Document:

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                                                                   EXHIBIT 10.36

                          PRODUCT DEVELOPMENT AGREEMENT

This Product Development Agreement is made and entered into by and between
Toshiba Corporation, a Japanese corporation with a principal place of business
at 1-1, Shibaura 1-chome, Minato-ku, Tokyo 105-8001, Japan (hereinafter
"Toshiba"), and SanDisk Corporation, a Delaware corporation with a principal
place of business at 140 Caspian Court, Sunnyvale, CA 94089, U. S. A.
(hereinafter "SanDisk").

WHEREAS, Toshiba and SanDisk, concurrently with the execution of this Agreement,
are entering into a Master Agreement dated as of May 9, 2000 among Toshiba,
Semiconductor North America, Inc. and SanDisk concerning, among other things,
the development and manufacture of NAND Flash Memory Products (the "Master
Agreement"); and

WHEREAS, Toshiba and SanDisk additionally, and in conjunction with the Master
Agreement, have held discussion regarding the joint development of certain NAND
Flash Memory Products and technologies.

NOW, THEREFORE, in consideration of the mutual covenants and premises contained
herein, the parties agree as follows:

ARTICLE 1. DEFINITIONS

1.1  "Products" shall mean the NAND Flash Memory devices developed hereunder,
     including, without limitation, the NAND Flash Memory devices specified in
     Exhibit A attached hereto, but excluding Flash Memory Controllers.

1.2  Flash Memory Controller" shall mean any firmware, hardware and/or software
     that is necessary to operate a NAND Flash memory device.

1.3  "Developed Products" shall mean Products solely developed by either party
     during the term of this Agreement, including without limitation, solely
     developed derivatives of Jointly Developed Products, provided however, that
     Developed Products shall not include cut-downs of Jointly Developed
     Products.

1.4  "Jointly Developed Products" shall mean Products jointly developed by
     Toshiba and SanDisk during the term of this Agreement.

1.5  "Toshiba Developed Controller" shall mean a Flash Memory Controller solely
     developed by Toshiba during the term of this Agreement, including without
     limitation, solely developed derivatives of Jointly Developed Controllers.

1.6  "SanDisk Developed Controller" shall mean a Flash Memory Controller solely
     developed by SanDisk during the term of this Agreement, including without
     limitation, solely developed derivatives of Jointly Developed Controllers.

1.7  "Jointly Developed Controller" shall mean a Flash Memory Controller
     developed by Toshiba and SanDisk during the term of this Agreement.

CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.

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1.8  "Development Project" shall mean all development activities undertaken
     pursuant to Article 2.

1.9  "Background Technology" shall mean the Technology which has been or will be
     developed by or for either party independently of the Development Projects
     and owned or controlled by such party prior to or during the term of this
     Agreement, and which shall be deemed reasonably necessary for the other
     party to perform the Development Projects. Background Technology may be
     either SanDisk Background Technology or Toshiba Background Technology, as
     the context requires.

1.10 "Technology" shall mean all developments, ideas, inventions, Test
     Technology and other technical information (whether or not patentable)
     relating to Products as well as intellectual property rights relating
     thereto, including, but not limited to, trade secrets, copyrights and
     maskwork rights, but specifically excluding Patents.

1.11 "Developed Technology" shall mean Technology solely developed by either
     party in the course of the Development Projects.

1.12 "Jointly Developed Technology" shall mean Technology jointly developed by
     Toshiba and SanDisk in the course of the Development Projects.

1.13 "Test Technology" shall mean all developments, ideas, inventions, test
     programs. test methods, configured and developed hardware and other
     technical information (whether or not patentable) for all stages of product
     manufacture, as well as intellectual property rights relating thereto, but
     specifically excluding Patents, concerning testing of Products and Flash
     Memory Controllers.

1.14 "Controller Technology" shall mean all developments, ideas, inventions and
     technical information (whether or not patentable) relating to Flash Memory
     Controllers and intellectual property rights relating thereto, including,
     but not limited to, trade secrets, copyrights and maskwork rights, but
     specifically excluding Patents.

1.15 "Jointly Developed Controller Technology" shall mean Controller Technology
     developed by Toshiba and SanDisk during the term of this Agreement.

1.16 "Developed Controller Technology" shall mean Controller Technology solely
     developed by either party during the term of this Agreement.

1.17 "SanDisk Controllers" shall mean SanDisk Developed Controllers, Jointly
     Developed Controllers, SanDisk Developed Controller Technology, and Jointly
     Developed Controller Technology.

1.18 "SanDisk Products and Technology" shall mean SanDisk Developed Products,
     SanDisk Background Technology, SanDisk Developed Technology and SanDisk
     Controllers.

1.19 "Toshiba Products and Technology" shall mean Toshiba Developed Products,
     Toshiba Background Technology, Toshiba Developed Technology, Toshiba
     Developed Controller Technology and Toshiba Developed Controllers.

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1.20 "Joint Products and Technology" shall mean Jointly Developed Products and
     Jointly Developed Technology.

1.21 "Patents" shall mean all classes of types of patents, utility models
     (excluding design patents) and any applications therefor in all countries
     of the world, which are, now or hereafter, owned or controlled by either
     party hereto.

1.22 "Jointly Developed Patents" shall mean Patents which arise out of the
     inventions jointly made by the employees of Toshiba or SanDisk in the
     course of the Development Projects.

1.23 "Effective Date" shall be May 9, 2000.

1.24 "Agreement" means this Product Development Agreement together with any
     Exhibits, Schedules, Appendices and Attachments hereto and the Rules
     Document.

