust company under such repurchase
            agreement are fully secured by a perfected security interest in a
            security or instrument of the type described in clause (a), (b) or
            (c) above and (D) such security or instrument so securing the
            repurchase obligations has fair market value at the time such
            repurchase agreement is entered into of not less than 100% of such
            repurchase obligations.

      "Casualty" is defined in Section 6.1 of the Lease.

      "Casualty Amount" means, with respect to any Item of Equipment as of any
date specified for payment thereof, an amount equal to the greater of (a) the
Purchase Price for such Item of Equipment and (b) the product obtained by
multiplying (i) the outstanding Lease Supplement Balance for the Lease
Supplement to which such Equipment is subject plus all Variable Rent accrued and
unpaid on such Lease Supplement Balance by (ii) the Allocation Fraction of such
Item of Equipment.

      "Casualty Notice" is defined in Section 6.1 of the Lease.

      "Casualty Recoveries" is defined in Section 6.1 of the Lease.

      "Casualty Settlement Date" is defined in Section 6.1(a) of the Lease.

      "CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C. ss.ss.9601 et seq., as amended.

      "Change in Control" shall mean a change in control of Guarantor of a
nature that would be required to be reported (assuming such event has not been
"previously reported") in response to Item 1(a) of the Current Report on Form
8-K, pursuant to Section 13 or 15(d) of the Exchange Act; provided that, without
limitation, a Change in Control shall be deemed to have occurred at such time as
(i) any "person" including a "group" (within the meaning of Sections 13(d) and
14(d) of the Exchange Act) (x) is or has become the "beneficial owner", as
defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of [*] or
more of the combined voting power of the outstanding securities of Guarantor
ordinarily having the right to vote at the election of directors, (y) acquires
all or substantially all of the assets of Guarantor, or (ii) individuals who
constituted the Board of Directors of Guarantor on the Document Closing Date
(the "Incumbent Board") have ceased for any reason to constitute at least a
majority thereof; provided further that any person becoming a director
subsequent to the Document Closing Date whose election, or nomination for
election by Guarantor's shareholders, was approved by a vote of at least
three-quarters (3/4) of the directors comprising the Incumbent Board (either by
a specific vote or by approval of the proxy statement of Guarantor in which such
person is named as a nominee for director without objection to such nomination)
shall be, for purposes of this definition, considered as though such person were
a member of the Incumbent Board.

      "Claims" means any and all obligations, liabilities, losses, actions,
suits, judgments, penalties, fines, claims, demands, settlements, costs and
expenses (including, without limitation, reasonable legal fees and expenses) of
any nature whatsoever.

[*] INDICATES THAT CERTAIN INFORMATION IN THIS EXHIBIT 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.

                                  Appendix 1-7
<PAGE>

      "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute thereto.

      "Collateral" means each of the following:

            (i) the Equipment (including all Parts thereof, accessions thereto
      and replacements (including any Replacement Equipment) and substitutions
      therefor);

            (ii) the Sublease and any Affiliate Sublease;

            (iii) all Related Property to the extent assignable;

            (iv) all products, accessions, rents, issues, profits, returns,
      income and proceeds of and from any and all of the foregoing Collateral
      (including proceeds which constitute property of the types described in
      clauses (i), (ii) and (iii) above and, to the extent not otherwise
      included, all payments under insurance (whether or not Agent or Lessor is
      the loss payee thereof, or any indemnity, warranty or guaranty, payable by
      reason of loss or damage to or otherwise with respect to any of the
      foregoing Collateral).

      "Collateral Assignment" means (i) a Collateral Assignment of Sublease
(FlashVision/SanDisk Tranche) to be entered into on or prior to the initial
Lease Supplement Closing Date, executed by Lessee and acknowledged by DSC, and
(ii) if any Affiliate Sublease is entered into by Lessee, a Collateral
Assignment of Sublease (FlashVision/SanDisk Tranche) in the form of the
Collateral Assignment of Sublease (FlashVision/SanDisk Tranche) entered into on
or prior to the initial Lease Supplement Closing Date, executed by Lessee and
acknowledged by the applicable Affiliate Sublessee but with such changes as are
necessary to reflect the different parties and the different terms of the
sublease.

      "Commitment" means (i) as to any Participant, the obligation of such
Participant to purchase a Participation Interest in Advances to be made by
Lessor under the Participation Agreement, in an aggregate amount at any one time
outstanding not to exceed the amount set forth opposite such Participant's name
on Schedule I to the Participation Agreement, and (ii) as to Lessor, the
obligation of Lessor to make Advances from amounts received from the
Participants pursuant to the purchase of Participation Interests under the
Participation Agreement.

      "Commitment Fee Payment Date" means each quarterly Payment Date in respect
of Fixed Rent occurring during the Installation Period and the last day of the
Installation Period.

      "Commitment Fee Rate" means with respect to the Available Commitment of
each Participant, the per annum percentage that shall be subject to adjustment
(upwards or downwards, as appropriate) based on the existence of the applicable
Level I, II, III, IV or V as at the end of any fiscal quarter as set forth
below. The Leverage Ratio of the Guarantor shall be determined from the then
most recent quarterly or annual financial statements and the Compliance
Certificate in respect thereof delivered by the Guarantor pursuant to the
Guarantee. The adjustment, if any, to the Commitment Fee Rate shall be effective
commencing on the third Business Day after the delivery of such financial
statements and Compliance Certificate. If the Guarantor shall at any time fail
to timely furnish to the Participants the financial statements and

                                  Appendix 1-8
<PAGE>

Compliance Certificate required to be delivered pursuant to the Guarantee, then,
during the period commencing on the date such financial statements and
Compliance Certificate were required to be delivered pursuant to the Guarantee
until the date on which such financial statements and Compliance Certificate are
delivered by the Guarantor (but only during such period), Level V shall be
deemed to exist and no retroactive adjustments shall be made for such period.
Notwithstanding the foregoing, during the period from the Document Closing Date
through the date which is three Business Days after the date on which the
Guarantor delivers the first quarterly or annual financial statements and
Compliance Certificate pursuant to the Guarantee for the period ended June 30,
2001, Level IV shall be deemed to exist.

                                       [*]

      "Commitment Fees" is defined in Section 4.1 of the Participation
Agreement.

      "Commitment Percentage" means, as to any Participant, such Participant's
Tranche A Participation Interest Commitment Percentage, Tranche B Participation
Interest Commitment Percentage or Tranche C Equity Interest Commitment
Percentage, as the case may be (or, at any time after the Commitments of the
Participants shall have expired or terminated, the percentage which the
aggregate amount of such Participant's purchases of Participation Interests then
outstanding constitutes of the aggregate amount of the purchases of
Participation Interests then outstanding).

      "Compliance Certificate" means a certificate of a Responsible Officer of
Guarantor delivered pursuant to Section 10(a)(iv)(A) or 10(a)(iv)(B) of the
Guarantee.

      "Consolidated Total Debt" means with respect to Guarantor and its
Subsidiaries on a consolidated basis as of any date of determination, the
outstanding principal balance of all Indebtedness of such Persons, including all
Guaranty Obligations (including those of Guarantor in respect of the Obligations
of Lessee under the Operative Documents).

      "Debt Service Coverage Ratio" means, as of any date of determination, the
ratio of (a)Lessee EBITDAR for the Fiscal Quarter ending on such date to (b) the
sum of all Interest Expense of Lessee and its Subsidiaries plus all rental
expense of Lessee and its Subsidiaries on a consolidated basis for such period.

      "Debt to Equity Ratio" means, as of any date of determination, the ratio
of (a) Indebtedness of Lessee and its Subsidiaries on a consolidated basis as of
such date, to (b) Members' original capital in Lessee plus retained earnings
less distributions made to Members in respect of capital as of such date.

      "Default" means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would constitute an Event of
Default.

      "Defaulted Amount" is defined in Section 3.4(a) of the Participation
Agreement.

      "Defaulting Participant" is defined in Section 3.4(a) of the Participation
Agreement.

[*] INDICATES THAT CERTAIN INFORMATION IN THIS EXHIBIT 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.

                                  Appendix 1-9
<PAGE>

      "Document Closing Date" is defined in Section 2 of the Participation
Agreement.

      "Dollars" and "$" mean dollars in lawful currency of the United States of
America.

      "DSC" means Dominion Semiconductor Company, L.L.C., a Virginia limited
liability company and a wholly-owned Subsidiary of Toshiba.

      "DSC Foundry Agreement" means the Foundry Agreement to be entered into
between DSC and Lessee and referred to in Section 8.1(w) of the Participation
Agreement.

      "DSC Services Agreement" means the Services Agreement dated as of April 1,
2000 between Lessee and DSC.

      "Early Termination Option" is defined in Section 10.1 of the Lease.

      "Eligible Institution" means (i) a commercial bank organized under the
laws of the United States, or any State thereof; (ii) a commercial bank
organized under the laws of any other country that is a member of the OECD or
has concluded special lending arrangements with the International Monetary Fund
associated with its General Arrangements to Borrow, or a political subdivision
of any such country, provided that such bank is acting through a branch or
agency located in the United States; (iii) a finance company, insurance company
or other financial institution or fund (whether a corporation, partnership or
other entity) engaged generally in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business; (iv) the central bank
of any country that is a member of the OECD; (v) any Participant; or (vi) in the
case of an assignment or transfer by Bank Leumi USA of the Participation
Interests held by it, the ultimate parent of such Participant; provided,
however, that (A) any such Person described in clause (i), (ii), (iii), (iv) or
(vi) above or a parent entity of any such Person shall also have combined
capital and surplus (as established in its most recent report of condition to
its primary regulator) of not less than $250,000,000 (or its equivalent in
foreign currency), and (B) any Person described in clause (ii), (iii), (iv) or
(vi) above shall, on the date on which it is to become a Participant hereunder,
be entitled to receive payments hereunder without deduction or withholding of
any United States Federal income taxes.

      "Employee Benefit Plan" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which is or was maintained or contributed to by Lessee or
any of its ERISA Affiliates.

      "Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Governmental Authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law; (ii) in connection with any
Hazardous Substance or any actual or alleged Hazardous Activity; or (iii) in
connection with any actual or alleged damage, injury, threat or harm to health,
safety, natural resources or the environment.

      "Environmental Indemnity Agreement" means the Environmental Indemnity
Agreement dated as of May 9, 2000 between Guarantor, Toshiba and DSC.

                                 Appendix 1-10
<PAGE>

      "Environmental Law" at any time, means any applicable Federal, state,
county or local law, statute, ordinance, rule, regulation, license, permit,
authorization, approval, covenant, criteria having the effect of law, guideline
having the effect of law, administrative or court order, judgment, decree,
injunction, code or requirement or any agreement with a Governmental Authority
theretofore enacted or promulgated:

            (x) relating to pollution (or the cleanup, removal, remediation or
      encapsulation thereof, or any other response thereto), or the regulation
      or protection of human health, safety or the environment, including air,
      water, vapor, surface water, groundwater, drinking water, land (including
      surface or subsurface), plant, aquatic and animal life, or

            (y) concerning exposure to, or the use, manufacture, containment,
      storage, recycling, treatment, generation, discharge, emission, Release or
      threatened Release, transportation, processing, handling, labeling,
      containment, production, distribution, disposal or remediation of, any
      Hazardous Substance or Hazardous Activity,

in each case as amended and as then in effect, and any common law or equitable
doctrine (including, without limitation, injunctive relief and tort doctrines
such as negligence, nuisance, trespass and strict liability) that may impose
liability or obligations for injuries (whether personal or to property) or
damages due to or threatened as a result of the presence of, exposure to, or
ingestion of, any Hazardous Substance. At any time, Environmental Laws include,
but are not limited to, CERCLA; the Resource Conservation and Recovery Act of
1976, 42 U.S.C. ss.6901 et seq.; the Federal Water Pollution Control Act, 33
U.S.C. ss.1251 et seq.; the Clean Air Act, 42 U.S.C. ss.ss.7401 et seq.; the
National Environmental Policy Act, 42 U.S.C. ss.4321; the Refuse Act, 33 U.S.C.
ss.ss.401 et seq.; the Hazardous Materials Transportation Act of 197S, 49 U.S.C.
ss.ss.1801-1812; the Toxic Substances Control Act, 15 U.S.C. ss.ss.2601 et seq.;
the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. ss.ss.136 et
seq.; the Safe Drinking Water Act, 42 U.S.C. ss.ss. 300f et seq., each as
amended and as then in effect, and their state and local counterparts or
equivalents, including any regulations promulgated thereunder.

      "Equipment" means collectively all Items of Equipment.

      "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.

      "ERISA Affiliate" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Code of which that Person is a member; (ii) any trade or
business (whether or not incorporated) which is a member of a group of trades or
businesses under common control within the meaning of Section 414(c) of the Code
of which that Person is a member; and (iii) any member of an affiliated service
group within the meaning of Section 414(m) or (o) of the Code of which that
Person, any corporation described in clause (i) above or any trade or business
described in clause (ii) above is a member. Any former ERISA Affiliate of Lessee
shall continue to be considered an ERISA Affiliate of Lessee within the meaning
of this definition with respect to the

                                 Appendix 1-11
<PAGE>

period such entity was an ERISA Affiliate of Lessee and with respect to
liabilities arising after such period for which Lessee could be liable under the
Code or ERISA.

      "ERISA Event" means (i) the assertion of a claim (other than routine
claims for benefits) against any Employee Benefit Plan or the assets thereof, or
against Lessee or any of its ERISA Affiliates in connection with any Employee
Benefit Plan which is reasonably likely to have a Material Adverse Effect; or
(ii) receipt from the Internal Revenue Service of notice of the failure of any
Pension Plan (or any other Employee Benefit Plan intended to be qualified under
Section 401(a) of the Code) to qualify under Section 401(a) of the Code, or the
failure of any trust forming part of any Pension Plan to qualify for exemption
from taxation under Section 501(a) of the Code.

      "Escrow Account" is defined in Section 3.1(c) of the Participation
Agreement.

      "Event of Default" is defined in Section 8.1 of the Lease.

      "Excepted Payments" means

            (a)   all indemnity payments (including indemnity payments made
                  pursuant to Section 12 of the Participation Agreement) to
                  which Lessor, or any of its Affiliates, agents, officers,
                  directors or employees is entitled;

            (b)   any amounts (other than Basic Rent, any Renewal Payment or
                  amounts payable by Lessee pursuant to Section 6.1 or Articles
                  VIII or X of the Lease) payable under any Operative Document
                  to reimburse Lessor or any of its respective Affiliates
                  (including the reasonable expenses of Lessor incurred in
                  connection with any such payment) for performing or complying
                  with any of the obligations of Lessee under and as permitted
                  by any Operative Document, except to the extent that one or
                  more Participants have indemnified Lessor with respect thereto
                  pursuant to the Participation Agreement;

            (c)   any amount payable to Lessor by any Participant or transferee
                  permitted under the Operative Documents of the interest of
                  Lessor as the purchase price of such purchasing Participant's
                  Participation Interest;

            (d)   any insurance proceeds (or payments with respect to risks
                  self-insured or policy deductibles) to which Lessor is
                  entitled under liability policies other than such proceeds or
                  payments payable to Agent;

            (e)   any insurance proceeds under policies maintained by Lessor,
                  excluding insurance proceeds under policies required to be
                  maintained by Lessee under the Lease;

            (f)   Transaction Expenses or other amounts or expenses paid or
                  payable to or for the benefit of Lessor; and

            (g)   any payments in respect of interest to the extent attributable
                  to payments referred to in clauses (a) through (f) above.

                                 Appendix 1-12
<PAGE>

      "Expiration Date" means with respect to any Lease Supplement the last day
of the Base Term applicable thereto or, if a Renewal Term has been granted with
respect thereto, the last day of the then current Renewal Term applicable
thereto.

      "Facility" means the "Module II" facility of DSC located at Manassas,
Virginia.

      "Fair Market Value" means, with respect to any Item of Equipment as of any
date, the price at which a purchaser would purchase such Item of Equipment in an
arm's-length transaction between a willing buyer and a willing seller none of
which is affiliated with Lessee, Guarantor, Agent or any Participant, and
neither of them being under any compulsion to buy or sell. In making any
determination of Fair Market Value, the Appraiser may assume such Item of
Equipment has been maintained in accordance with the requirements of the Lease
and that such Item of Equipment is in the condition in which it is required to
be under the Lease as of the date for which such determination is made (unless
such Fair Market Value is being determined for purposes of Section 12.2 of the
Participation Agreement or a Lease Term Appraisal, in which case the foregoing
assumptions shall not be made and the Appraiser shall determine the Fair Market
Value based on the actual condition of such Item of Equipment).

      "Federal Funds Effective Rate" means for any day the greater of (i)
average of the rates per annum as determined by ABN AMRO at which overnight
Federal funds are offered to ABN AMRO for such day by major banks in the
interbank market, and (ii) if ABN AMRO is borrowing overnight funds from a
Federal Reserve Bank on that day, the rate per annum at which such overnight
borrowings are made on that day. Each determination of the Federal Funds
Effective Rate by ABN AMRO shall be conclusive and binding on Lessee except in
the case of manifest errors.

      "Fee Letter" means the commitment and fee letter, dated December 5, 2000,
between Lessee and ABN AMRO.

      "Fees" is defined in Section 4.1 of the Participation Agreement.

      "Final Expiration Date" means the last Expiration Date to occur with
respect to all of the Lease Supplements.

      "Fiscal Quarter" means any reported quarter of a Fiscal Year.

      "Fiscal Year" means any period of twelve consecutive calendar months
ending on March 31; references to a Fiscal Year with a number corresponding to
any calendar year (e.g., the "2000 Fiscal Year") refer to the Fiscal Year ending
on March 31st of such calendar year.

      "Fixed Charges" means, for any period for which a determination is made
pursuant to the applicable terms of the Participation Agreement, the sum,
without duplication, determined in respect of Lessee and its Subsidiaries on a
consolidated basis, of (a) Interest Expense of Lessee and its Subsidiaries for
such period plus (b) current maturities of long term Funded Indebtedness of
Lessee and its Subsidiaries plus current maturities of long term Funded
Indebtedness of any other Person to the extent Lessee or any of its Subsidiaries
is liable in respect of any Guaranty Obligations of such Funded Indebtedness of
such other Person, plus (c) all rental expenses of Lessee and its Subsidiaries
for such period, plus (d) Capital Expenditures of Lessee and its

                                 Appendix 1-13
<PAGE>

Subsidiaries during such period, plus (e) Restricted Payments, as described in
clause (i) of the definition of such term, made by Lessee and its Subsidiaries
(other than to Lessee) during such period.

      "Fixed Charge Coverage Ratio" means for any period for which a
determination is made pursuant to the applicable terms of the Participation
Agreement, with respect to Lessee and its Subsidiaries on a consolidated basis,
the ratio of (a) Lessee EBITDAR for such period to (b) Fixed Charges for such
period.

      "Fixed Rent" shall mean, for each Lease Supplement and each Payment Date
therefor, that portion of the installment of Basic Rent payable on such Payment
Date representing amortization of the relevant Lease Supplement Balance, all as
set forth on Schedule A to the Lease, as amended from time to time pursuant to
Section 4.1(a) of the Lease.

      "FlashVision/Toshiba Tranche Operative Documents" means the Participation
Agreement (FlashVision/Toshiba Tranche) dated as of December 27, 2000 among
FlashVision, L.L.C., as lessee, ABN AMRO, as agent, lessor and a participant,
the Conduit Group Agents and the other "Participants" from time to time party
thereto, the Guarantee of even date therewith executed by Toshiba, as guarantor,
and the other "Operative Documents" as defined in Appendix 1 to such
Participation Agreement.

      "F.R.S. Board" means the Board of Governors of the Federal Reserve System
or any successor thereto.

      "Funded Indebtedness" of any Person means, without duplication:

            (a)   All obligations of such Person evidenced by notes, bonds,
                  debentures or other similar instruments and all other
                  obligations of such Person for borrowed money (including
                  obligations to repurchase receivables and other assets sold
                  with recourse);

            (b)   All non-contingent obligations of such Person for the deferred
                  purchase price of property or services (including obligations
                  under letters of credit and other credit facilities which
                  secure or finance such purchase price), other than trade
                  payables incurred by such Person in the ordinary course of its
                  business on ordinary terms and overdue;

            (c)   All obligations of such Person under conditional sale or other
                  title retention agreements with respect to property acquired
                  by such Person (to the extent of the value of such property if
                  the rights and remedies of the seller or lender under such
                  agreement in the event of default are limited solely to
                  repossession or sale of such property), including the interest
                  and yield components of rent under Synthetic Leases and,
                  without duplication, the principal balance of Synthetic
                  Leases;

            (d)   All obligations of such Person as lessee under or with respect
                  to Capitalized Lease Obligations; and

            (e)   any Guaranty Obligations of such Person in respect of
                  obligations described in clauses (a) through (d) above of
                  another Person.

                                 Appendix 1-14
<PAGE>

      "Fund," "Funded" or "Funding" means each funding by a Participant of its
Participation Interest in any Advance as described in Article III of the
Participation Agreement.

      "GAAP" means United States generally accepted accounting principles
(including principles of consolidation), in effect from time to time.

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

      "Governmental Action" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgments, written
interpretations, decrees, licenses, exemptions, publications, filings, notices
to and declarations of or with, or required by, any Governmental Authority, or
required by any Applicable Laws, and shall include, without limitation, all
environmental and operating permits and licenses that are required by Applicable
Laws or any Governmental Authority for the use and operation of the Equipment as
contemplated by the Lease.

      "Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

      "Grossed-Up Basis" is defined in Section 12.4(d) of the Participation
Agreement.

      "Guarantee" means that certain Guarantee dated as of December 27, 2000
executed and delivered by the Guarantor in favor of the Agent, Lessor and the
Participants.

      "Guarantee Event of Default" is defined in Section 11.1 of the Guarantee.

      "Guarantor" means SanDisk Corporation, a Delaware corporation.

      "Guarantor EBITDAR" means, with respect to Guarantor and its Subsidiaries
on a consolidated basis for any period for which a determination is made
pursuant to the Operative Documents, the sum of the following:

            (a) The net income of Guarantor and its Subsidiaries for such
      period;

                                      plus

            (b) The sum (to the extent deducted in calculating net income in
      clause (a) above) of (i) all Interest Expenses (net of all interest income
      of Guarantor and its Subsidiaries during such period), (ii) all
      depreciation and amortization expenses, (iii) all rental expenses, and
      (iv) all tax expense based on or measured by income.

      "Guaranty Obligation" means, with respect to any Person, any direct or
indirect liability of that Person with respect to any indebtedness, lease,
dividend, letter of credit or other obligation, including a Synthetic Lease (the
"primary obligations") of another Person (the "primary obligor"), including any
obligation of that Person, whether or not contingent, (a) to purchase,
repurchase or otherwise acquire such primary obligation or any property
constituting

                                 Appendix 1-15
<PAGE>

direct or indirect security therefor, or (b) to advance or provide funds (i) for
the payment or discharge of any such primary obligation, or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet item, level of income or
financial condition of the primary obligor, or (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, or (d) otherwise to assure or hold harmless the holder
of any such primary obligation against loss in respect thereof. The amount of
any Guaranty Obligation shall be deemed equal to the stated or determinable
amount of the primary obligation in respect of which such Guaranty Obligation is
made or, if not stated or if indeterminable, the maximum reasonably anticipated
liability in respect thereof.

      "Hazardous Activity" means any activity, process, procedure or undertaking
that directly or indirectly (i) produces, generates or creates any Hazardous
Substance; (ii) causes or results in (or threatens to cause or result in) the
Release of any Hazardous Substance into the environment (including air, water
vapor, surface water, groundwater, drinking water, land (including surface or
subsurface), plant, aquatic and animal life); (iii) involves the containment or
storage of any Hazardous Substance; or (iv) would be regulated as hazardous
waste treatment, storage or disposal within the meaning of any Environmental
Law.

      "Hazardous Substance" or "Hazardous Material" means any substance, waste
or material which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous by listing
characteristic or definition under any Environmental Law, including petroleum,
crude oil or any fraction thereof, petroleum derivatives, by-products and other
hydrocarbons and is or becomes regulated by any Governmental Authority,
including any agency, department, commission, board or instrumentality of the
United States or any political subdivision of the foregoing and also including
asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBs")
and radon gas.

      "Highest Lawful Rate" is defined in Section 4.3(b) of the Participation
Agreement.

      "Holdback Amount" is defined in Section 3.1(c) of the Participation
Agreement.

      "Impositions" means, except to the extent described in the following
sentence, any and all liabilities, losses, expenses, costs, charges and Liens of
any kind whatsoever for fees, taxes, levies, imposts, duties, charges,
assessments or withholdings of any nature whatsoever ("Taxes") (including (i)
personal property or ad valorem taxes; (ii) sales taxes, use taxes and other
similar taxes (including rent taxes and intangibles taxes); (iii) any excise
taxes; (iv) transfer taxes, conveyance taxes, mortgage taxes, intangible taxes,
stamp taxes and documentary recording taxes and fees; (v) taxes that are or are
in the nature of franchise, income, value added, gross receipts, privilege and
doing business taxes, license and registration fees; and (vi) assessments on any
Equipment or any Part thereof); and in each case all interest, additions to tax
and penalties thereon, which at any time may be levied, assessed or imposed by
any Governmental Authority upon or with respect to (a) any Indemnitee, any
Equipment or any Part thereof or interest therein, or Lessee or any sublessee or
user of any Equipment; (b) the leasing, financing, refinancing, demolition,
construction, installation, substitution, subleasing, acquisition, acceptance,
inspection, assignment, control, condition, servicing, maintenance, repair,
ownership, possession,

                                 Appendix 1-16
<PAGE>

sale, purchase, rental, lease, activity conducted on, delivery, insuring, use,
operation, improvement, transfer, return or other disposition of any Equipment
or any Part thereof or interest therein; (c) the Participation Interests or
other indebtedness with respect to any Equipment or any Part thereof or interest
therein or transfer thereof; (d) the rentals, receipts or earnings arising from
any Equipment or any Part thereof or interest therein; (e) the Operative
Documents, the performance thereof or any payment made or accrued pursuant
thereto; (f) the income or other proceeds received with respect to any Equipment
or any Part thereof or interest therein upon the sale or disposition thereof;
(g) any contract relating to the manufacture, acquisition or delivery of any
Equipment or any Part thereof or interest therein; or (h) otherwise in
connection with the Overall Transaction or the enforcement thereof.

      Notwithstanding anything in the first paragraph of this definition (except
as provided in the final paragraph of this definition) the term "Imposition"
shall not mean or include:

            (i) Taxes and impositions (other than Taxes that are, or are in the
      nature of, sales, use, value added, rental, transfer, property or ad
      valorem taxes) that are imposed by any Governmental Authority and that are
      based upon or measured by net income (including any taxes based on capital
      gains and minimum taxes); provided that this clause (i) shall not limit or
      expand Lessee's obligations under Sections 12.4(e) or 13.3 of the
      Participation Agreement;

            (ii) any Tax or imposition to the extent, but only to such extent,
      that it relates to any act, event or omission that first occurs, or
      relates to a period, after the termination of the Lease, return of the
      Equipment as required under the Lease and payment in full of all amounts
      due under the Lease (but not any Tax or imposition that relates to any
      period prior to such termination, return and payment in full with respect
      to the Equipment to which such Tax or Imposition relates);

            (iii) any Tax or imposition for so long as, but only for so long as,
      it is being contested in accordance with the provisions of Section 12.4(b)
      of the Participation Agreement, provided that the foregoing shall not
      limit Lessee's obligation under Section 12.4(b) of the Participation
      Agreement to advance to such Indemnitee amounts with respect to Taxes or
      impositions that are being contested in accordance with Section 12.4(b) of
      the Participation Agreement or any expenses incurred by such Indemnitee in
      connection with such contest;

            (iv) any Taxes imposed against or payable by an Indemnitee resulting
      from, or that would not have been imposed but for, the actual (as opposed
      to imputed) gross negligence or actual (as opposed to imputed) willful
      misconduct of such Indemnitee;

            (v) any Taxes imposed upon an Indemnitee with respect to any
      voluntary transfer, sale, finance or other voluntary disposition of any
      interest in the Equipment or any part thereof or interest therein, or any
      interest or obligation under the Operative Documents or any Participation
      Interest, or from any sale, assignment, transfer or other disposition of
      any interest in an Indemnitee (other than any transfer in connection with
      (1) the exercise by the Lessee of an termination option or Purchase Option
      with respect to

                                 Appendix 1-17
<PAGE>

      the Equipment, (2) the exercise by Lessee of the Sale Option, (3) an Event
      of Default or (4) a Casualty or Condemnation affecting the Equipment);

            (vi) Taxes imposed on or payable by an Indemnitee to the extent such
      Taxes would not have been imposed but for a breach by the Indemnitee or an
      Affiliate thereof of any representations, warranties or covenants in the
      Operative Documents (unless such breach is caused by Lessee's breach of
      any of its representations, warranties or covenants in the Operative
      Documents);

            (vii) Taxes to the extent resulting from an Indemnitee's failure to
      comply with the provisions of Section 12.4(b) of the Participation
      Agreement, which failure materially adversely affects the ability of
      Lessee to contest such Taxes (unless such failure is caused by Lessee's
      breach of any of its representations, warranties, or covenants in the
      Operative Documents; or

            (viii) any Taxes imposed on an Indemnitee as a result of the failure
      of such Indemnitee to file any return or report timely and in the form
      prescribed by law or to pay any Tax (unless such failure is caused by
      Lessee's breach of any of its representations, warranties or covenants in
      the Operative Documents).

Notwithstanding the foregoing, the exclusions from the definition of Impositions
set forth in clauses (i), (ii) and (viii) above shall not apply (but the other
exclusions shall apply) to any Taxes or increase in Taxes (net of any
corresponding decrease in Taxes realized by an Indemnitee) imposed by a taxing
authority of a State in which the Equipment is located on an Indemnitee, to the
extent such increase or imposition would not have occurred if on each Lease
Supplement Closing Date the Participants had advanced funds to Lessee in the
form of a loan secured by the Equipment in an amount equal to the amounts funded
on such Lease Supplement Closing Date, with debt service for such loan equal to
the Basic Rent payable and a principal balance on the maturity of such loan in
an amount equal to the then outstanding amount of the Lease Supplement Balance
at the end of the Lease Term with respect to such Equipment.

      "Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price (or a portion thereof) of property or services, including obligations
under Synthetic Leases (other than trade payables incurred in the ordinary
course of business of such Person), (ii) all indebtedness of such Person
evidenced by a note, bond, debenture or similar instrument, (iii) the principal
component of all Capitalized Lease Obligations of such Person and all
obligations of such Person under any other lease to the extent that the then
present value of the minimum rental commitment thereunder should, in accordance
with GAAP, be capitalized on a balance sheet of such Person, (iv) the face
amount of all letters of credit issued for the account of such Person and,
without duplication, all unreimbursed amounts drawn thereunder, (v) all
indebtedness of any other Person secured by any Lien on any property owned by
such Person, whether or not such indebtedness has been assumed, (vi) payment
obligations under any interest rate protection agreements (including without
limitation, any interest rate swaps, caps, floors, collars and similar
agreements) and currency swaps and similar agreements, and (vii) any
indebtedness of any other Person of the character referred to in clauses (i)
through (vi) with respect to which such Person has become

                                 Appendix 1-18
<PAGE>

liable by way of any guarantee, similar contingent obligation or other
arrangement which has the effect of assuring payment.

      "Indemnitee" means each Participant, Agent (in its individual capacity and
as agent), Lessor (in its individual capacity and as lessor), any additional,
separate or co-agent appointed in accordance with the terms of the Participation
Agreement, and the respective Affiliates, successors, permitted assigns,
permitted transferees, contractors, employees, officers, directors,
shareholders, partners, Sub-Participants, representatives and agents of each of
the foregoing Persons; provided, however, that in no event shall Guarantor,
Lessee or any of their respective Affiliates be an Indemnitee.

      "Initial Appraisal" means the appraisal of all of the Equipment delivered
pursuant to Appendix 2 to the Participation Agreement on the Document Closing
Date, setting forth the Fair Market Value of each Item of Equipment which as of
the initial Lease Supplement Closing Date or any subsequent Lease Supplement
Closing Date is to become subject to the Lease, in form and substance, and using
appraisal methods, reasonably satisfactory to Agent and the Required
Participants. Such appraisal shall be prepared at the sole cost and expense of
Lessee.

      "Installation Expenses" means all fees, costs and expenses incurred or
payable by Lessee with respect to the Installation of any Equipment.

      "Installation Period" means the period commencing on the Document Closing
Date and ending on the earliest of (i) the eighteenth (18th) monthly anniversary
of the Document Closing Date, (ii) the termination of the Lease as to all Lease
Supplements pursuant to Section 10.1(a) of the Lease, (iii) the date Lessee
gives notice or is deemed to have given notice of its election of the Purchase
Option or Sale Option pursuant to Section 11.1(b) or 11.1(c) of the Lease, to
the extent such notice relates to all of the Equipment then subject to the
Lease, or (iv) upon the occurrence of an Event of Default as described in
Section 8.1(e) of the Lease or upon notice by Agent, at the direction of the
Required Participants, following the occurrence of any other Event of Default,
that the Commitments are terminated.

      "Installed" means, with respect to any Equipment, that such Equipment has
been installed at the Facility and is fully operational and fit for its intended
purposes, and "Installation" shall refer to the process of causing any such
Equipment to be so Installed.

      "Insurance Requirements" means all terms and conditions of any insurance
policy required by the Lease to be maintained by Lessee and all requirements of
the issuer of such policy with respect to such policy.

      "Interest Expense" means, with respect to any Person (and its
Subsidiaries) on a consolidated basis for any period, the sum determined on a
consolidated basis in accordance with GAAP, of (a) all interest accruing on the
Indebtedness of such Person during such period (including, without limitation,
interest attributable to Capitalized Lease Obligations) plus (b) all fees in
respect of outstanding letters of credit payable by such Person and accruing
during such period.

      "Interest Period" means (a) with respect to any interest or yield in
respect of any portion of the Participation Interests determined by reference to
the Prime Rate, all or any portion of the

                                 Appendix 1-19
<PAGE>

period from and including a Payment Date (or, in the case of the initial
Interest Period in respect thereof, from and including the date on which such
Participation Interests were Funded at such rate or were converted into a
Funding of such Type, in either case in accordance with the Operative Documents)
in respect of such portion of Variable Rent representing such interest or yield,
to but excluding the next succeeding Payment Date in respect of such portion of
Variable Rent during which such interest or yield is determined by reference to
such rate, or (b) with respect to any interest or yield on any portion of any
Participation Interests determined by reference to the LIBO Rate, the LIBO Rate
Period therefor then in effect as of the determination date.

      "Item of Equipment" means any item of equipment used or to be used in the
manufacture of NAND flash memory integrated circuits at the Facility and which
is or will be purchased by Lessor pursuant to the Operative Documents and
described on Schedule I to the relevant Lease Supplement but only if included in
the Initial Appraisal, together with any accessories, additions, improvements,
modifications, Parts and replacements from time to time incorporated or
installed in any such item of equipment which are or become property of Lessor
pursuant to the terms of the Lease.

      "Investment Company Act" means the Investment Company Act of 1940, as
amended, together with the rules and regulations promulgated thereunder.

      "Lease" means the Master Lease Intended as Security FlashVision/SanDisk
Tranche, dated as of December 27, 2000, between Lessor and Lessee, together with
all Lease Supplements.

      "Lease Balance" means, as of any determination date, the sum of the
outstanding amount of the Lease Supplement Balances.

      "Lease Extension" is defined in Section 14.18 of the Participation
Agreement.

      "Lease Supplement" means a Lease Supplement substantially in the form of
Exhibit A to the Lease, together with all attachments and schedules thereto, as
any such Lease Supplement may be amended from time to time pursuant to the
Operative Documents.

      "Lease Supplement Balance" means, with respect to any Lease Supplement as
any date of determination, the sum of (i) the amount set forth in Section 7 of
such Lease Supplement, less (ii) the amount of all Fixed Rent, Renewal Payments
and Casualty Amounts paid by Lessee pursuant to such Lease Supplement and the
Lease.

      "Lease Supplement Closing Date" means any Business Day on which an Advance
is made under the Participation Agreement in accordance with Section 3.3
thereof, Lessor purchases any Equipment, a Lease Supplement in respect of such
Equipment is executed and delivered in accordance with the Operative Documents
and the conditions precedent set forth in Article VI of the Participation
Agreement have been satisfied or waived in respect of such Lease Supplement.

      "Lease Supplement Closing Date Notice" is defined in Section 3.3 of the
Participation Agreement.

                                 Appendix 1-20
<PAGE>

      "Lease Supplement Equipment" means, with respect to any Lease Supplement,
all Equipment listed on Attachment A to such Lease Supplement.

      "Lease Term" with respect to any Lease Supplement is defined in Section
3.1 of the Lease.

      "Lease Term Appraisal" means any appraisal required to be delivered
pursuant to Section 11.4 of the Lease.

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

      "Lessee Articles" means the Articles of Organization of Lessee as filed
with the State Corporation Commission of the Commonwealth of Virginia on May 16,
2000.

      "Lessee EBITDAR" means, with respect to Lessee and its Subsidiaries on a
consolidated basis for any period for which a determination is made pursuant to
the Operative Documents, the sum of the following:

            (a) The net income of Lessee and its Subsidiaries for such period;

                                      plus

            (b) The sum (to the extent deducted in calculating net income in
      clause (a) above) of (i) all Interest Expenses (net of all interest income
      of Lessee and its Subsidiaries during such period), (ii) all depreciation
      and amortization expenses, (iii) all rental expenses, and (iv) all tax
      expense based on or measured by income.

      "Lessor" means ABN AMRO in its capacity as lessor under the Operative
Documents.

      "Lessor Lien" means Liens on or against any Equipment (a) which result
from any act of, or any Claim against, Lessor or any Participant in any case
unrelated to the Overall Transaction or (b) which result from any Tax owed by
any such Person, except any Tax for which Lessee is obligated to indemnify.

      "Level I" means at any time that the Guarantor's Leverage Ratio at the end
of the applicable Fiscal Quarter for the trailing four Fiscal Quarters then
ended is less than 1.50 to 1.0.

      "Level II" means at any time that the Guarantor's Leverage Ratio at the
end of the applicable Fiscal Quarter for the trailing four Fiscal Quarters then
ended is greater than or equal to 1.50 to 1.0 but is less than 2.00 to 1.0.

      "Level III" means at any time that the Guarantor's Leverage Ratio at the
end of the applicable Fiscal Quarter for the trailing four Fiscal Quarters then
ended is greater than or equal to 2.00 to 1.0 but is less than 2.50 to 1.0.

      "Level IV" means at any time that the Guarantor's Leverage Ratio at the
end of the applicable Fiscal Quarter for the trailing four Fiscal Quarters then
ended is greater than or equal to 2.50 to 1.0 but is less than 2.75 to 1.0.

                                 Appendix 1-21
<PAGE>

      "Level V" means at any time that the Guarantor's Leverage Ratio at the end
of the applicable Fiscal Quarter for the trailing four Fiscal Quarters then
ended is equal to or greater than 2.75 to 1.0.

      "Leverage Ratio" means as of any date of determination, for Guarantor and
its Subsidiaries on a consolidated basis, the ratio of (i) Consolidated Total
Debt as of such date to (ii) Guarantor EBITDAR for the four-Fiscal Quarter
period then ended, in each case as set forth in the most recent Compliance
Certificate delivered by the Guarantor pursuant to the Guarantee.

      "LIBO Rate" means for any LIBO Rate Period at any time, the applicable
London interbank offered rate for deposits in U.S. dollars appearing on Telerate
Page 3750 as of 11:00 a.m. (London time) two (2) Business Days prior to the
first day of the LIBO Rate Period chosen by Lessee or otherwise in effect
pursuant to Section 10.1 of the Participation Agreement, and having a maturity
approximately equal to such LIBO Rate Period; or if no London interbank offered
rate of such maturity then appears on Telerate Page 3750, then the rate equal to
the London interbank offered rate for deposits in U.S. dollars maturing
immediately before or immediately after such maturity, whichever is higher, as
determined by Agent from Telerate Page 3750; or if Telerate Page 3750 is not
available, the applicable LIBO Rate for the relevant LIBO Rate Period shall be
the rate determined by Agent to be the arithmetic average of the rates at which
ABN AMRO offers to place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of such LIBO Rate Period, in the
approximate amount of the aggregate outstanding Lease Balance to which such LIBO
Rate is to apply having a maturity approximately equal to such LIBO Rate Period.

      "LIBO Rate Funding" means, with respect to any Participation Interest, the
portion of such Participation Interest which is accruing interest or yield by
reference to the LIBO Rate (Reserve Adjusted).

      "LIBO Rate Period" means, with respect to any LIBO Rate Funding:

            (a) (i) initially the period commencing on the applicable Lease
      Supplement Closing Date, so long as three (3) Business Days prior written
      notice of such Lease Supplement Closing Date has been given in accordance
      with Section 3.3 of the Participation Agreement and ending one, two, three
      or six months thereafter, as selected by Lessee in the relevant Lease
      Supplement Closing Date Notice; or

                  (ii) with respect to any conversion of any portion of any
      Participation Interests into a LIBO Rate Funding from a Prime Rate
      Funding, the period commencing on the day on which such Prime Rate Funding
      is so converted pursuant to an irrevocable notice of conversion given to
      Agent by Lessee pursuant to Section 3.2(g) of the Participation Agreement
      and ending one, two, three or six months thereafter, as selected by Lessee
      in such notice of conversion; and

            (b) thereafter, each period commencing on the last day of the next
      preceding LIBO Rate Period applicable to such Participation Interests and
      ending one, two, three or six months thereafter, as selected by Lessee by
      irrevocable notice to Lessor and the Agent

                                 Appendix 1-22
<PAGE>

      not less than three Business Days prior to the last day of the then
      current LIBO Rate Period with respect thereto;

provided that, the foregoing provisions relating to LIBO Rate Periods are
subject to the following:

            (i) if any LIBO Rate Period would otherwise end on a day that is not
      a Business Day, such LIBO Rate Period shall be extended to the next
      succeeding Business Day unless the result of such extension would be to
      carry such LIBO Rate Period into another calendar month, in which event
      such LIBO Rate Period shall end on the immediately preceding Business Day;

            (ii) any LIBO Rate Period in respect of Participation Interests
      relating to any Lease Supplement that would otherwise extend beyond the
      Expiration Date in respect of such Lease Supplement shall end on such
      Expiration Date;

            (iii) any LIBO Rate Period that begins on a day for which there is
      no numerically corresponding day in the calendar month at the end of such
      LIBO Rate Period shall end on the last Business Day of such last calendar
      month of such LIBO Rate Period;

            (iv) Lessee shall select LIBO Rate Periods so as not to require a
      payment or prepayment of any Participation Interests during a LIBO Rate
      Period for such Participation Interests; and

            (v) if Lessee shall fail to specify the length of any LIBO Rate
      Period for any Participation Interests, such Participation Interests shall
      have a LIBO Rate Period of one month.

      Interest and yield computations in respect of LIBO Rate Fundings shall be
made including the first day, but excluding the last day, occurring in each LIBO
Rate Period.

      "LIBO Rate (Reserve Adjusted)" means, relative to any Advance for any LIBO
Rate Period, a rate per annum (rounded upwards, if necessary, to the nearest
1/16 of 1%) determined pursuant to the following formula:

                  LIBO RATE                         LIBO RATE
             (Reserve Adjusted)    =     --------------------------------
                                         1.00 - LIBOR Reserve Percentage

      The LIBO Rate (Reserve Adjusted) for any LIBO Rate Period will be
determined by Agent, on the basis of the LIBOR Reserve Percentage in effect on,
and the applicable LIBO Rate obtained by Agent, two Business Days before the
first day of such LIBO Rate Period.

      "LIBOR Reserve Percentage" means, relative to any LIBO Rate Period, the
reserve percentage (expressed as a decimal) equal to the maximum aggregate
reserve requirements (including all basic, emergency, supplemental, marginal and
other reserves and taking into account any transitional adjustments or other
scheduled changes in reserve requirements) specified under regulations issued
from time to time by the F.R.S. Board and then applicable to

                                 Appendix 1-23
<PAGE>

assets or liabilities consisting of and including "Eurocurrency Liabilities", as
currently defined in Regulation D of the F.R.S. Board, having a term
approximately equal or comparable to such LIBO Rate Period.

      "Lien" means any mortgage, deed of trust, pledge, security interest,
encumbrance, lien, easement, declaration or servitude of any kind, including,
without limitation, any irrevocable license, conditional sale or other title
retention agreement or any financing lease having substantially the same
economic effect as the foregoing.

      "Management Committee" is defined in the Master Agreement.

      "Master Agreement" means that certain Master Agreement dated as of May 9,
2000 among Toshiba, SENA and Guarantor, together with all Schedules, Exhibits
and Appendices thereto, as the same may be amended, restated, supplemented or
otherwise modified from time to time to the extent permitted by the Operative
Documents.

      "Master Agreement Documents" means the Master Agreement, the Operating
Agreement, the Lessee Articles, the Environmental Indemnity Agreement, the DSC
Services Agreement and when effective, the Sublease, the Purchase and Supply
Agreements, the DSC Foundry Agreement and any Affiliate Sublease, as any such
document may be amended, restated, supplemented or otherwise modified from time
to time to the extent permitted by the Operative Documents.

      "Master Agreement Event of Default" means a breach or default by any
applicable Person under any of the Specified Master Agreement Document
Provisions.

      "Material Adverse Effect" means any change or changes, effect or effects
or condition or conditions that individually or in the aggregate are or would
reasonably be expected to be materially adverse to (i) the business operations
or financial condition of Lessee or of Guarantor and its Subsidiaries on a
consolidated basis, (ii) the Overall Transaction, (iii) the ability of Lessee or
Guarantor to perform their respective obligations under the Operative Documents,
(iv) the validity or enforceability of any of the Operative Documents, or (v)
the useful life or Fair Market Value of the Equipment then subject to the Lease,
on any date of determination.

      "Materials of Environmental Concern" shall mean and include chemicals,
pollutants, contaminants, wastes, toxic substances, petroleum and petroleum
products.

      "Members" means the members of Lessee which, as of the Document Closing
Date, are the Guarantor and SENA.

      "Membership Interest" means a Member's aggregate rights in Lessee,
including such Member's right to a share of the profits and losses of Lessee,
the right to receive distributions from Lessee and the right to vote and
participate in the management of Lessee.

      "Modifications" is defined in Section 5.4 of the Lease.

      "Moody's" means Moody's Investors Service, Inc. or any successor agency
thereto.

                                 Appendix 1-24
<PAGE>

      "Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.

      "Non-Consenting Participant" means any Participant that has not consented
to (a) any amendment or waiver requested pursuant to the Operative Documents, or
(b) any Lease Extension pursuant to Section 14.18 of the Participation
Agreement.

      "Non-Defaulting Participant" is defined in Section 3.4(b) of the
Participation Agreement.

      "Obligations" means all obligations (monetary or otherwise) of Lessee
arising under or in connection with any of the Operative Documents.

      "Operating Agreement" means the Operating Agreement dated as of May 9,
2000 between the Guarantor and SENA with respect to the formation and governance
of Lessee, as the same may be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted by the Operative Documents.

      "Operating Committee" is defined in the Operating Agreement.

      "Operative Documents" means the following:

      (a)   the Participation Agreement;
      (b)   the Lease;
      (c)   the Lease Supplements;
      (d)   the Security Documents;
      (e)   the Bills of Sale;
      (f)   the Guarantee; and
      (g)   the Fee Letter.

      "Option Exercise Amount" means, as of any date of determination with
respect to any Lease Supplement, the sum of the relevant Lease Supplement
Balance plus all accrued but unpaid Rent thereon plus all other sums then due
and payable with respect thereto under the Operative Documents by Lessee or any
of its Affiliates.

      "Original Part" is defined in Section 5.4 of the Lease.

      "Overall Transaction" means all the transactions and activities referred
to in or contemplated by the Operative Documents.

      "Overdue Rate" means the Prime Rate plus 2.0% per annum.

      "Part" means all appliances, parts, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature that may from
time to time be incorporated or installed in or attached to any Item of
Equipment.

      "Participant Balance" means (a) with respect to any Lease Supplement for
each Participant, the sum of its Tranche A Participant Balance related thereto,
its Tranche B Participant Balance related thereto and its Tranche C Participant
Balance related thereto, and (b)

                                 Appendix 1-25
<PAGE>

with respect to the Lease Balance for each Participant, the sum of its Tranche A
Participant Balance, its Tranche B Participant Balance and its Tranche C
Participant Balance.

      "Participants" means, collectively, the Tranche A Participants, the
Tranche B Participants, and the Tranche C Participants.

      "Participation Agreement" means the Participation Agreement
(FlashVision/SanDisk Tranche), dated as of December 27, 2000, among Lessee,
Agent, Lessor and the Participants.

      "Participation Interest" means, as to each Tranche A Participant and
Tranche B Participant, a participation interest or, as to each Tranche C
Participant, an equity interest, in the Advances Funded by it and the Lease and
the right to receive its applicable portion of the following payments actually
received by Lessor from or on behalf of Lessee with respect to any Lease
Supplement or any other Operative Document, pursuant to the provisions of
Section 5.3 of the Participation Agreement: (i) Basic Rent, (ii) Supplemental
Rent, (iii) Option Exercise Amount, (iv) Proceeds, (v) Residual Value Guarantee
Amount, (vi) the Lease Balance or any Lease Supplement Balance, and (vii) other
payments in respect of indemnities or pursuant to the Guarantee or the exercise
of remedies under the Operative Documents, but excluding, however, (x) any
Excepted Payments and (y) as to a particular Participant, any payments on
account of any Advances and interest or yield thereon for which Lessor has not
received payment from such Participant of such Participant's Commitment
Percentage thereof.

      "Payment Date" means, with respect to the Base Term and each Renewal Term
in respect of any Lease Supplement, (a) as to any Variable Rent accruing based
on a LIBO Rate, the last day of each LIBO Rate Period therefor then in effect
(or, if any such LIBO Rate Period is longer than three months, the three month
calendar anniversary of the first day of such LIBO Rate Period and the last day
of such LIBO Rate Period), (b) as to any other Variable Rent, the fifteenth
(15th) day of each month or if such fifteenth (15th) day is not a Business Day,
the next succeeding Business Day, and (c) as to any Fixed Rent payable with
respect thereto, each Business Day specified on Schedule A to the Lease as a
"Payment Date" in respect of Fixed Rent thereon.

      "Payment Default" means an Event of Default contemplated by Section 8.1(a)
of the Lease.

      "PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.

      "Pension Plan" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to Section 412 of the Code or Section 302 of ERISA.

      "Permitted Contest" means actions taken by a Person to contest in good
faith, by appropriate proceedings initiated timely and diligently prosecuted,
the legality, validity or applicability to any Equipment or other Collateral or
any interest in any thereof of any Person of (a) any law, regulation, rule,
judgment, order or other legal provision or judicial or administrative
requirements; (b) any term or condition of, or any revocation or amendment of,
or other proceeding relating to, any authorization or other consent, approval or
other action by any Governmental Authority or any Governmental Action; (c) any
manufacturer's guidelines or

                                 Appendix 1-26
<PAGE>

standards or any Insurance Requirements, or (d) any Lien or Tax; provided that
the initiation and prosecution of such contest would not: (i) result in, or
increase the risk of the imposition of, any criminal liability on any
Indemnitee; (ii) materially and adversely affect the security interests created
by the Operative Documents or the right, title or interest of Agent, Lessor or
any Participant in or to any of the Equipment or any Part thereof or other
Collateral or the right of Agent, Lessor or any Participant to receive all or
any portion of the Rent, Lease Balance, or any other amount payable under the
Operative Documents; (iii) permit, or pose a material risk of, the sale or
forfeiture of, or foreclosure on, any Equipment or any Part thereof or other
Collateral; or (iv) materially and adversely affect the fair market value,
utility or remaining useful life of any Equipment or other Collateral or any
interest therein or the continued economic operation thereof; and provided
further that in any event adequate reserves in accordance with GAAP are
maintained against any adverse determination of such contest.

      "Permitted Liens" means (a) any rights in favor of Agent, Lessor and/or
the Participants pursuant to the Lease and the other Operative Documents; (b)
materialmen's, mechanics', workers', artisan's, repairmen's, employees' or other
like Liens securing payment of the price of goods or services (but excluding any
Installation Expenses) rendered in the ordinary course of business for amounts
the payment of which is not overdue or is being contested pursuant to a
Permitted Contest; (c) any Lessor Lien; (d) Liens for current Taxes which are
not delinquent or the validity of which is being contested pursuant to a
Permitted Contest; (e) Liens of any of the types referred to in clause (b) above
that have been bonded for not less than the full amount in dispute (or as to
which other security arrangements reasonably satisfactory to Lessor have been
made), which bonding (or arrangements) shall comply with applicable Requirements
of Law, and has effectively stayed any execution or enforcement of such Liens;
(f) Liens arising out of judgments or awards with respect to which appeals or
other proceedings for review are being prosecuted in good faith and for the
payment of which adequate reserves have been provided as required by GAAP or
other appropriate provisions have been made, so long as such proceedings have
the effect of staying the execution of such judgments or awards and satisfy the
conditions for the continuation of proceedings to contest set forth in Section
5.7 of the Lease; (g) Liens attaching to property or assets (other than the
Equipment or other Collateral) and created with the consent of the Required
Participants; (h) Liens (other than Liens created or imposed under ERISA or
Liens on or in any way affecting the Equipment) incurred or deposits made by
Lessee in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, bids, leases,
government contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money); (i)
the respective rights and interests of the parties under the Sublease or any
Affiliate Sublease; provided (i) such rights and interests under such Sublease
or Affiliate Sublease remain at all times subject and subordinate to the rights
of Agent and the Participants and the Liens granted to Lessor and/or Agent under
the Operative Documents and (ii) such Sublease or Affiliate Sublease shall not
create, grant or provide for any Lien against any Equipment; and (j) Liens in
favor of manufacturers of equipment that is to become Equipment but only so long
as such Liens terminate on or prior to such equipment being purchased by Lessor
pursuant to the Participation Agreement, other than with respect to the
Equipment subject to the final Lease Supplement for which a Holdback Amount has
been established; provided that such Liens terminate upon release of the
Holdback Amount.

                                 Appendix 1-27
<PAGE>

      "Permitted Modification" is defined in Section 5.4 of the Lease.

      "Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization, Governmental Authority or any other entity.

      "Prime Rate" means, on any date on which the Prime Rate is used with
respect to any Variable Rent, a fluctuating rate of interest per annum equal to
the greater of (i) the rate of interest most recently announced by ABN AMRO as
its prime rate and (ii) the Federal Funds Effective Rate most recently
determined by Agent, plus 50 basis points per annum. If the Federal Funds
Effective Rate or the rate of interest announced by ABN AMRO as its prime rate,
as applicable, changes from time to time after the Document Closing Date, the
Prime Rate shall be automatically increased or decreased, if appropriate and as
the case may be, without notice to Lessee or Lessor, as of the effective time of
each change.

      "Prime Rate Funding" means, with respect to any Participation Interest,
the portion of such Participation Interest which is accruing interest or yield
by reference to the Prime Rate.

      "Proceeds" means all amounts received by Agent or Lessor in connection
with any Casualty or any sale of the Equipment pursuant to Lessor's exercise of
remedies under Section 8.2 of the Lease or Lessee's exercise of the Sale Option
under Section 11.1(c) of the Lease, and all interest earned thereon, less,
solely in the case of a sale pursuant to Section 8.2 of the Lease, the
reasonable expense of claiming and collecting such amounts, including all
reasonable costs and expenses in connection therewith for which Agent, Lessor or
any Participant is entitled to be reimbursed pursuant to the Lease.

      "Purchase and Supply Agreements" means each Purchase and Supply Agreement
to be entered into between Lessee and each of SENA and SanDisk, respectively,
and referred to in Section 8.1(w) of the Participation Agreement.

      "Purchase Option" is defined in Section 11.1(b) of the Lease.

      "Purchase Price" for any Equipment means an amount equal to the lesser of
(a) the purchase price paid by Lessee to the manufacturer or vendor of such
Equipment pursuant to the applicable Acquisition Agreement, including any other
amounts payable to the manufacturer or vendor of such Equipment and referred to
in the invoice for such Equipment, to the extent included in the applicable
Appraisal referred to in clause (b) below, and (b) the Fair Market Value of such
Equipment as of the Lease Supplement Closing Date therefor indicated in (i) the
Initial Appraisal, or (ii) in the case of any Equipment acquired by Lessor as of
any Lease Supplement Closing Date occurring after the first anniversary of the
Document Closing Date, the most recent Annual Appraisal delivered as of such
Lease Supplement Closing Date, provided that in the event a Supplemental
Appraisal of any Equipment is required to be delivered pursuant to Section
6.2(b) of the Participation Agreement, the Fair Market Value of such Equipment
shall be as indicated in such Supplemental Appraisal.

      "Regulated Activity" shall mean the use, Release, generation, treatment,
storage, recycling, transportation or disposal of Hazardous Substance to the
extent such activities are regulated by any Governmental Authority.

                                 Appendix 1-28
<PAGE>

      "Regulation T, U, or X" means Regulation T, U or X, respectively, of the
F.R.S. Board as from time to time in effect and any successor to all or a
portion thereof.

      "Related Agreements" shall mean all agreements or contracts now or
hereafter necessary for the use, operation or maintenance of any Equipment or
otherwise relating to any Equipment, including each Acquisition Agreement, but
excluding the Master Agreement Documents.

      "Related Goods" shall mean (a) all operation manuals, service manuals,
maintenance manuals and other materials regarding the operation, service or
maintenance of the Equipment provided by the vendors or manufacturers of the
Equipment or others and (b) all books and records relating to the Equipment in
any and all tangible forms, except to the extent the same constitutes
confidential business information or processes of Lessee.

      "Related Intangibles" shall mean all general intangibles now or hereafter
necessary for the use, operation or maintenance of any Equipment or otherwise
relating to any Equipment, including all records, files, insurance policies,
guarantees and warranties relating to such Equipment, and all computer software
and intellectual property, guaranties and warranties and documents relating to
such Equipment to the extent provided by the manufacturer or vendor of the
Equipment, except to the extent the same constitutes proprietary business
information or processes of Lessee, in each case to the extent assignable.

      "Related Permits" shall mean all licenses, authorizations, certificates,
consents, approvals and other permits, now or hereafter necessary for the use,
operation or maintenance of the Equipment or otherwise relating to the
Equipment.

      "Related Property" means, with respect to any Lease Supplement, all
Related Agreements, Related Goods, Related Intangibles and Related Permits
applicable thereto.

      "Release" means the release, deposit, disposal or leak of any Hazardous
Substance into or upon or under any land or water or air, or otherwise into the
environment, including, without limitation, by means of burial, disposal,
discharge, emission, injection, spillage, leakage, seepage, leaching, dumping,
pumping, pouring, escaping, emptying, placement and the like.

      "Removable Part" is defined in Section 5.4 of the Lease.

      "Renewal Payment" means, with respect to any Lease Supplement, the payment
required to be made pursuant to Section 4.1(b) of the Lease on the last day of
the relevant Base Term or Renewal Term, as applicable, which payment shall be
applied to reduce the applicable outstanding Lease Supplement Balance as of such
date (after applying any Fixed Rent or Casualty Amount payable or to be paid on
such date with respect to such Lease Supplement) to an amount not in excess of
the aggregate Fair Market Value of the relevant Lease Supplement Equipment as of
such date, but in each case only to the extent, if any, that such Lease
Supplement Balance exceeds the Fair Market Value of such Equipment.

      "Renewal Option" is defined in Section 11.1(a) of the Lease.

      "Renewal Term" is defined in Section 11.1(a) of the Lease.

                                 Appendix 1-29
<PAGE>

      "Rent" means, collectively, the Basic Rent and the Supplemental Rent, in
each case payable under the Lease.

      "Replaced Equipment" is defined in Section 6.4 of the Lease.

      "Replacement Notice" is defined in Section 6.4 of the Lease.

      "Replacement Participant" is defined in Section 10.1(b) of the
Participation Agreement.

      "Replacement Equipment" means (x) a new Item of Equipment of identical
manufacture and model as the Item of Equipment comprising the Replaced Equipment
or (y) an Item of Equipment which shall have a utility, Fair Market Value, and
an economic useful life at least equal to that of the Replaced Equipment
immediately prior to such substitution assuming the Replaced Equipment was in
the condition and repair required to be maintained by the terms of the Lease,
and Lessee shall have provided to Agent and Lessor at Lessee's expense, an
appraisal satisfactory to Agent and Lessor with respect to the determination of
such utility, Fair Market Value and economic useful life or (z) such Replacement
Equipment as shall otherwise be acceptable to each of the Participants in its
respective sole and absolute discretion.

      "Required Alteration" is defined in Section 5.4 of the Lease.

      "Required Participants" means, as of any date of the determination,
Participants the Commitment Percentages of which aggregate at least 51% of the
aggregate Commitment Percentages of all Participants.

      "Requirements of Law" means all Federal, state, county, municipal and
other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions, affecting the Equipment or other Collateral,
or the demolition, manufacture, installation, use or alteration thereof, whether
now or hereafter enacted and in force, including any that require repairs,
modifications or alterations in or to the Equipment or other Collateral or in
any way limit the use and enjoyment thereof and any that may relate to
environmental requirements (including all Environmental Laws), and all permits,
licenses, authorizations and regulations relating thereto.

      "Residual Value Guarantee Amount" means, with respect to any Lease
Supplement as of any date of determination, an amount equal to the percentage,
as specified in Schedule B to the Lease in respect of the Base Term or Renewal
Term then in effect, with respect to such Lease Supplement of the applicable
Lease Supplement Balance as of the first day of the Base Term or Renewal Term
then in effect with respect to such Lease Supplement, less Fixed Rent and
Casualty Amounts applied to the Tranche A Participant Balance paid by Lessee in
respect thereof or any other amount paid in reduction of the applicable Lease
Supplement Balance and applied to the Tranche A Participant Balance during the
Base Term or Renewal Term then in effect, but in no event less than the
aggregate outstanding Participation Interests of the Tranche A Participants in
respect of such Lease Supplement on the applicable Expiration Date.

      "Responsible Officer" means (i) in the case of Lessee, the President, the
Chief Executive Officer or Executive Vice President, and (ii) in the case of
Guarantor, the Chief Financial Officer.

                                 Appendix 1-30
<PAGE>

      "Responsible Officer's Certificate" means a certificate signed by any
Responsible Officer, which certificate shall certify as true and correct the
subject matter being certified to in such certificate.

      "Restricted Payment" means (i) any dividend or other payment or
distribution, direct or indirect, on account of any Membership Interests of
Lessee now or hereafter outstanding (including without limitation any payment in
connection with any dissolution, merger, consolidation or disposition involving
Lessee), or to the Members, in their capacity as such, in respect of any
Membership Interests of Lessee, now or hereafter outstanding, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Membership Interests of
Lessee, now or hereafter outstanding and (iii) any payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other rights to
acquire Membership Interests of Lessee now or hereafter outstanding.

      "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor agency thereto.

      "Sale Option" is defined in Section 11.1(c) of the Lease.

      "Scheduled Lease Supplement Closing Date" is defined in Section 3.4 of the
Participation Agreement.

      "SEC" means the Securities and Exchange Commission.

      "Securities Act" means the Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.

      "Security Agreement " means that certain Security Agreement to be entered
into as of the initial Lease Supplement Closing Date between Lessor and Agent,
for the benefit of the Participants.

      "Security Documents" means the Security Agreement, the Collateral
Assignment and all UCC financing statements executed, delivered and filed or
required to be executed, delivered and filed pursuant to the Operative
Documents.

      "SENA" means Semiconductor North America, Inc. a Delaware corporation and
a wholly-owned Subsidiary of Toshiba.

      "Specified Master Agreement Document Provisions" means the provisions of
the Master Agreement Documents specified on Schedule 8.1(s) to the Participation
Agreement, as amended from time to time in accordance with Section 8.1(w) of the
Participation Agreement.

      "Sublease" means that certain Master Lease Agreement (FlashVision/SanDisk
Tranche) to be entered into on or prior to the initial Lease Supplement Closing
Date between Lessee, as lessor, and DSC, as lessee, relating to the Equipment.

      "Subsidiary" shall mean, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of

                                 Appendix 1-31
<PAGE>

the board of directors or other Persons performing similar functions are at the
time directly or indirectly owned by such Person.

      "Sub-Participant" is defined in Section 11.2 of the Participation
Agreement.

      "Supplemental Appraisal" means any update (which update shall be a desktop
appraisal) of the Initial Appraisal or then most recent Annual Appraisal, as
applicable, from an Appraiser received pursuant to Section 6.2(b) of the
Participation Agreement on a Lease Supplement Closing Date, setting forth as of
such date the Fair Market Value of each Item of Equipment then required to be
appraised pursuant to said Section 6.2(b) of the Participation Agreement, any of
which appraisal updates shall be in form and substance reasonably satisfactory
to Agent and the Required Participants and shall use appraisal methods
consistent with the methods used in the Initial Appraisal. Each such appraisal
shall be prepared at the sole cost and expense of Lessee.

      "Supplemental Rent" means any and all amounts, liabilities and obligations
other than Basic Rent which Lessee assumes or agrees or is otherwise obligated
to pay under the Lease or any other Operative Document (whether or not
designated as Supplemental Rent) to Agent, Lessor, any Participant or any other
Person, including without limitation, Fees, Break Costs, any Residual Value
Guarantee Amount, any Lease Balance, any Lease Supplement Balance, any Renewal
Payment and any Additional Costs.

      "Synthetic Lease" means a lease intended to qualify as an operating lease
under Financial Accounting Standards Board Statement No. 13 where the lessee
retains beneficial ownership of the leased property for federal income tax
purposes.

      "Taxes" is defined in the definition of Impositions.

      "Toshiba" means Toshiba Corporation, a Japanese corporation.

      "Toshiba Lease" means the Master Lease Intended as Security between ABN
AMRO, in its capacity as lessor, and Lessee relating to the FlashVision/Toshiba
Tranche Operative Documents.

      "Tranche" with respect to the Participation Interests means the Tranche A
Participation Interests, the Tranche B Participation Interests or the Tranche C
Equity Interests.

      "Tranche A Participant" means a Person named as a Tranche A Participant on
Schedule I to the Participation Agreement.

      "Tranche A Participant Balance" means (a) with respect to any Lease
Supplement Balance for each Tranche A Participant as of any date of
determination an amount equal to such Participant's Tranche A Participation
Interest as of such date in the outstanding amount of the Advance made in
respect of such Lease Supplement, and (b) with respect to the Lease Balance
means for each Tranche A Participant as of any date of determination an amount
equal to the sum of such Participant's Tranche A Participation Interest as of
such date in all outstanding Advances.

                                 Appendix 1-32
<PAGE>

      "Tranche A Participation Interest" means, as to each Tranche A Participant
as of any date of determination and with respect to any Lease Supplement, such
Tranche A Participant's Tranche A Participation Interest Commitment Percentage
multiplied by the outstanding amount of the Advance with respect to such Lease
Supplement as to which such Participant has Funded its Tranche A Participation
Interest Commitment Percentage under Article III of the Participation Agreement.

      "Tranche A Participation Interest Commitment" is defined in Section 3.2(a)
of the Participation Agreement.

      "Tranche A Participation Interest Commitment Percentage" means with
respect to each Tranche A Participant and each Lease Supplement, the percentage
of the Aggregate Commitment Amount set forth after such Participant's Tranche A
Participation Interest Commitment in Schedule I to the Participation Agreement.

      "Tranche B Participant" means a Person named as a Tranche B Participant on
Schedule I to the Participation Agreement.

      "Tranche B Participant Balance" means (a) with respect to any Lease
Supplement Balance for each Tranche B Participant as of any date of
determination an amount equal to the sum of such Participant's Tranche B
Participation Interest as of such date in the outstanding amount of the Advance
made in respect of such Lease Supplement, and (b) with respect to the Lease
Balance means for each Tranche B Participant as of any date of determination an
amount equal to the sum of such Participant's Tranche B Participation Interest
as of such date in all outstanding Advances.

      "Tranche B Participation Interest" means, as to each Tranche B Participant
as of any date of determination and with respect to any Lease Supplement, such
Tranche B Participant's Tranche A Participation Interest Commitment Percentage
in respect of such Lease Supplement multiplied by the outstanding amount of the
Advance with respect to such Lease Supplement as to which such Participant has
funded its Tranche B Participation Interest Commitment Percentage under Article
III of the Participation Agreement.

      "Tranche B Participation Interest Commitment" is defined in Section 3.2(a)
of the Participation Agreement.

      "Tranche B Participation Interest Commitment Percentage" means with
respect to each Tranche B Participant and each Lease Supplement, the percentage
of the Aggregate Commitment Amount set forth after such Participant's Tranche B
Participation Interest Commitment in Schedule I to the Participation Agreement.

      "Tranche C Equity Interest" means, as to each Tranche C Participant as of
any date of determination and with respect to any Lease Supplement, such Tranche
C Participant's Tranche C Equity Interest Commitment Percentage multiplied by
the outstanding amount of the Advance with respect to such Lease Supplement as
to which such Participant has funded its Tranche C Equity Interest Commitment
Percentage under Article III of the Participation Agreement.

                                 Appendix 1-33
<PAGE>

      "Tranche C Equity Interest Commitment" is defined in Section 3.2(a) of the
Participation Agreement.

      "Tranche C Equity Interest Commitment Percentage" means with respect to
each Tranche C Participant and each Lease Supplement, the percentage of the
Aggregate Commitment Amount set forth after such Participant's Tranche C Equity
Interest Commitment in Schedule I to the Participation Agreement.

      "Tranche C Participant" means the Person named as a Tranche C Participant
on Schedule I to the Participation Agreement.

      "Tranche C Participant Balance" means (a) with respect to any Lease
Supplement Balance for each Tranche C Participant as of any date of
determination an amount equal to the sum of such Participant's Tranche C Equity
Interest as of such date in the outstanding amount of the Advance made in
respect of such Lease Supplement, and (b) with respect to the Lease Balance
means for each Tranche C Participant as of any date of determination an amount
equal to the sum of such Participant's Tranche C Equity Interest as of such date
in all outstanding Advances.

      "Transaction Expenses" means all reasonable costs and expenses incurred in
connection with the preparation, execution and delivery of the Operative
Documents and the transactions contemplated by the Operative Documents including
without limitation:

            (a) the reasonable fees and expenses of McGuireWoods LLP, special
      counsel to Agent and Lessor and document counsel to the Participants (it
      being understood that Lessee will not be obligated to pay legal fees and
      expenses for any additional counsel for any Participant except as
      otherwise provided in Section 14.15(c) of the Participation Agreement);

            (b) the initial and ongoing fees and reasonable expenses of Agent
      and Lessor;

            (c) all applicable appraisal fees and reasonable expenses;

            (d) search fees, recording fees and filing fees incurred in
      connection with Lien searches and the filing of UCC financing statements;

            (e) any other reasonable out-of-pocket expenses of any party to the
      Operative Documents incurred in connection with the consummation of the
      Overall Transaction on the Document Closing Date; and

            (f) the reasonable fees and expenses of Mayer, Brown & Platt,
      special counsel to Lessee and Guarantor.

      "Transferee" is defined in Section 11.3(a) of the Participation Agreement.

      "Type" means, with respect to any Funding as of any date of determination,
its nature as a LIBO Rate Funding or a Prime Rate Funding as of such date.

                                 Appendix 1-34
<PAGE>

      "Uniform Commercial Code" and "UCC" means the Uniform Commercial Code as
in effect in any applicable jurisdiction.

      "Variable Rent" means with respect to each Interest Period occurring
during the Base Term and any Renewal Term with respect to any Lease Supplement,
an amount equal to the interest and yield accrued on the Participation Interests
made in respect of such Lease Supplement outstanding during such period at the
applicable per annum rate determined in accordance with Section 3.2(b) of the
Participation Agreement.

                                 Appendix 1-35<PAGE>
                                                                   Exhibit 10.49
                                                                  EXECUTION COPY

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

                        MASTER LEASE INTENDED AS SECURITY
                          (FLASHVISION/SANDISK TRANCHE)

                          Dated as of December 27, 2000

                                     between

                              FLASHVISION, L.L.C.,
                                   as Lessee,

                                       and

                               ABN AMRO BANK N.V.,
              not in its individual capacity, but solely as Lessor

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

THIS LEASE HAS BEEN EXECUTED IN 10 MANUALLY EXECUTED SERIALLY NUMBERED
COUNTERPARTS OF WHICH THIS IS COUNTERPART NUMBER ___. TO THE EXTENT, IF ANY,
THAT THIS LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE
UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION) NO SECURITY
INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY
COUNTERPART HEREOF OTHER THAN COUNTERPART "NUMBER 1", WHICH SHALL BE IDENTIFIED
AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY AGENT ON OR
FOLLOWING THE SIGNATURE PAGE THEREOF.
<PAGE>

                                                                  EXECUTION COPY

                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I DEFINITIONS; LESSEE LIABILITY........................................1

ARTICLE II DELIVERY AND ACCEPTANCE.............................................1

      Section 2.1 Acceptance and Lease of Equipment............................1
      Section 2.2 Acceptance Procedure.........................................1

ARTICLE III LEASE TERM.........................................................2

      Section 3.1 Lease Term...................................................2

ARTICLE IV RENT; OTHER ECONOMIC PROVISIONS.....................................2

      Section 4.1 Basic Rent and Renewal Payments; Residual Value Guarantee
                  Amount. .....................................................2
      Section 4.2 Supplemental Rent............................................3
      Section 4.3 Place and Manner of Payment..................................3
      Section 4.4 Net Obligations..............................................3
      Section 4.5 Overdue Amounts..............................................4

ARTICLE V POSSESSION, ASSIGNMENT, USE AND MAINTENANCE OF EQUIPMENT.............4

      Section 5.1 Possession and Use of the Equipment; Compliance with Law.....4
      Section 5.2 Subleases and Assignments....................................5
      Section 5.3 Maintenance..................................................5
      Section 5.4 Alterations, Modifications, etc..............................6
      Section 5.5 Liens........................................................7
      Section 5.6 Inspection...................................................7
      Section 5.7 Permitted Contests...........................................8
      Section 5.8 Annual Appraisals............................................8

ARTICLE VI RISK OF LOSS; INSURANCE; REPLACEMENTS OF EQUIPMENT..................8

      Section 6.1 Casualty.....................................................8
      Section 6.2 Insurance Coverages.........................................10
      Section 6.3 Delivery of Insurance Certificates..........................11
      Section 6.4 Replacement and Substitution................................11

ARTICLE VII WARRANTIES........................................................12

ARTICLE VIII EVENTS OF DEFAULT; REMEDIES......................................13

      Section 8.1 Events of Default...........................................13
      Section 8.2 Remedies....................................................15
      Section 8.3 Sale of Collateral..........................................16
      Section 8.4 Application of Proceeds.....................................16
      Section 8.5 Right to Perform Obligations................................16
      Section 8.6 Power of Attorney...........................................17

                                       i
<PAGE>

                                                                  EXECUTION COPY

      Section 8.7 Lessee Purchase Following Event of Default..................17

ARTICLE IX RETURN OF EQUIPMENT................................................17

      Section 9.1 Return of Equipment.........................................17

ARTICLE X EARLY TERMINATION...................................................19

      Section 10.1 Early Termination .........................................19
      Section 10.2 Required Termination ......................................19

ARTICLE XI LEASE TERMINATION..................................................20

      Section 11.1 Lessee's Options ..........................................20
      Section 11.2 Election of Options .......................................21
      Section 11.3 Sale Option Procedures ....................................21
      Section 11.4 Appraisals ................................................22

ARTICLE XII OWNERSHIP, GRANT OF SECURITY INTEREST AND FURTHER ASSURANCES......22

      Section 12.1 Grant of Security Interest ................................22
      Section 12.2 Retention of Proceeds .....................................23

ARTICLE XIII MISCELLANEOUS....................................................23

      Section 13.1 Effect of Waiver ..........................................23
      Section 13.2 Applicable Law ............................................23
      Section 13.3 Effect and Modification of Lease ..........................23
      Section 13.4 Notices ...................................................23
      Section 13.5 Counterparts ..............................................23
      Section 13.6 Severability ..............................................24
      Section 13.7 Successors and Assigns; Merger ............................24
      Section 13.8 Section Headings; Table of Contents .......................24
      Section 13.9 Final Agreement ...........................................24
      Section 13.10 Timeliness of Performance ................................24
      Section 13.11 FINANCE LEASE ............................................24

Schedule A  Fixed Rent
Schedule B  Residual Value Guarantee Amount

                                       ii
<PAGE>

                                                                  EXECUTION COPY

                        MASTER LEASE INTENDED AS SECURITY

      This MASTER LEASE INTENDED AS SECURITY (FLASHVISION/SANDISK TRANCHE) (as
amended and supplemented from time to time, including each Lease Supplement
entered into pursuant hereto, this "Lease") is entered into as of December 27,
2000 between FLASHVISION, L.L.C., a Virginia limited liability company
("Lessee"), with its principal office at 9600 Godwin Drive, Manassas, Virginia
20110, and ABN AMRO BANK N.V., a bank organized under the laws of the
Netherlands, not in its individual capacity, but solely in its capacity as
Lessor ("Lessor").

                              W I T N E S S E T H:

      NOW THEREFORE, in consideration of the mutual terms and conditions herein
contained, the parties hereto agree as follows:

                                   ARTICLE I

                          DEFINITIONS; LESSEE LIABILITY

      For all purposes hereof, the capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in Appendix 1 to that
certain Participation Agreement (FlashVision/SanDisk Tranche) dated as of
December 27, 2000, among Lessee, Lessor, the Participants party thereto from
time to time and ABN AMRO BANK N.V., not in its individual capacity but solely
in its capacity as Agent for the Participants ("Agent") (the "Participation
Agreement"). All obligations imposed on Lessee in this Lease shall be the full
recourse liability of Lessee.

                                   ARTICLE II

                             DELIVERY AND ACCEPTANCE

      Section 2.1 Acceptance and Lease of Equipment. On each Lease Supplement
Closing Date, subject to the satisfaction or waiver of the conditions set forth
in Article VI of the Participation Agreement and its receipt of Funds from the
Participants, (a) Lessor hereby agrees to accept delivery on such Lease
Supplement Closing Date of the interest in the Equipment to be delivered
pursuant to the terms of the Participation Agreement and simultaneously to lease
such Equipment to Lessee under this Lease, and (b) Lessee hereby agrees,
expressly for the direct benefit of Lessor, Agent and the Participants, to lease
from Lessor hereunder, for the applicable Lease Term, the Equipment to be
delivered on such Lease Supplement Closing Date.

      Section 2.2 Acceptance Procedure. Lessor hereby authorizes one or more
employees of Lessee, to be designated by Lessee, as the authorized
representative or representatives of Lessor to accept delivery under this Lease
of the Equipment identified on Schedule I to each

CERTAIN INFORMATION IN THIS EXHIBIT 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>

                                                                  EXECUTION COPY

Lease Supplement executed by Lessee on the related Lease Supplement Closing
Date. Lessee hereby agrees that such acceptance of delivery by such authorized
representative or representatives and the execution and delivery by Lessee of a
Lease Supplement on such Lease Supplement Closing Date shall, without further
act, constitute the irrevocable acceptance by Lessee under this Lease of the
Equipment which is the subject thereof for all purposes of this Lease and the
other Operative Documents on the terms set forth therein and herein.

                                   ARTICLE III

                                   LEASE TERM

      Section 3.1 Lease Term. Unless earlier terminated, the term of this Lease
with respect to any Lease Supplement (with respect to any Lease Supplement, the
"Lease Term") shall consist of the Base Term in respect of such Lease Supplement
and the Renewal Terms in respect of such Lease Supplement, if any, provided that
in no event shall the Expiration Date of any Renewal Term in respect of any
Lease Supplement extend beyond the fifth (5th) anniversary of the Document
Closing Date without the prior written consent of Lessor and each Participant
pursuant to Section 14.18 of the Participation Agreement.

                                   ARTICLE IV

                         RENT; OTHER ECONOMIC PROVISIONS

      Section 4.1 Basic Rent and Renewal Payments; Residual Value Guarantee
Amount.

      (a) With respect to each Lease Supplement, Lessee shall pay to Lessor
Basic Rent for the relevant Lease Supplement Equipment (i) on each Payment Date,
(ii) on the date required under Section 11.1(c) in connection with Lessee's
exercise of the Sale Option with respect to such Lease Supplement Equipment, and
(iii) on any date on which this Lease terminates or upon demand following an
Event of Default, as provided in Section 8.2. Fixed Rent in respect of each
Lease Supplement shall be payable on the dates and in the amounts set forth on
Schedule A hereto, which schedule shall be amended (i) on each Lease Supplement
Closing Date to reflect the Fixed Rent payable with respect to such Lease
Supplement which may be necessary based on the Lease Supplement Equipment
delivered as of such date and (ii) following the delivery of each Annual
Appraisal pursuant to Section 5.8, if necessary to reflect the Fair Market Value
of the Equipment as of the next succeeding Expiration Date for each Lease
Supplement and the last day of each Renewal Term for each Lease Supplement (but
not beyond the fifth anniversary of the Document Closing Date) permitted
hereunder.

      (b) If a Renewal Term has been elected by Lessee with respect to any Lease
Supplement pursuant to Section 11.1(a), then Lessee shall as a condition
precedent to the effectiveness of such election, on the last Business Day of the
Base Term or the Renewal Term in effect prior to giving effect to such election,
as applicable, in respect of such Lease Supplement, pay to Lessor as
Supplemental Rent an amount (a "Renewal Payment") sufficient,

                                       2

                                       2
<PAGE>

                                                                  EXECUTION COPY

when applied to the outstanding Lease Supplement Balance in respect of such
Lease Supplement pursuant to Section 5.3 of the Participation Agreement, to
reduce such Lease Supplement Balance by the amount, if any, that such Lease
Supplement Balance exceeds the Fair Market Value of such Lease Supplement
Equipment as of such date, as determined pursuant to the most recent Annual
Appraisal therefor delivered pursuant to Section 5.8.

      (c) Schedule B hereto sets forth the percentage referred to in the
definition of "Residual Value Guarantee Amount," for the Base Term and each
Renewal Term for all Lease Supplements.

      Section 4.2 Supplemental Rent. Lessee shall pay to Lessor (or the other
applicable Person entitled thereto pursuant to the Operative Documents) any and
all Supplemental Rent promptly as the same shall become due and payable and in
the event of any failure on the part of Lessee to pay any Supplemental Rent when
due and payable (subject to the applicable notice or grace periods, to the
extent applicable, set forth in Section 8.1(a)), Lessor, and Agent and the
Participants, acting through Lessor, shall have all rights, powers and remedies
provided for herein or by law or in equity or otherwise in the case of
nonpayment of Basic Rent. Lessee hereby reaffirms that its obligation to pay
Supplemental Rent shall include the payment of any and all Additional Costs. The
expiration or other termination of Lessee's obligation to pay Basic Rent
hereunder shall not limit or modify the obligation of Lessee with respect to
Supplemental Rent.

      Section 4.3 Place and Manner of Payment. Payments of Rent shall be paid in
immediately available funds at the office of Agent specified on Schedule II to
the Participation Agreement, or at such other office of Agent as Agent may from
time to time specify to Lessee in a notice pursuant to Section 14.3 of the
Participation Agreement. All payments of Basic Rent, Lease Balance, Lease
Supplement Balance, Option Exercise Amount and Casualty Amount shall be received
by Agent not later than 12:00 noon, Chicago, Illinois time, on the date due;
funds received after such time shall for all purposes under the Operative
Documents be deemed to have been received by Agent on the next succeeding
Business Day. All payments of Supplemental Rent paid to Agent shall be
distributed by Agent in accordance with Section 5.3 of the Participation
Agreement.

      Section 4.4 Net Obligations. This Lease is a net lease and Lessee's
obligation to pay all indemnities and other amounts payable under the Operative
Documents in accordance with their terms shall be absolute and unconditional
under any and all circumstances and, without limiting the generality of the
foregoing, Lessee shall not be entitled to any abatement or reduction of
payments or any setoff against Rent, indemnity or other amounts, whether arising
by reason of any past, present or future claims of any nature by Lessee against
Agent, Lessor or any Participant, or otherwise. Except as otherwise expressly
provided herein, this Lease shall not terminate, nor shall the obligations of
Lessee be otherwise affected: (a) by reason of any defect in, damage to, or loss
of possession or use, obsolescence or destruction, of any or all of the
Equipment, however caused; or (b) by the taking or requisitioning of any or all
of the Equipment by condemnation or otherwise; or (c) by the invalidity or
unenforceability or lack of due authorization by Agent, Lessor, any Participant
or Lessee or other infirmity of this Lease or any other Operative Document; or
(d) by the attachment of any Lien of any third party to any Equipment; or (e) by
any prohibition or restriction of or interference with Lessee's use or quiet

                                       3

                                       3
<PAGE>

                                                                  EXECUTION COPY

enjoyment of any or all of the Equipment by any Person; or (f) by the insolvency
of or the commencement by or against Agent, Lessor or any Participant of any
bankruptcy, reorganization or similar proceeding; or (g) by the failure of
Lessee to achieve the characterization of the transaction intended as set forth
in Section 5.1 of the Participation Agreement; or (h) by any other cause,
whether similar or dissimilar to the foregoing, any present or future law to the
contrary notwithstanding. It is the intention of the parties that all Rent,
indemnities and other amounts payable by Lessee under the Operative Documents
shall be payable in all events in the manner and at the times herein provided
unless Lessee's obligations in respect thereof have been terminated or modified
pursuant to the express provisions of this Lease or any other Operative
Document. To the extent permitted by Applicable Laws, Lessee hereby waives any
and all rights which it may now have or which may at any time be conferred upon
it, by statute or otherwise, to terminate, cancel, quit or surrender this Lease,
in whole or in part, except strictly in accordance with the express terms hereof
and any other Operative Document. Each rental, indemnity or other payment made
by Lessee hereunder shall be final, and Lessee shall not seek to recover (except
as expressly provided in this Lease) all or any part of such payment from Agent,
Lessor or any Participant for any reason whatsoever. In the event that Lessee
believes Lessor or Lessee has made a miscalculation or Lessee has made an
overpayment of any amount due and payable hereunder, Lessee may submit to Lessor
a statement showing the calculation of the correct amount that was due and
payable and request a repayment of any amount Lessee believes to be an excess
payment and Lessor shall reasonably consider such request; provided, that any
such statement shall not be deemed conclusive. Without affecting Lessee's
obligation to pay Rent or other amounts payable under the Operative Documents,
Lessee may seek damages for a breach by Agent, Lessor or any Participant of its
obligations or the inaccuracy of its representations and warranties under this
Lease or the Participation Agreement or any other Operative Documents.

      Section 4.5 Overdue Amounts. If any Rent shall not be paid when due,
Lessee shall pay to Lessor, for its own account or , if payable to the Agent,
any Participant or any other Person for the account of such Person, as
applicable, in each case as Supplemental Rent, interest at the Overdue Rate on
such overdue amount from and including the due date thereof (without regard to
any applicable grace period) to but excluding the Business Day of payment
thereof.

                                   ARTICLE V

            POSSESSION, ASSIGNMENT, USE AND MAINTENANCE OF EQUIPMENT

      Section 5.1 Possession and Use of the Equipment; Compliance with Law.
Lessee agrees that the use of the Equipment will be limited to the fabrication,
assembly and testing of semiconductor wafers and will be used, operated,
maintained and stored in compliance with any and all Applicable Laws, including
all Environmental Laws, where the failure to so comply would have a Material
Adverse Effect, and all Insurance Requirements, except where the failure to
comply would not reasonably be expected to cause the relevant insurance to
lapse, to be cancelled or to be reduced (as to amount or scope of coverage).
Lessee shall procure and maintain in effect all licenses, registrations,
certificates, permits, approvals and consents required by Applicable Laws or any
Governmental Authority, where the failure to so comply would have a Material
Adverse Effect, or any Insurance Requirements, except where the failure to
comply would not reasonably be expected to cause the relevant insurance to
lapse, to be cancelled or to

                                       4

                                       4
<PAGE>

                                                                  EXECUTION COPY

be reduced (as to amount or scope of coverage) in connection with the ownership,
delivery, installation, use and operation of any or all of the Equipment. The
Equipment will at all times be and remain in the possession and control of
Lessee at the Facility, subject, however, to the terms of Section 5.2 and to the
removal of Items of Equipment from the Facility for customary periods for repair
and maintenance in accordance with customary maintenance and overhaul procedures
or for repair or restoration following a casualty. Subject to Lessor's rights
under Section 8.2, 8.3, 8.5, and 8.6 if an Event of Default has occurred and is
continuing, Lessor covenants that it will not interfere in Lessee's use or
possession of the Equipment during the Lease Term.

      Section 5.2 Subleases and Assignments. LESSEE SHALL NOT, WITHOUT THE PRIOR
WRITTEN CONSENT OF AGENT AND LESSOR, SUBLEASE OR OTHERWISE RELINQUISH POSSESSION
OF ANY EQUIPMENT OR OTHER COLLATERAL, OR ASSIGN, TRANSFER OR ENCUMBER ITS
RIGHTS, INTERESTS OR OBLIGATIONS HEREUNDER AND ANY ATTEMPTED SUBLEASE,
RELINQUISHMENT, ASSIGNMENT, TRANSFER OR ENCUMBERING BY LESSEE SHALL BE NULL AND
VOID, except, subject to the terms and conditions set forth in this Section 5.2,
in connection with the Sublease or an Affiliate Sublease as specifically
contemplated by this Section 5.2. Lessee shall be entitled to enter into the
Sublease of the Equipment with DSC or a sublease with any other Affiliate of
Toshiba that is controlled by Toshiba in form substantially similar to the
Sublease (an "Affiliate Sublease"); provided, however, that such Sublease or
Affiliate Sublease and with respect to which such Affiliate has executed and
delivered an acknowledgement to Agent and Lessor substantially similar to the
acknowledgement executed by DSC in respect of the Collateral Assignment in
respect of any Lease Supplement Equipment shall not extend beyond the then
remaining Lease Term applicable thereto, and provided, further, that (i) Lessee
shall at all times remain primarily liable hereunder with respect to all Lease
Supplement Equipment so subleased to the same extent as if such Sublease or
Affiliate Sublease had not occurred; (ii) DSC or any sublessee under an
Affiliate Sublease shall not engage in activities with the Equipment in
contravention of Section 5.1 without prior written consent of Agent and Lessor;
and (iii) each sublease permitted hereby shall contain a provision requiring the
sublessee to give prompt notice of any Casualty to the Equipment to Lessee
within the time period specified herein. Lessee agrees that (i) the Sublease and
any Affiliate Sublease are subject and subordinate to this Lease and the rights
and interests of Agent, Lessor and the Participants and (ii) that the Sublease
and any Affiliate Sublease shall (a) expressly state that it is subject and
subordinate to all of the provisions of this Lease and the other Operative
Documents and the rights and interests of Agent, Lessor and the Participants
under this Lease and the other Operative Documents in respect of the Equipment
covered by the Sublease and any Affiliate Sublease upon the occurrence of an
Event of Default, but in all cases such sublessee shall have the right and
Lessor shall be subject to the same obligation under the applicable sublease as
set forth in the final sentence of Section 5.1, (b) expressly require possession
of the Equipment subject thereto to be returned as directed by Agent or Lessor
upon notice to DSC or any Affiliate sublessee that an Event of Default shall
have occurred and be continuing if Lessor is exercising a remedy to regain
possession of the Equipment pursuant to Article VIII, and (c) expressly prohibit
any further sublease or assignment of the Equipment subject thereto or the
granting of any Lien on the Equipment (other than the Lien of the Sublease and
any Affiliate Sublease) or other Collateral subject thereto.

      Section 5.3 Maintenance. At all times during the term of this Lease,
Lessee shall, at its own cost and expense, keep, repair, maintain and preserve
all of the Equipment in at least as

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good order and operating and mechanical condition, repair and appearance as when
originally Accepted and Installed, ordinary wear and tear excepted, in
accordance with prudent industry practice and in a manner consistent with that
relating to similar Equipment owned or operated by Lessee and the terms of all
contracts (including, without limitation, service contracts and insurance
contracts) at the time applicable thereto, and subject to Lessee's rights under
Section 5.7 regarding Permitted Contests, in compliance with all Applicable Laws
in all material respects and Insurance Requirements, except where the failure to
comply would not reasonably be expected to cause the relevant insurance to
lapse, to be cancelled or to be reduced (as to amount or scope of coverage),
and, subject to Lessee's rights under Section 5.7 regarding Permitted Contests,
in the event that Applicable Laws or Insurance Requirements require any
alteration, replacement or addition of or to any Part of any Equipment, Lessee
will conform therewith at its own expense where the failure to comply would have
a Material Adverse Effect or cause the relevant insurance to lapse, to be
cancelled or to be reduced (as to amount or scope of coverage). In no event
shall Lessee discriminate as to the use or maintenance of any Equipment
(including the periodicity of maintenance or recordkeeping in respect of such
Equipment) as compared to equipment of a similar nature which Lessee owns or
leases. To the extent not prohibited by Applicable Laws, Lessee shall prepare
and deliver to Agent within a reasonable time prior to the required date of
filing (or, to the extent permissible, file on behalf of Agent, Lessor and the
Participants) any and all reports (other than income tax returns) to be filed by
Agent, Lessor or any Participant with any Governmental Authority or other Person
by reason of the ownership by Lessor of the Equipment or the leasing thereof to
Lessee. Lessor agrees to promptly inform Lessee of any request for such reports
received by it. Lessee shall maintain all records, logs and other materials
required by any Governmental Authority having jurisdiction over the Equipment or
Lessee to be maintained in respect of the Equipment where the failure to so
maintain would reasonably cause a Material Adverse Effect. Lessee hereby waives
any right now or hereafter conferred by Applicable Laws to make repairs on any
of the Equipment at the expense of Agent, Lessor or any Participant.

      Section 5.4 Alterations, Modifications, etc. In case any Item of Equipment
or any Part is required to be altered, added to, replaced or modified in order
to comply with any Applicable Laws in all material respects or Insurance
Requirements where the failure to so comply would reasonably be expected to
cause the relevant insurance to lapse, to be cancelled or to be reduced (as to
amount of scope of coverage) (a "Required Alteration") pursuant to Sections 5.1
or 5.3 hereof, subject to the provisions of Section 5.7 regarding Permitted
Contests, Lessee agrees to make such Required Alteration at its own expense.
Lessee shall have the right to make any modification, alteration or improvement
to any Item of Equipment (herein referred to as a "Permitted Modification"), or
to remove any Parts which have become worn out, broken or obsolete, provided in
each case that Lessee continues to be in compliance with Sections 5.1 and 5.3
hereof and that such action (a) will not decrease the economic value of such
Item of Equipment or impair its originally intended use or function or decrease
its useful life in any material respect and (b) will not cause such Item of
Equipment to become suitable for use only by Lessee unless in the case of this
clause (b) such modification is readily removable without damage to such Item of
Equipment. In the event any Permitted Modification (i) is readily removable
without in any material respect impairing the value or useful life which the
Item of Equipment would have had at such time had such Part not been affixed or
placed to or on such Item of Equipment (or if not readily removable without in
any material respect so impairing the value or useful life of

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such Item of Equipment, Lessee actually restores the value or useful life of
such Item of Equipment in all material respects to the value or useful life
which the Item of Equipment would have had at such time had such Part not been
affixed or placed to or on such Item of Equipment) (a "Removable Part"), (ii) is
not a Required Alteration and (iii) is not a Part which replaces any Part
originally incorporated or installed in or attached to such Item of Equipment on
the date on which such Item of Equipment became subject to this Lease or any
Part in replacement of or substitution for any such original Part (each an
"Original Part"), any such Permitted Modification or Original Part so removed
and replaced shall be and remain the property of Lessee. To the extent such
Permitted Modification is not a Removable Part, or is a Required Alteration or
an Original Part, the same shall immediately and automatically be and become the
property of Lessor and subject to the terms of this Lease. Any Required
Alterations and any Parts installed or replacements made by Lessee upon any Item
of Equipment pursuant to its obligation to maintain and keep the Equipment in
good order, operating condition and repair under Section 5.3 shall be
considered, in each case, accessions to such Item of Equipment and title thereto
and a security interest therein shall be immediately and automatically vested in
Lessor.

      Section 5.5 Liens. Subject to the final sentence of this Section 5.5,
Lessee will not directly or indirectly create, incur, assume or suffer to exist
any Lien (other than Permitted Liens) on or with respect to (i) any Item of
Equipment or any Part thereof or any other Collateral, Lessor's title thereto,
or any interest therein or (ii) this Lease or any of Agent's, Lessor's or any
Participant's interests hereunder. Lessee, at its own expense, will promptly
pay, satisfy and otherwise take such actions as may be necessary to keep this
Lease, each Item of Equipment and all other Collateral free and clear of, and to
duly discharge or eliminate or bond in a manner satisfactory to Agent and
Lessor, any such Lien not excepted above if the same shall arise at any time.
Lessee will notify Agent and Lessor in writing promptly upon becoming aware of
any Lien (other than any Lien excepted above) that attaches to the Equipment or
any Item of Equipment or any other Collateral, and a description of the full
particulars thereof. Without limiting the foregoing, Lessee shall not assign or
pledge any of its rights under the Sublease or any Affiliate Sublease to any
Person other than to Agent. Lessee, on its own or on Lessor's behalf but at
Lessee's sole cost and expense, may contest, by appropriate administrative or
judicial proceedings conducted in good faith and with due diligence, the amount,
validity or application, in whole or in part, of any Lien on any Item of the
Equipment or other Collateral, and Lessor agrees not to pay, settle or otherwise
compromise any such Lien, so long as such contest constitutes a Permitted
Contest.

      Section 5.6 Inspection. Upon three (or, upon the occurrence and during the
continuance of an Event of Default, one) Business Day's prior written notice by
Agent or Lessor, Lessee shall make the Equipment and all other Collateral
available to Agent and Lessor and their representatives (the "Inspecting
Parties") for inspection at reasonable times at the Facility and, if requested
in such notice, shall also make Lessee's records pertaining to the Equipment and
all other Collateral available for inspection. All such inspections shall be
during Lessee's normal business hours, shall be subject to Lessee's customary
safety and security provisions and shall be at the expense and risk of the
Inspecting Parties, except that if an Event of Default has occurred and is
continuing, Lessee shall reimburse the Inspecting Parties for the reasonable
costs of such inspections. No inspection shall unreasonably interfere with
Lessee's or any sublessee's operations. None of the Inspecting Parties shall
incur any liability or obligation by reason of making any such inspection or
inquiry unless and to the extent such Inspecting Party causes

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damage to any Person or to the Equipment or any property of Lessee or any other
Person during the course of such inspection. Provided that an Event of Default
has not occurred and is continuing, neither Lessor nor Agent shall conduct such
inspection more frequently than once in any calendar year.

      Section 5.7 Permitted Contests. If, to the extent and for so long as a
Permitted Contest in respect of any Applicable Laws, Governmental Action,
manufacturer's guidelines or standards or Insurance Requirements relating to the
Equipment, any part thereof or any other Collateral or the obligation to comply
therewith shall be prosecuted diligently and in good faith in appropriate
proceedings by the Lessee or its Affiliates, Lessee shall not be required to
comply with such Applicable Laws, Governmental Action, manufacturer's guidelines
or standards or Insurance Requirements, as the case may be. At Lessee's request,
Lessor will join in any proceedings pursuant to this Section 5.7 if and so long
as the Lessee agrees in writing to pay, and pays, all related reasonable out of
pocket expenses of Lessor and Lessee agrees that any such claim against Lessor,
Agent or any Participant relating thereto will be subject to the indemnification
provisions of Section 12.1 of the Participation Agreement.

      Section 5.8 Annual Appraisals. On or prior to each annual anniversary of
the Document Closing Date, Lessee shall deliver to Agent, Lessor and the
Participants an Annual Appraisal covering all Equipment then subject to this
Lease as to which Lessee has not theretofore exercised the Purchase Option, the
Sale Option or the Early Termination Option.

                                   ARTICLE VI

               RISK OF LOSS; INSURANCE; REPLACEMENTS OF EQUIPMENT

      Section 6.1 Casualty. If (A) any Item of Equipment shall be or become (i)
lost, stolen, destroyed, irreparably damaged from any cause whatsoever, damaged
beyond economic repair, or rendered permanently unfit for normal use for any
reason whatsoever (other than obsolescence), including by reason of any defect
in design or manufacture, in each such case in Lessee's reasonable
determination, which determination shall be made promptly after any such event
or Lessee's discovery thereof (including notification by any sublessee, as
applicable), or (ii) damaged so as to result in an insurance settlement on the
basis of a total loss or a constructive or compromised total loss, or (iii)
captured, confiscated or requisitioned by condemnation or otherwise and the loss
shall have resulted in loss of possession of such Item of Equipment by Lessee
for a period of more than 180 consecutive days, or (B) as a result of any rule,
regulation, order or other action of any Governmental Authority having
jurisdiction, the use in normal operation of such Item of Equipment shall have
been prohibited for a period extending beyond the Lease Term applicable to such
Item of Equipment (any such occurrence being hereinafter called a "Casualty"),
prior to or during the term of this Lease, Lessee shall give Agent and Lessor
notice thereof (a "Casualty Notice") not later than thirty (30) days (or, with
respect to a Casualty referred to in clause (ii) of the definition of such term,
such longer period as Lessee may request, not to exceed one hundred nineteen
(119) days), following a Responsible Officer of Lessee becoming aware of the
occurrence of such Casualty. The Casualty Notice shall specify whether Lessee
will:

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      (a) pay the Casualty Amount of the Item of Equipment suffering such
Casualty, which payment shall be made no later than ninety (90) days (unless
Lessee has delivered a Casualty Notice with respect to a Casualty referred to in
clause (ii) of the definition of such term after the expiration of such thirty
(30) day period, no later than the date which is one hundred twenty (120) days
following a Responsible Officer of Lessee becoming aware of the occurrence of
such Casualty) following the date of such Casualty Notice (the "Casualty
Settlement Date"), provided that in any event the Casualty Settlement Date shall
be no later than the last day of the Lease Term applicable to such Equipment;
and the Casualty Amount shall be applied by Agent to reduce the relevant Lease
Supplement Balance as indicated below; or

      (b) replace the Item of Equipment with respect to which the Casualty has
occurred pursuant to the following provisions of this Section 6.1 and Section
6.4, provided that upon the occurrence and during the continuance of an Event of
Default, Lessee shall be obligated, at the option of the Required Participants,
to make the payments referred to in clause (a) above and shall not be entitled
to exercise any right or election of replacement as set forth in this clause
(b).(c)

      If Lessee has elected, or is required, to pay the Casualty Amount pursuant
to clause (a) above, Lessee shall continue to make all payments of Basic Rent
due under this Lease without reduction for the Item of Equipment suffering such
Casualty until such Casualty Amount is paid, upon which event Lessee's
obligation to pay Basic Rent for the Item of Equipment suffering such Casualty
shall cease. Upon payment of the Casualty Amount in respect of any Item of
Equipment suffering a Casualty, the amount of the Lease Supplement Balance shall
be reduced by an amount equal to the product of the remaining relevant Lease
Supplement Balance (determined prior to the receipt of such Casualty Amount),
multiplied by the Allocation Fraction of the Item of Equipment suffering such
Casualty.

      If Lessee has given notice that it intends to replace the Item of
Equipment suffering such Casualty, and such replacement is permitted under the
foregoing clause (b), Lessee may, not more than ninety (90) days after the date
of such Casualty Notice, replace the Item of Equipment suffering the Casualty
with Replacement Equipment pursuant to the requirements of Section 6.4.

      If Lessee has paid the amount payable with respect to the Casualty as set
forth in clause (a) above and all other amounts due hereunder and no Event of
Default has occurred and is continuing, Lessee shall be entitled to receive, and
Lessor shall direct the applicable insurance carrier to pay, or if received by
Lessor shall pay, to Lessee the proceeds of any recovery in respect of such Item
of Equipment from insurance or otherwise ("Casualty Recoveries"), and Lessor,
subject to the rights of any insurer insuring such Item of Equipment as provided
herein, shall execute and deliver to Lessee, or to its assignee or nominee, a
quitclaim bill of sale (without representations or warranties except that such
Item of Equipment is free and clear of all Lessor Liens) for such Item of
Equipment, and such other documents as may be required to release the Equipment
from the terms of this Lease, in such form as may reasonably be requested by
Lessee. All fees, costs and expenses relating to a substitution as described
herein shall be borne by Lessee.

      Any payments (including, without limitation, insurance proceeds) received
at any time by Agent, Lessor or Lessee from any Governmental Authority or other
party with respect to any loss

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or damage to any Item of Equipment not constituting a Casualty will be paid to
Lessee to be applied directly in payment of repairs or for replacement of
property in accordance with the provisions of Sections 5.1 and 5.3, if not
already paid by Lessee, or if already paid by Lessee and no Event of Default
shall have occurred and be continuing, shall be applied to reimburse Lessee for
such payment, and any balance remaining after compliance with said Sections with
respect to such loss or damage shall be retained by Lessee. During the existence
of a Default, or any Event of Default, any payments received by Agent or Lessor
with respect to any loss or damage to any item of Equipment (whether or not
constituting a Casualty) shall be held by Agent as security for the obligations
of Lessee under this Lease, and at such time as there shall not be continuing
any such Event of Default or Default, such amount (unless theretofore otherwise
applied to the obligations of Lessee hereunder in accordance with Section 8.4)
shall be applied to pay the Casualty Amount of the applicable Item of Equipment
if Lessee has elected, or is required, to pay such Casualty Amount or paid over
to Lessee. Any such payments received by Lessor in excess of the costs of repair
or replacement of the applicable Item of Equipment not required to be held by
Agent pursuant to the preceding sentence or if so held when released shall be
and remain the property of Lessee.

      LESSEE HEREBY ASSUMES ALL RISK OF LOSS, DAMAGE, THEFT, TAKING,
DESTRUCTION, CONFISCATION, REQUISITION, COMMANDEERING, TAKING BY EMINENT DOMAIN
OR CONDEMNATION, PARTIAL OR COMPLETE, OF OR TO ANY OF THE EQUIPMENT, HOWEVER
CAUSED OR OCCASIONED, SUCH RISK TO BE BORNE BY LESSEE WITH RESPECT TO EACH ITEM
OF EQUIPMENT FROM THE DATE OF THIS LEASE, AND CONTINUING UNTIL SUCH ITEM OF
EQUIPMENT HAS BEEN RETURNED TO LESSOR IN ACCORDANCE WITH THE PROVISIONS OF
ARTICLE IX. LESSEE AGREES THAT NO OCCURRENCE SPECIFIED IN THE PRECEDING SENTENCE
SHALL IMPAIR, IN WHOLE OR IN PART, ANY OBLIGATION OF LESSEE UNDER THIS LEASE,
INCLUDING, WITHOUT LIMITATION, THE OBLIGATION TO MAKE PAYMENTS.

      Section 6.2 Insurance Coverages. Lessee shall at all times, at its
expense, cause to be carried and maintained (a) commercial general liability
insurance with respect to the Equipment against third party personal injury and
property damage in an amount as of each Lease Supplement Closing Date and at all
times thereafter of not less than $50,000,000 per occurrence, including fire,
flood and environmental insurance, (b) property insurance in respect of the
Equipment at the time leased hereunder, said property insurance to be in amounts
at least equal at all times to the replacement cost of the Equipment then
subject to this Lease, and (c) such other insurance, including worker's
compensation and business interruption insurance, in each case, as is consistent
with prudent industry practice and as generally carried by corporations of
established reputation engaged in the same or similar business as Lessee.

      Such insurance shall be written by reputable insurance companies that are
financially sound and solvent and otherwise reasonably appropriate considering
the amount and type of insurance being provided by such companies. Any insurance
company selected by Lessee and writing such required insurance shall be rated in
A.M. Best's Insurance Guide or any successor thereto (or if there be none, an
organization having a similar national reputation) and shall have a general
financial rating of "A" (or comparable rating for a rating by an organization
other than A.M. Best) and a financial rating of at least "X" (or comparable
rating for a rating by an

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organization other than A.M. Best) or be otherwise acceptable to Agent and
Lessor. In the case of liability insurance maintained by Lessee, it shall name
Agent and Lessor (in each case, in its individual capacity and as Agent or
Lessor, as applicable) and each of the Participants as additional insureds and,
in the case of property insurance maintained by Lessee, it shall name Agent and
Lessor as loss payees to the extent of their and the Participants' interests in
the Equipment. Each policy referred to in this Section 6.2 shall provide that:
(i) it will not be cancelled, materially modified or its limits reduced, or
allowed to lapse without renewal, except after not less than (x) 10 days' prior
written notice to Agent and Lessor, in the case of a cancellation or non-renewal
due to non-payment, or (y) 30 days' prior written notice to Agent and Lessor, in
all other cases; (ii) the interests of Agent and Lessor and any Participant
shall not be invalidated by any act or negligence of or breach of warranty or
representation by Lessee or any Person having an interest in the Equipment;
(iii) such insurance is primary with respect to any other insurance carried by
or available to Agent and Lessor or any Participant; (iv) the insurer shall
waive any right of subrogation, setoff, counterclaim, or other deduction,
whether by attachment or otherwise, against Agent and Lessor and the
Participants; and (v) such policy shall contain a cross-liability clause
providing for coverage of Agent and Lessor and each Participant, as if separate
policies had been issued to each of them. Lessee will notify Agent and Lessor
promptly of any policy cancellation, expiration, reduction in policy limits,
modification or amendment. Lessee hereby waives, releases and discharges Agent,
Lessor and each Participant and their agents and employees from all claims
whatsoever arising out of loss, claim, expense or damage to or destruction
covered or coverable by insurance required under this Article VI notwithstanding
that such loss, claim, expense or damage may have been caused by Agent, Lessor
or any Participant or any of their agents or employees, and Lessee agrees to
look solely to the insurance coverage in the event of such loss.

      Section 6.3 Delivery of Insurance Certificates. On or before the initial
Lease Supplement Closing Date and each subsequent Lease Supplement Closing Date,
Lessee shall deliver to Agent and Lessor certificates of insurance satisfactory
to Agent and Lessor evidencing the existence of all insurance required to be
maintained hereunder and setting forth the respective coverages, limits of
liability, carrier, policy number and period of coverage. Thereafter, throughout
the Lease Terms, at the time each of Lessee's insurance policies is renewed or
replaced (but in no event less frequently than once each year and in all cases
not less than fifteen (15) days prior to the expiration date of any policy) or
upon written request by Agent or Lessor following and during the continuance of
an Event of Default, Lessee shall deliver to Agent and Lessor certificates of
insurance evidencing that all insurance then required by Section 6.2 to be
maintained by Lessee is in effect. The insurance coverage herein required may be
subject to deductibles or self-insured retentions up to an amount not in excess
of (i) $1,000,000 in respect of property insurance, (ii) $100,000 in respect of
liability insurance, (iii) $200,000 per individual and $800,000 maximum for
workers' compensation insurance and (iv) damage arising from 48 hours of
cessation of operations in respect of business interruption insurance. Such
coverage may be provided in a combination of umbrella and excess liability
policies.

      Section 6.4 Replacement and Substitution. During the applicable Lease Term
and provided that no Event of Default exists and Lessee has not elected or is
not deemed to have elected an option under Section 10.1, 10.2 or Section 11.1(b)
or (c) with respect to the Item of

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Equipment to be replaced or substituted, Lessee may replace or substitute such
Item of Equipment ("Replaced Equipment") with Replacement Equipment subject to
Lessee's satisfaction of each of the following conditions:

      (a) Lessee shall have delivered to Agent and Lessor a written notice (the
"Replacement Notice") indicating the date such replacement or substitution is to
take place (which date shall be (i) in respect of a voluntary replacement or
substitution, not more than 90 days following the date of the Replacement Notice
or (ii) in the case of a replacement or substitution on account of a Casualty,
not later than the date provided for in the applicable Casualty Notice, which
Casualty Notice shall serve as the Replacement Notice with respect to such
Casualty, which shall identify the Replacement Equipment, the Purchase Price for
the Replacement Equipment, and the Replaced Equipment;

      (b) Lessee shall have delivered to Agent and Lessor evidence satisfactory
to Agent and Lessor (i) of Lessee's compliance with the insurance provisions of
Section 6.2 with respect to the Replacement Equipment, (ii) of Lessee's payment
in full of the Purchase Price and all Installation Expenses of the Replacement
Equipment, and (iii) that the Item of Equipment to serve as the Replacement
Equipment satisfies the requirements set forth in the definition of "Replacement
Equipment";

      (c) Lessee shall cause a Bill of Sale and an amendment to the relevant
Lease Supplement and UCC financing statements as detailed on Schedule 6.1(f) of
the Participation Agreement to be executed and delivered to Lessor in order to
subject such Replacement Equipment to this Lease; and

      (d) Such Replacement Equipment shall be the same make, model and year of
manufacture as the Replaced Equipment or Lessee shall have delivered to Agent
and Lessor an Appraisal of the Replacement Equipment showing both (i) the
then-current Fair Market Value thereof, and (ii) the Fair Market Value thereof
as of the then-current Expiration Date with respect to the Replaced Equipment
and on each date on which a Renewal Term with respect thereto would expire, in
each case greater than or equal to such values at such dates for the Replaced
Equipment.

      Upon the satisfaction by Lessee of the foregoing conditions, Lessor shall,
subject to the rights of any insurer insuring Replaced Equipment suffering a
casualty, if applicable, execute and deliver to Lessee, or to its assigns or a
nominee, a quitclaim bill of sale (without representations or warranties, except
that the Replaced Equipment is free and clear of all Lessor Liens) for the
Replaced Equipment and such other documents as may be required to release the
Replaced Equipment from the terms of this Lease and the Security Documents, in
such form as may reasonably be requested by Lessee.

                                  ARTICLE VII

                                   WARRANTIES

      LESSEE ACKNOWLEDGES AND AGREES THAT: (a) ALL OF THE EQUIPMENT IS LEASED
AS-IS AND WHERE-IS; (b) ALL OF THE EQUIPMENT LEASED BY IT IS OF

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A SIZE, DESIGN, SPECIFICATION AND MANUFACTURE SELECTED BY LESSEE; (c) LESSEE IS
SATISFIED THAT THE SAME IS SUITABLE FOR ITS PURPOSES; (d) LESSOR IS NOT A
MANUFACTURER THEREOF OR A DEALER IN PROPERTY OF SUCH KIND; AND (e) LESSOR HAS
NOT MADE NOR SHALL IT BE DEEMED TO HAVE MADE: (i) ANY REPRESENTATION OR WARRANTY
OR COVENANT WITH RESPECT TO THE TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, CONDITION, QUALITY, DESCRIPTION, DURABILITY OR SUITABILITY OF ANY OF
THE EQUIPMENT IN ANY RESPECT OR IN CONNECTION WITH OR FOR THE PURPOSES AND USES
OF LESSEE; OR (ii) ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR
IMPLIED, WITH RESPECT TO ANY OF THE EQUIPMENT.

                                  ARTICLE VIII

                           EVENTS OF DEFAULT; REMEDIES

      Section 8.1 Events of Default. The occurrence of any of the following
shall constitute an event of default (each an "Event of Default") hereunder
(whether any such event shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Authority):

            (a) (i) any payment of Rent, Lease Supplement Balance or Lease
Balance (other than a Renewal Payment or other payment due on an Expiration
Date) payable by Lessee shall not be paid when due, and, such payment shall be
overdue for a period of five (5) Business Days, (ii) any payment payable by
Lessee on an Expiration Date, including any Renewal Payment or any payment
described at Section 10.2 or Article XI hereof or Section 12.2 of the
Participation Agreement, shall not be paid when due or (iii) Lessee shall fail
to make payment of any Supplemental Rent (other than Supplemental Rent referred
to in clause (i) or (ii) of this Section 8.1(a)) due and payable within ten (10)
Business Days after receipt of written notice thereof; or

            (b) Any representation or warranty of Lessee contained in any
Operative Document, or in any certificate, report, financial statement or in
other document required to be furnished or delivered pursuant to any Operative
Documents by Lessee or on Lessee's behalf to any Participant or Agent or Lessor
is false or misleading in any material respect when made or reaffirmed, as the
case may be and, if capable of being cured, remains uncured for thirty (30) days
after the earlier of (i) receipt by Lessee of notice thereof and (ii) a
Responsible Officer of Lessee obtaining knowledge thereof; or

            (c) Lessee shall default in the performance or observance of any
term, covenant, condition or agreement on its part to be performed or observed
under Sections 8.1(d), (j) or (n) of the Participation Agreement; or

            (d) Lessee shall default in any material respect in the performance
or observance of (i) any term, covenant, condition or agreement on its part to
be performed or

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observed under Sections 8.1(k), (l), (m), (o), (p), (q) or (t) of the
Participation Agreement or (ii) any other term, covenant, condition or agreement
on its part to be performed or observed hereunder or under any other Operative
Document (and not constituting an Event of Default under any other clause of
this Section 8.1), and such default, in the case of either clause (i) or clause
(ii) above, if capable of being remedied, shall continue unremedied for a period
of thirty (30) days after the earlier to occur of (x) written notice thereof by
Agent or Lessor to Lessee or (y) a Responsible Officer of Lessee obtaining
knowledge thereof (provided that, upon notice from Lessee to Lessor, if such
failure referred to in clause (ii) of this Section 8.1(d) is not reasonably
capable of being cured during such 30-day period, such period shall be extended
for a total period of 180 days so long as (i) such failure is subject to cure
during such 180-day period and (ii) Lessee is diligently and continuously
proceeding to cure or cause to be cured such failure); or

            (e) (i) Lessee shall commence a voluntary case concerning itself
under the Bankruptcy Code; or (ii) an involuntary case is commenced against
Lessee and the petition remains unstayed and in effect for more than sixty (60)
days, or is not dismissed within sixty (60) days, after commencement of the
case; or (iii) a custodian (as defined in the Bankruptcy Code) is appointed for,
or takes charge of, all or substantially all of the property of Lessee or Lessee
commences any other proceedings under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction whether now or hereafter in effect relating to
Lessee or there is commenced against Lessee any such proceeding which remains
undismissed for a period of sixty (60) days; or (iv) any order of relief is
entered in any such case or proceeding; or (v) Lessee is adjudicated insolvent
or bankrupt or (vi) Lessee suffers any appointment of any custodian or the like
for it or any substantial part of its property to continue undischarged or
unstayed for a period of sixty (60) days; or (vii) Lessee makes a general
assignment for the benefit of creditors; or (viii) Lessee shall fail to pay, or
shall state that it is unable to pay its debts generally as they become due; or
(ix) Lessee shall consent to, or approve in writing any of the foregoing; or (x)
any limited liability company action is taken by Lessee for the purpose of
effecting any of the foregoing; or

            (f) (i) Lessee shall default in the payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) of
any amount owing in respect of any Indebtedness in the principal amount of [*]
or more; or Lessee shall default in the performance or observance of any
obligation or condition with respect to any Indebtedness or any other event
shall occur or condition exist, if the effect of such default, event or
condition is to accelerate the maturity of any such Indebtedness or to permit
the holder or holders thereof, or any trustee or agent for such holders, to
accelerate the maturity of any such Indebtedness, or any such Indebtedness shall
become or be declared to be due and payable prior to its stated maturity other
than as a result of a regularly scheduled payment, and the principal amount of
such Indebtedness is [*] or more, but excluding, except as described in clause
(ii) below, any breach or default under the FlashVision/Toshiba Tranche
Operative Documents; or (ii) any Event of Default shall occur under the Flash
Vision/Toshiba Tranche Operative Documents, other than a Guarantee Event of
Default (as defined therein); or

            (g) any ERISA Event which constitutes grounds for the termination of
any Pension Plan by the PBGC or for the appointment of a trustee by the PBGC to
administer any

[*] INDICATES THAT CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
    FILED SEPARATELY WITH THE COMMISSION PURSUANT TO RULE 24B-2. CONFIDENTIAL
    TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

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Pension Plan shall occur, or any Pension Plan shall be terminated within the
meaning of Title IV of ERISA or a trustee shall be appointed by the PBGC to
administer any Pension Plan;

            (h) One or more judgments or decrees in an aggregate amount of
$20,000,000 or more, to the extent not paid by insurance or coverage thereof has
not been acknowledged in writing by the applicable insurer, shall be entered by
a court against Lessee and any such judgments or decrees shall not be stayed,
discharged, paid, bonded or vacated within 30 days; or

            (i) Lessee fails to maintain the insurance coverages required under
Section 6.2; or

            (j) any Guarantee Event of Default shall occur and be continuing; or

            (k) Lessee shall have elected the Sale Option with respect to any
Lease Supplement and shall have failed to comply with the return conditions set
forth in Section 11.3; or

            (l) any Master Agreement Event of Default shall have occurred and
such event of default, if capable of being remedied, shall continue unremedied
for a period of thirty (30) days after the earlier to occur of (i) written
notice thereof by Agent or Lessor to Lessee and Guarantor, or (ii) a Responsible
Officer of Guarantor obtaining knowledge thereof; or

            (m) (i) Lessee shall have been dissolved (x) voluntarily by the
Members pursuant to Section 11.01(b) of the Operating Agreement or (y) as a
result of a default by a Member pursuant to Section 11.01(c) of the Operating
Agreement, or (z) as a result of a "Deadlock" pursuant to Section 11.01(d) of
the Operating Agreement; (ii) Guarantor shall sell, transfer or convey any of
its equity interest in Lessee to any Person, other than to an Affiliate of
Guarantor that is controlled by Guarantor; (iii) upon the occurrence of the
Termination Date (as defined in Section 11.04 of the Operating Agreement), in
the event Guarantor elects the Unilateral Option under Section 11.04
(Dissolution by Unilateral Option) of the Operating Agreement, unless prior to
such Termination Date (A) Toshiba restructures the Operative Documents to take
into consideration Toshiba's assumption of Guarantor's obligations under the
Guarantee, which may include a repricing of the transaction covered thereby, (B)
Toshiba provides a guarantee of Lessee's obligations under the Operative
Documents in form substantially similar to the Guarantee (in which case the
Guarantee shall be deemed released) and (C) Lessee or its designee under the
Operative Documents exercises its Early Termination Option under Section 10.1 of
the Lease with respect to all of the Equipment subject to the Lease and pays in
full the amounts due under such Section 10.1 of the Lease; or

            (n) (i) Guarantor shall fail to own and control at least 49.9% of
the Membership Interests in Lessee unless such failure is due to a circumstance
not constituting an Event of Default under Section 8.1(m); or (ii) Toshiba shall
fail to own and control at least 50% of the Membership Interests in Lessee
unless such failure is due to a circumstance not constituting an Event of
Default under, or otherwise is permitted pursuant to the terms of, Section
8.1(m) or Section 8.1(m) of the Toshiba Lease.

      Section 8.2 Remedies. If any Event of Default exists, Lessor shall have
the rights, options and remedies of a secured party under the UCC (regardless of
whether the UCC or a law

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similar thereto has been enacted in a jurisdiction wherein the rights or
remedies are asserted) and all other Applicable Laws, and, without limiting the
foregoing, Lessor also may exercise in any order one or more or all of the
following remedies (it being understood that no remedy herein conferred is
intended to be exclusive of any other remedy or remedies, but each and every
remedy shall be cumulative and shall be in addition to every other remedy given
herein or now or hereafter existing at law or in equity or by statute): (i)
terminate this Lease by notice in writing to Lessee, but Lessee shall remain
liable as hereinafter provided; (ii) declare the entire outstanding Lease
Balance to be due and payable, together with accrued unpaid Rent and any other
amounts payable under the Operative Documents; (iii) enforce the security
interest given hereunder pursuant to the UCC or any other law; (iv) enter upon
the premises where any of the Collateral may be and take possession of all or
any of such Collateral; (v) proceed by appropriate court action or actions
either at law or in equity, to enforce performance by Lessee of the applicable
covenants of this Lease or to recover damages for the breach thereof; and (vi)
require Lessee to assemble and return the Equipment and other Collateral as
provided in Section 9.1. Notwithstanding the foregoing, Lessor's rights under
this Section 8.2 and 8.3 shall be subject to Lessee's rights to purchase all of
the Equipment pursuant to Section 10.1, but in any such case within the time
periods provided for in Section 8.7, to the extent applicable.

      Notwithstanding the foregoing, if any Event of Default described in
Section 8.1(e) shall have occurred and be continuing, then the entire
outstanding Lease Balance and all accrued Rent and other amounts payable under
the Operative Documents shall automatically and immediately become due and
payable, without presentment, demand, notice, declaration, protest or other
requirements of any kind, all of which are hereby expressly waived and, upon
payment of such amounts, Lessor and Agent shall transfer title to the Equipment
to Lessee free and clear of Lessor Liens or any Liens described in clause (a) of
the definition of Permitted Liens in the manner required under Section 10.1.

      Section 8.3 Sale of Collateral. Subject to Section 8.7, in addition to the
remedies set forth in Section 8.2 and to the extent permitted by Applicable
Laws, if any Event of Default shall occur, Lessor may, but is not required to,
sell the Collateral in one or more sales. Any Participant, Agent or Lessor may
purchase all or any part of the Collateral at such sale. Lessee acknowledges
that sales for cash or on credit to a wholesaler, retailer or user of such
Collateral, or at public or private auction, are all commercially reasonable.
Any notice required by law of intended disposition by Lessor shall be deemed
reasonably and properly given if given at least ten (10) days before such
disposition.

      Section 8.4 Application of Proceeds. The proceeds of such sale or exercise
of other remedies shall be applied in the manner set forth in Section 5.3 of the
Participation Agreement.

      Section 8.5 Right to Perform Obligations. If an Event of Default exists,
Lessor may, but shall not be obligated to, on ten (10) Business Days' notice to
Lessee (or at least one (1) Business Day's, notice, if, in the reasonable
judgment of Lessor an emergency exists or at least three (3) Business Days'
notice, if in the reasonable judgment of Lessor there exists a condition which
Lessee has failed to address pursuant to the terms of the Lease which if not
remedied would have a Material Adverse Effect), remedy such condition, and the
fees and expenses incurred by Lessor in connection with such performance
together with interest thereon shall be payable by Lessee within ten (10) days
of written demand. Interest on fees and expenses so

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incurred by Lessor shall accrue at the Overdue Rate as provided in Section 4.5
from the date payment by Lessee for such fees and expenses is due hereunder
until paid in full.

      Section 8.6 Power of Attorney. Lessee unconditionally and irrevocably
appoints Lessor as its true and lawful attorney-in-fact, with full power of
substitution, to the extent permitted by Applicable Laws, in its name and stead
and on its behalf, for the purpose of effectuating any sale, assignment,
transfer or delivery hereunder, if an Event of Default exists, whether pursuant
to foreclosure or power of sale or otherwise, and in connection therewith to
execute and deliver all such deeds, bills of sale, assignments, releases
(including releases of this Lease on the records of any Governmental Authority)
and other proper instruments as Lessor may reasonably consider necessary or
appropriate. Lessee ratifies and confirms all that such attorney or any
substitute shall lawfully do by virtue hereof in accordance with the terms
hereof. If requested by Lessor or any purchaser, Lessee shall ratify and confirm
any such lawful sale, assignment, transfer or delivery by executing and
delivering to Lessor or such purchaser, all deeds, bills of sale, assignments,
releases and other proper instruments to effect such ratification and
confirmation as may be designated in any such request.

      Section 8.7 Lessee Purchase Following Event of Default.

      (a) At any time after the occurrence and during the continuance of an
Event of Default Lessor may give Lessee notice that Lessee's Purchase Option or
Early Termination Option shall terminate unless exercised and consummated within
thirty (30) days of the date of such notice is given. Lessee may exercise (which
exercise shall be irrevocable) and consummate the purchase of all, but not less
than all, of the Equipment during such thirty (30) day period by paying the
amounts required under Sections 10.1 or 11.1(b), together with (without
duplication) all other amounts then due and payable by Lessee pursuant to this
Lease and the other Operative Documents.

      (b) Guarantor and/or Toshiba may exercise directly the right to purchase
the Equipment under Section 10.1 upon such conditions and at such times as set
forth in a written notice to Lessor and Agent executed by each of Lessee,
Guarantor and Toshiba.

                                   ARTICLE IX

                               RETURN OF EQUIPMENT

      Section 9.1 Return of Equipment.

            (a) If Lessor has terminated this Lease pursuant to Article VIII,
and Lessee has not purchased the Equipment pursuant to Section 10.2, or if
Lessee has exercised the Sale Option with respect to any Equipment, Lessee shall
(i) for a period of up to one year after the applicable Expiration Date or the
date of such termination, as the case may be, maintain (or cause to be
maintained) the applicable Equipment in the condition required by Section 5.3,
store such Equipment without cost to Lessor, Agent or any Participant, and keep
all of such Equipment insured in accordance with Article VI, and (ii) upon
Lessor's or Agent's request following the applicable Expiration Date or such
termination forthwith deliver exclusive

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possession of such Equipment to Lessor or a purchaser of the Equipment at a
location designated by Lessor within the continental United States, together
with a copy of an inventory list of such Equipment, all operating, maintenance
and repair manuals relating to such Equipment and subject to applicable
confidentiality requirements, if any, that have been received or prepared by
Lessee (in condition to be placed in immediate service), and, at Lessee's cost
and expense, remove any Permitted Modifications if permitted by clause (b) of
Section 5.4.

            (b) In connection with the delivery of any Equipment required to be
made to Lessor or any purchaser under Section 9.1(a)(ii), Lessee shall, at its
sole cost and expense:

                  (i) properly remove all markings on such Equipment made by
            Lessee which are not necessary for the operation, maintenance or
            repair of such Equipment or required by the manufacturer, Applicable
            Law or Insurance Requirements;

                  (ii) at least ninety (90) days prior to the Expiration Date of
            the Lease Supplement to which such Equipment is subject, or, in the
            case of a termination of this Lease pursuant to Article VIII,
            promptly after such termination, cause a supplier's representative
            or qualified maintenance provider reasonably acceptable to Agent to
            perform a comprehensive inspection, examination and test of such
            Equipment and provide a comprehensive report which certifies that
            such Equipment is operating within the applicable supplier's
            specifications or if during such inspection, examination and test,
            the authorized inspector finds such Equipment not operating within
            the supplier's specifications, then Lessee shall repair or replace
            such defective Equipment in accordance with this Lease and, after
            corrective measures are completed, Lessee will provide for a
            follow-up inspection and report of such Equipment by the authorized
            inspector;

                  (iii) if such Equipment is not to be operated in place
            pursuant to the Sublease or an Affiliate Sublease, provide for such
            Equipment to be completely de-installed and severed from the
            Facility or any other real property to which attached by a
            supplier's representative or maintenance provider reasonably
            acceptable to Agent in accordance with the supplier's
            recommendations and repair any and all damage caused to such
            Equipment by such severance;

                  (iv) if such Equipment is not to be operated in place pursuant
            to the Sublease or an Affiliate Sublease, pack such Equipment
            properly for shipment and arrange for the shipment thereof to any
            location within the continental United States specified by Lessor
            (or any purchaser) in a manner consistent with the supplier's
            recommendations; and

                  (v) if requested by Lessor or Agent (or any purchaser), such
            delivery shall include the assignment by Lessee to Lessor (or any
            purchaser) of any Related Agreements subject to applicable contract
            provisions and applicable confidentiality requirements, if any and,
            to the extent permitted by Applicable Law and otherwise
            transferable, any Related Permits necessary for the use, operation
            or maintenance of such Equipment.

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            (c) This Article IX shall survive termination of this Lease.

                                   ARTICLE X

                                EARLY TERMINATION

      Section 10.1 Early Termination. If Lessee has not previously elected the
Sale Option with respect to any Lease Supplement, Lessee may, at its option,
upon at least thirty (30) days' advance written notice to Agent and Lessor,
purchase all, but not less than all, of the Equipment and Related Property
subject to this Lease ("Early Termination Option") for the sum of (i) all
accrued and unpaid Rent payable through the date of such purchase, (ii) the
outstanding Lease Balance after giving effect to any payment under clause (i),
and (iii) all other fees and expenses and other amounts then due and payable
pursuant to this Lease and the other Operative Documents (including any Break
Costs to the extent such payment is not made on a scheduled Payment Date). Upon
the indefeasible payment of such sums by Lessee in accordance with the
provisions of the preceding sentence, the obligation of Lessee to pay Rent
hereunder (other than Rent expressly surviving the termination of this Lease,
including payments pursuant to Article XII of the Participation Agreement) shall
cease, the term of this Lease with respect to all Lease Supplements shall end on
the date of such payment and Lessor and Agent, on behalf of the Participants,
shall as promptly as practicable execute and deliver to Lessee such documents as
may be reasonably required to release the Equipment and Related Property and
other Collateral from the terms and scope of this Lease and the other Operative
Documents (without representations or warranties, except that the Collateral is
free and clear of Lessor Liens), including quitclaim bills of sale, UCC
termination statements, lease termination agreements and an assignment of any
right of Lessor to any Related Property, if any, or the benefits thereof, in
such form as may be reasonably requested by Lessee, all at Lessee's sole cost
and expense.

      Section 10.2 Required Termination. In the event that (a) any Operative
Document to which Lessee or Guarantor is a party or the security interest
granted under this Lease or any other Operative Document shall (except in
accordance with its or their terms), in whole or in part, terminate, cease to be
effective or cease to be the legally valid, binding and enforceable obligation
of Lessee or Guarantor, as applicable, (b) Lessee or any of its Affiliates
shall, directly or indirectly, contest in any manner in any court the
effectiveness, validity, binding nature or enforceability of any Operative
Document, (c) the security interest in the Collateral securing Lessee's or
Guarantor's obligations shall, in whole or in part, cease to be a perfected
first priority security interest (subject to Permitted Liens), (d) there exists
an Event of Default, (e) Lessee shall have abandoned or constructively abandoned
all or any material portion of the Equipment for a period of 30 consecutive days
which results in the Equipment not being properly maintained in accordance with
the terms of this Lease or (f) Equipment with a Fair Market Value in excess of
thirty percent (30%) of the Aggregate Purchase Price of all of the Equipment
then subject to this Lease shall have suffered and shall be subject at such time
to a Casualty, Lessee shall, upon notice from Agent, Lessor or the Required
Participants (except in the case of an Event of Default set forth in Section
8.1(e), in which case no notice shall be required and such purchase shall be
made promptly upon such Event of Default, and except in the case of an event
described in clause (c) that occurs as a result of Lessor's or Agent's acts or
omissions, in which case Lessee shall have a thirty (30) day period from the
receipt of notice from Lessor or Agent of

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such occurrence to cure such lapsed perfection), repurchase all of the Equipment
and Related Property by paying to Agent, for the benefit of Lessor and the
Participants, all amounts that would have been payable on the date of such
repurchase if Lessee had purchased all of the Equipment and Related Property on
such date pursuant to Section 10.1, such payment to be made not later than
thirty (30) days following such notice or Event of Default, or in the case of a
Casualty described in clause (f), within the period provided for in Section
6.1(a).

                                   ARTICLE XI

                                LEASE TERMINATION

      Section 11.1 Lessee's Options. Not later than 180 days prior to the
Expiration Date then in effect with respect to any Lease Supplement, Lessee
shall, by delivery of written notice to Agent and Lessor, exercise one of the
following options, subject to the requirements and limitations of Section 11.2:

            (a) elect to renew this Lease with respect to all, but not less than
all, of the Lease Supplement Equipment then subject to such Lease Supplement
(the "Renewal Option") with respect to the applicable Base Term or applicable
Renewal Term then in effect, for a renewal term commencing on the last day of
the applicable Base Term or applicable Renewal Term then in effect and expiring
on the one year anniversary thereof (each, a "Renewal Term") provided, that (i)
such option shall be exercised only with respect to the applicable Base Term or
applicable Renewal Term then in effect with respect to such Lease Supplement,
(ii) in connection with the exercise of the Renewal Option with respect to a
Lease Supplement, Lessee shall have theretofore provided Agent, Lessor and the
Participants with an Annual Appraisal required pursuant to Section 5.8 of this
Lease as of the most recent anniversary of the Document Closing Date and (iii)
notwithstanding the foregoing, in no event shall any Renewal Term in respect of
any Lease Supplement extend beyond the date which is five (5) years following
the Document Closing Date unless such additional Renewal Term has been approved
pursuant to Section 14.18 of the Participation Agreement; or

            (b) purchase all, but not less than all, of such Lease Supplement
Equipment for cash for the Option Exercise Amount on such Expiration Date (such
option being referred to as the "Purchase Option"); or

            (c) sell on such Expiration Date all, but not less than all, of such
Lease Supplement Equipment on behalf of the Participants for cash to a purchaser
or purchasers not in any way affiliated with Lessee (the "Sale Option").
Simultaneously with a sale pursuant to a Sale Option, Lessee shall pay or cause
to be paid to Lessor on the last day of the applicable Lease Term (i) all
accrued Basic Rent and any Supplemental Rent then due and payable with respect
to such Lease Supplement and the Casualty Amount of any Item of such Lease
Supplement Equipment theretofore suffering a Casualty as to which the Casualty
Amount was not paid under Section 6.1, (ii) as Supplemental Rent for the benefit
of the Participants, an amount equal to the Residual Value Guarantee Amount then
in effect with respect to such Lease Supplement, determined after giving effect
to the payment of any amount required under clause (i) and (iii) all of the
Proceeds of such sale. Lessor shall refund to Lessee the portion of the

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Proceeds in excess of the relevant Lease Supplement Balance (as determined
following the application of such Residual Value Guarantee Amount paid by Lessee
and all amounts paid pursuant to clause (i) above), if any, as promptly as
practicable following the receipt by Lessor of the foregoing payments. Lessee
agrees, however, that the amount payable pursuant to this Section 11.1(c) shall
in no event be construed to limit any obligation of Lessee under Article XII of
the Participation Agreement and Sections 11.3 and 11.4 of this Lease. The
obligation of Lessee to pay the amounts determined pursuant to clauses (i) and
(ii) of this Section 11.1(c) and Sections 11.3 and 11.4 shall be recourse
obligations of Lessee and shall be payable on the applicable Expiration Date.
All amounts paid to Lessor pursuant to this Section 11.1(c) and any Proceeds to
be retained by Lessor shall be distributed to the Participants in accordance
with Section 5.3 of the Participation Agreement.

            Section 11.2 Election of Options. Lessee's election of a Purchase
Option will be irrevocable at the time made, but if Lessee fails to make a
timely election under Section 11.1, Lessee will be deemed to have irrevocably
elected the Renewal Option, and if the Renewal Option is not available, Lessee
shall be deemed to have irrevocably elected the Purchase Option. Lessee shall be
deemed to have elected the Purchase Option with respect to a Lease Supplement if
it fails to sell all of the applicable Lease Supplement Equipment on the
applicable Expiration Date in accordance with the terms and conditions herein
relating to the Sale Option. Furthermore, a Sale Option shall automatically be
revoked if there exists a Default or Event of Default at any time after such
Sale Option is properly elected, and, if an Event of Default exists, Lessor
shall be entitled to exercise all rights and remedies provided in Article VIII.
Lessee may not elect a Sale Option if there exists on the date the election is
made an Event of Default or a Default.

            Section 11.3 Sale Option Procedures. If Lessee elects a Sale Option
with respect to any Lease Supplement, Lessee shall use its best commercial
efforts to obtain the highest all cash purchase price for all of the Lease
Supplement Equipment then subject to such Lease Supplement, and Lessee shall
comply with Section 9.1 hereof. All costs related to such sale and delivery,
including the reasonable cost of sales agents, removal of the Equipment,
delivery of documents and the Equipment to any location designated by a buyer
within the continental United States, certification, installation and testing of
the Equipment in any location chosen by the buyer or prospective buyer,
reasonable legal costs, reasonable costs of notices, any advertisement or other
similar costs or other information and of any parts shall be borne entirely by
Lessee, without regard to whether such costs were incurred by Agent, Lessor,
Lessee or any potentially qualified buyer, and shall in no event be paid from
any of the Proceeds. Neither Agent, Lessor nor any Participant shall have any
responsibility for procuring any purchaser. If, nevertheless, Lessor, at the
direction of the Required Participants, undertakes any sales efforts, Lessee
shall promptly reimburse Agent, Lessor and/or any such Participant for any
reasonable charges, costs and expenses incurred in such effort, including any
allocated reasonable time charges, costs and expenses of internal counsel or
other reasonable attorneys' fees. Upon a sale of any Lease Supplement Equipment
pursuant to the Sale Option, such Lease Supplement Equipment shall be in the
condition required by Section 5.3 and Liens for Taxes not yet due and payable
(which shall be the responsibility of Lessee for the period prior to the sale)
and shall be free and clear of all Liens (including Permitted Liens, other than
Lessor Liens), and Lessee shall cause all such Lease Supplement Equipment to be
delivered to such location or locations designated by the buyer thereof. Lessor
(A) at the direction of the Required Participants, shall

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determine whether to accept the highest all cash offer for such Lease Supplement
Equipment which determination shall be made by the Required Participants, and
(B) if accepted by the Required Participants, Lessee shall sell such Lease
Supplement Equipment in accordance with the terms of such offer to the buyer
submitting such offer; provided that Lessor shall not be entitled to reject the
highest all cash offer for such Lease Supplement Equipment if the Proceeds from
the sale of such Lease Supplement Equipment pursuant to such offer would be
sufficient, together with the sum of the amounts referred to in clauses (i) and
(ii) of Section 11.1(c), to reduce such Lease Supplement Balance to $0. If,
within 45 days prior to the relevant Expiration Date relating to a Sale Option
with respect to any Lease Supplement, Lessee has not obtained an all cash
purchase price for the relevant Lease Supplement Equipment that would provide
Proceeds sufficient, together with such amounts referred to in clauses (i) and
(ii) of Section 11.1(c), to reduce such Lease Supplement Balance to $0, then any
Participant may request the Lease Term Appraisal with respect to such Lease
Supplement Equipment described in Section 11.4 and, if such Lease Term Appraisal
is requested, receipt of such Lease Term Appraisal at least ten (10) Business
Days prior to the relevant Expiration Date relating to such Sale Option shall be
a condition to the consummation of the sale of such Lease Supplement Equipment
on such Expiration Date. Any purchaser or purchasers of any Equipment shall not
in any way be affiliated with Lessee.

            Section 11.4 Appraisals. If Lessee exercises a Sale Option with
respect to any Lease Supplement and the sum of the anticipated Proceeds from the
sale of the relevant Lease Supplement Equipment and Related Property plus the
Residual Value Guarantee Amount then in effect with respect to such Lease
Supplement is less than the applicable outstanding Lease Supplement Balance,
Lessor (upon direction from any Participant) shall, as provided in Section 11.3,
engage an appraiser of nationally recognized standing reasonably acceptable to
Lessee, at Lessee's expense, to prepare a Lease Term Appraisal with respect to
such Lease Supplement Equipment to determine (by appraisal methods satisfactory
to the Participants) the Fair Market Value of such Lease Supplement Equipment as
of the relevant Expiration Date. If the Fair Market Value of such Lease
Supplement Equipment as of such Expiration Date set forth in such Lease Term
Appraisal is in excess of the aggregate Proceeds, Lessee shall, to the extent
required by Section 12.2 of the Participation Agreement, promptly pay to Lessor,
as Supplemental Rent, for the benefit of Lessor and the Participants, an amount,
not to exceed the lesser of the amount required by Section 12.2 of the
Participation Agreement and the amount of such excess, as necessary to repay the
relevant outstanding Lease Supplement Balance determined immediately prior to
the application of the foregoing amounts.

                                  ARTICLE XII

                      OWNERSHIP, GRANT OF SECURITY INTEREST
                             AND FURTHER ASSURANCES

      Section 12.1 Grant of Security Interest. Title to the Equipment shall
remain in Lessor as security for the obligations of Lessee hereunder and under
the other Operative Documents to which it is a party until Lessee has fulfilled
all of its obligations hereunder and thereunder (which security shall be
assigned by Lessor to Agent, for the benefit of the Participants, pursuant to
the relevant Security Documents). Lessee hereby assigns, hypothecates, transfers
and pledges to

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Lessor, and grants to Lessor a continuing security interest in, the Equipment
and other Collateral, to secure the payment of all sums due hereunder and under
the related documents to which it is a party and the performance of all other
obligations hereunder and under the other Operative Documents to which it is a
party.

      Section 12.2 Retention of Proceeds. If Lessee would be entitled to any
amount (including any Casualty Recoveries) or title to any Equipment hereunder
but for the existence of any Event of Default or Default, Lessor shall hold such
amount or Equipment as part of the Collateral and, while such Event of Default
exists, shall be entitled to apply such amounts against any amounts due
hereunder; provided, that Lessor shall (or shall cause Agent to) distribute such
amount or transfer such Equipment in accordance with the other terms of this
Lease if and when no Event of Default or Default exists or Lessee purchases the
Equipment pursuant to this Lease.

                                  ARTICLE XIII

                                  MISCELLANEOUS

      Section 13.1 Effect of Waiver. No delay or omission to exercise any right,
power or remedy inuring to Lessor, or Agent or any Participant through Lessor,
upon any breach or default of Lessee hereunder shall impair any such right,
power or remedy nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein or thereof or in any similar breach or
default thereafter occurring, nor shall any single or partial exercise of any
right, power or remedy preclude any other or further exercise thereof, or the
exercise of any other right, power or remedy, nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of Agent, Lessor or the Participants of any breach or
default under this Lease must be specifically set forth in writing and must
satisfy the applicable requirements set forth in Section 14.5 of the
Participation Agreement.

      Section 13.2 Applicable Law. THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED
UNDER THE INTERNAL LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO CONFLICT OF
LAW PRINCIPLES.

      Section 13.3 Effect and Modification of Lease. No variation, modification,
amendment or waiver of this Lease shall be valid unless entered into in
accordance with Section 14.5 of the Participation Agreement.

      Section 13.4 Notices. All demands, notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
given as provided from Section 14.3 of the Participation Agreement.

      Section 13.5 Counterparts. This Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument. This Lease has been executed in
several counterparts. One counterpart has been prominently marked "Counterpart
No. 1 ". Only the counterpart marked "Counterpart No.

                                       23

                                       23
<PAGE>

                                                                  EXECUTION COPY

1 " shall evidence a monetary obligation of Lessee or shall be deemed to be an
original or to be chattel paper for purposes of the Uniform Commercial Code, and
such copy shall be held by Agent.

      Section 13.6 Severability. Whenever possible, each provision of this Lease
shall be interpreted in such manner as to be effective and valid under
Applicable Laws; but if any provision of this Lease shall be prohibited by or
invalid under Applicable Laws, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Lease.

      Section 13.7 Successors and Assigns; Merger. This Lease shall be binding
upon the parties hereto and their respective successors and assigns and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

      Section 13.8 Section Headings; Table of Contents. Section headings and the
table of contents used in this Lease (including the schedule) are for
convenience of reference only and shall not affect the construction of this
Lease.

      Section 13.9 Final Agreement. THIS LEASE, TOGETHER WITH THE OTHER
OPERATIVE DOCUMENTS, REPRESENTS THE ENTIRE FINAL AGREEMENT BETWEEN THE PARTIES
WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED BY THE LEASE AND THE OTHER
OPERATIVE DOCUMENTS. THIS LEASE CANNOT BE MODIFIED, SUPPLEMENTED, AMENDED,
RESCINDED OR CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES, EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY THE
PARTIES HERETO IN ACCORDANCE WITH THE TERMS OF THE PARTICIPATION AGREEMENT.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

      Section 13.10 Timeliness of Performance. The provisions of Articles VIII
and XI pertaining to the delivery of notice and the performance of certain
events on dates required by Articles VIII and XI are to be strictly adhered to
by the parties hereto.

      Section 13.11 FINANCE LEASE. THE PARTIES INTEND THAT THIS LEASE BE A
FINANCE LEASE UNDER ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN
THE STATE OF CALIFORNIA.

                  [remainder of page intentionally left blank]

                                      24
<PAGE>

                                                                  EXECUTION COPY

      IN WITNESS WHEREOF, the parties hereto have caused this Lease to be
executed and delivered as of the date first above written.

                               FLASHVISION, L.L.C.

                               By:
                                  ------------------------------------
                               Name Printed:
                                            --------------------------
                               Title:
                                     ---------------------------------

                               ABN AMRO BANK N.V., not individually but
                               solely as Lessor

                               By:
                                  ------------------------------------
                               Name Printed:
                                            --------------------------
                               Title:
                                     ---------------------------------

                               By:
                                  ------------------------------------
                               Name Printed:
                                            --------------------------
                               Title:
                                     ---------------------------------

                                       25
<PAGE>

                                                                  EXECUTION COPY

THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART.

Receipt of this original counterpart of the foregoing Lease is hereby
acknowledged as of the date hereof.

ABN AMRO BANK N.V.,
not individually but solely as
Agent for the Participants

By:
   ------------------------------------
Name Printed:
             --------------------------
Title:
      ---------------------------------

By:
   ------------------------------------
Name Printed:
             --------------------------
Title:
      ---------------------------------

                                       26
<PAGE>

                               SCHEDULE A TO LEASE

                                   Fixed Rent

      Fixed Rent will be set on each Lease Supplement Closing Date in respect of
the Lease Supplement Equipment financed on such date, based on the Fair Market
Value of each Item of Equipment so financed on such date (as set forth in the
most recent Initial Appraisal, Annual Appraisal or Supplemental Appraisal then
delivered in respect thereof). This Schedule A will be replaced on the initial
Lease Supplement Closing Date with a mutually acceptable Schedule A reflecting
the Fixed Rent payable with respect to the Items of Equipment made subject to
the Lease on such date.

                                 Schedule A - 1

                                       27
<PAGE>

                                                                  EXECUTION COPY

                               SCHEDULE B TO LEASE

         Percentage Applicable to Calculation of Residual Value Guarantee Amount

            Base Term of any Lease Supplement:              86%

            Renewal Term #1 of any Lease Supplement:        88%

            Renewal Term #2 of any Lease Supplement:        88%

            Renewal Term #3 of any Lease Supplement:        88%

            Renewal Term #4 of any Lease Supplement:        88%

                                 Schedule B - 1

                                       28
<PAGE>

                                                                  EXECUTION COPY

                                                              EXHIBIT A TO LEASE

                            LEASE SUPPLEMENT NO. ____

      COUNTERPART NO. ____ OF SERIALLY NUMBERED MANUALLY EXECUTED COUNTERPARTS.
      TO THE EXTENT THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER THE
      UNIFORM COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE
      CREATED THROUGH THE TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN
      COUNTERPART NO. 1.

      Lease Supplement No. ___ dated _____________, _____ (this "Lease
Supplement") between FLASHVISION, L.L.C., a Virginia limited liability company
("Lessee"), and ABN AMRO BANK N.V. ("Lessor"), not in its individual capacity,
but solely in its capacity as Lessor.

                              W I T N E S S E T H:

      WHEREAS, Lessee and Lessor have heretofore entered into that certain
Master Lease Intended as Security (FlashVision/SanDisk Tranche) dated as of
December 27, 2000 (as from time to time amended, restated, supplemented or
otherwise modified, the "Lease"; unless otherwise defined herein, capitalized
terms used herein shall have the meanings specified in the Lease); and

      WHEREAS, the Lease provides for the execution and delivery of a separate
Lease Supplement on each Lease Supplement Closing Date for the Equipment to be
acquired on such Lease Supplement Closing Date for the purpose of confirming the
acceptance and lease of such Equipment, specifying the purchase prices and
descriptions applicable to such Equipment and setting forth certain other
matters, all as required pursuant to the Lease and the other Operative
Documents;

      NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, Lessor and Lessee hereby agree as follows:

      (1) Inspection and Approval. Lessee hereby acknowledges and confirms that
it has inspected, received and approved the Equipment set forth on Schedule I
hereto for all purposes of the Lease and the other Operative Documents and, as
among Agent, Lessor, the Participants and Lessee, such Equipment complies in all
material respects with the specifications for such Equipment, is in good working
order, repair, condition and appearance and has been Installed and Accepted at
the Facility and is otherwise acceptable to Lessee. Lessee hereby certifies that
it has no knowledge of any defect in any of the Equipment set forth on Schedule
I with respect to design, manufacture, condition (reasonable wear and tear
excepted) or in any other respect. Lessee reaffirms, as to the Equipment set
forth in Schedule I, each of the waivers acknowledgments and agreements of
Lessee set forth in Article VII of the Lease.

                                  Exhibit A - 1

                                       29
<PAGE>

                                                                  EXECUTION COPY

      (2) Delivery and Acceptance. Lessor hereby confirms delivery and lease to
Lessee, and Lessee hereby confirms acceptance of delivery and lease under the
Lease hereby supplemented, of the Equipment listed on Schedule I hereto and all
Related Property.

      (3) Warranty. Lessee hereby represents and warrants that (i) no event
which would constitute a Casualty under the Lease has occurred with respect to
any of the Equipment set forth on Schedule I hereto as of the date hereof and
(ii) no offset assertable by Lessee exists with respect to the Equipment covered
by this Lease Supplement or any Rent that will be payable with respect to such
Equipment. Lessee hereby reaffirms each of the representations and warranties
set forth in Section 7.2 of the Participation Agreement as if made on the date
hereof, including that the Equipment set forth on Schedule I hereto and all
Related Property is free and clear of all Liens other than Permitted Liens.

      (4) Payment of Vendors. Lessee hereby represents and warrants that on or
prior to the Lease Supplement Closing Date, it has paid each vendor of the
Equipment set forth on Schedule I hereto in full or will pay such vendor in full
with the proceeds of the Advance being made on such date pursuant to the terms
of the relevant Acquisition Agreement.

      (5) Confirmation. Lessee hereby confirms its agreement, in accordance with
the Lease, as supplemented by this Lease Supplement, to pay Basic Rent to
Lessor, for the Equipment subject hereto. Nothing herein shall reduce Lessee's
obligation to make all other payments required under the Lease and the other
Operative Documents, including those payments to be made on the last day of the
Lease Term with respect to the Equipment described on Schedule I hereto pursuant
to Article XI of the Lease.

      (6) Base Term. The Base Term of this Lease Supplement shall commence on
the date hereof and end on the first anniversary of the date hereof (the
"Scheduled Expiration Date" of this Lease Supplement), subject to renewal or
early termination as provided in the Lease.

      (7) Lease Supplement Balance. Until reduced by any payments of Fixed Rent
or any Renewal Payments applied with respect to this Lease Supplement, the Lease
Supplement Balance of this Lease Supplement as of the date hereof is $_________.

      (8) Fixed Rent. Payments of the Fixed Rent are due with respect to this
Lease Supplement on the dates and in the amounts set forth in Schedule A to the
Lease. Other payments of Basic Rent and Supplemental Rent are due with respect
to this Lease Supplement as set forth in Section 3.2 of the Lease.

      (9) Incorporation into Lease. This Lease Supplement shall be construed in
connection with and as part of the Lease, and all terms, conditions and
covenants contained in the Lease, as supplemented by this Lease Supplement,
shall be and remain in full force and effect and shall govern the Equipment
described on Schedule I hereto.

      (10) References. Any and all notices, requests, certificates and other
instruments executed and delivered concurrently with or after the execution and
delivery of this Lease Supplement may refer to the "Master Lease Intended as
Security (FlashVision/SanDisk Tranche), dated as of December 27, 2000", or may
identify the Lease in any other respect

                                  Exhibit A - 2

                                       30
<PAGE>

                                                                  EXECUTION COPY

without making specific reference to this Lease Supplement, but nevertheless all
such references shall be deemed to include this Lease Supplement, unless the
context shall otherwise require.

      (11) Counterparts. This Lease Supplement may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument. Only the counterpart designated
as "Counterpart No. 1" shall evidence a monetary obligation of Lessee or shall
be deemed to be chattel paper for purposes of the Uniform Commercial Code, and
such copy shall be held by Agent.

      (12) GOVERNING LAW. THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE INTERNAL LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO
CONFLICT OF LAW PRINCIPLES.

                  [remainder of page intentionally left blank]

                                  Exhibit A - 3

                                       31
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Lease Supplement
No. ___ to be executed and delivered as of the date first above written.

                               FLASHVISION, L.L.C.

                               By:
                                  -------------------------------------
                               Name Printed:
                                            ---------------------------
                               Title:
                                     ----------------------------------

                               ABN AMRO BANK N.V., not individually but
                               solely as Lessor

                               By:
                                  -------------------------------------
                               Name Printed:
                                            ---------------------------
                               Title:
                                     ----------------------------------

                               By:
                                  -------------------------------------
                               Name Printed:
                                            ---------------------------
                               Title:
                                     ----------------------------------

                                       32
<PAGE>

THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART.

Receipt of this original counterpart of the foregoing Lease Supplement is hereby
acknowledged as of the date hereof.

ABN AMRO BANK N.V.,
not individually but solely as
Agent for the Participants

By:
   -------------------------------------
Name Printed:
             ---------------------------
Title:
      ----------------------------------

By:
   -------------------------------------
Name Printed:
             ---------------------------
Title:
      ----------------------------------

                                       33
<PAGE>

                                  ATTACHMENT A
                           TO LEASE SUPPLEMENT NO. ___

                          _____________, ______ Funding

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
                                                                                              Fair
           Equipment                                            Delivery   Internal  Purchase Market
 Tool ID  Description  Manufacturer  Model    PO#   Serial #      Date     Order #    Price   Value
----------------------------------------------------------------------------------------------------
<S>       <C>          <C>           <C>      <C>   <C>         <C>        <C>       <C>      <C>
----------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------
</TABLE>

   Total Lease Supplement No. ____                             $_______________

                                       34

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