1.25 "Rules Document" shall mean the Definitions, Rules of Construction and
     Documentary Conventions, attached as Appendix A.

ARTICLE 2. DEVELOPMENT

2.1  Each party agrees to undertake at Toshiba's or SanDisk's facilities the
     Development Projects specified in Exhibit A in accordance with a
     development schedule and activity allocations to be determined by the
     Coordinating Committee. During the term of this Agreement, the parties will
     use reasonable efforts to continually identify and pursue joint development
     of new products and Exhibit A may be amended from time to time, in
     accordance with the approval of the Coordinating Committee, to reflect such
     new Development Projects. Without limiting the foregoing, the parties will
     discuss the development of a SmartMedia MLC Controller.

2.2  Each party shall, from time to time during the term of this Agreement and
     to the extent reasonably necessary to perform the Development Projects,
     provide the other party with technical information relating to its
     Background Technology.

2.3  Each party shall, from time to time during the term of this
     Agreement, provide the other party with technical information relating
     to Jointly Developed Technology and Jointly Developed Controller
     Technology.

2.4  A party that is in possession of Jointly Developed Technology, Jointly
     Developed Controller Technology or other technical information, including
     without limitation the items specified in Exhibit C, shall, upon request of
     the other party made at any time during the term of this Agreement or for a
     period of one year thereafter, promptly deliver to the other party copies
     of such information as requested. When requested by either party, such
     exchange of information, shall include, but shall not be limited to, test
     flow conditions and related know-how.

2.5  During the term of this Agreement, upon request by either party and subject
     to the availability of the other party's engineers, the other party shall
     (i) delegate its qualified engineers to advise and consult with such
     requesting party at the requesting party's

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     facilities or (ii) receive qualified engineers of the requesting party to
     train and advise at its own facilities. The details of such delegation or
     reception of the engineers shall be decided by the Coordinating Committee
     as described in Article 3.

2.6  This Agreement shall not encompass or include products or technology
     developed jointly or solely by the parties, utilizing or based on Toshiba
     NOR flash technology or other Toshiba non-NAND Flash technologies, or
     SanDisk NOR flash technology or other SanDisk non-NAND flash technologies.

2.7  Either party may propose to disclose (the "proposing party") Jointly
     Developed Controller Technology to any Qualified Design House under a
     written agreement of confidentiality and non-use, for a period of
     restriction generally to be discussed and agreed upon by the Coordinating
     Committee, but if not so discussed or agreed upon, then for a period of at
     least seven years, for the purpose of engaging such Qualified Design House
     to design a solely developed Flash Memory Controller for the account of the
     proposing party to be manufactured and sold by the proposing party. Prior
     to making such disclosure to a Qualified Design House, the proposing party
     shall give the other party to this Agreement (the "reviewing party") the
     opportunity to jointly develop such product with the proposing party. The
     opportunity should be presented in detail at a meeting of the Coordinating
     Committee and the reviewing party will be given a reasonable amount of time
     to consider the proposal. If the reviewing party accepts the opportunity to
     enter into such joint development, the proposing party shall not make the
     disclosure to the Qualified Design House. For the purpose of this section,
     "Qualified Design House" shall mean a company which offers services to
     design devices similar to Flash Memory Controllers but which does not make
     or sell flash memory devices or flash cards.

ARTICLE 3. COORDINATING COMMITTEE

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

3.2  The Coordinating Committee shall be responsible for:

     (a)  Determining new Products and Flash Memory Controllers to be jointly
          developed, including product design and manufacturing specifications.
          All Product development projects, including Flash Memory Controller
          development projects, and projects considered by either party for sole
          development, shall be disclosed to the Coordinating Committee prior to
          the start of development;

     (b)  Reviewing the progress of the Development Projects against the
          development schedule and evaluating the Development Projects;

     (c)  Discussing necessary changes to the scope or the schedules of the
          Development Projects and actions to be taken;

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     (d)  Resolving any differences in opinions between the parties which may
          arise during the course of the Development Projects;

     (e)  Allocation of wafer processing costs as specified in Article 5;

     (f)  Discussing inventorship of patents conceived by the parties as a
          result of any joint development activity hereunder; and

     (g)  Any other matters as agreed upon by both parties.

          All decisions by the Coordinating Committee, including without
          limitation, any decision to jointly develop Products or Flash Memory
          Controllers, shall be made unanimously and shall be set forth in
          writing. If any matter is not determined by unanimous consent of the
          Coordinating Committee, such matter shall be referred to Management
          Committee (as defined in the Master Agreement executed concurrently
          herewith) for its final decision. In connection with discussing
          inventorship of patents pursuant to Section 3.2(f), the parties agree
          to notify the Coordinating Committee as soon as possible, but not
          later than three months after such party's knowledge of the filing
          date of the particular patent.

3.3  The Coordinating Committee shall have periodical meetings which shall be
     led by the Technical Coordinator of both parties on a quarterly basis, or
     at such other intervals, alternatively in the United States and in Japan or
     such other places as mutually agreed upon by the Technical Coordinators of
     each party. Either party may invite other of its employees to attend such
     meetings.

ARTICLE 4. TECHNICAL COORDINATORS

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

For Toshiba: Seiichi Aritome

For SanDisk: Hao Fang

ARTICLE 5. COST

     Each party shall bear all costs and expenses incurred by such party in
performing the Development Projects which will include without limitation the
salaries of its engineers involved in joint development projects hereunder.
Notwithstanding the foregoing, in order to balance each party's cost for Jointly
Developed Products and Jointly Developed Flash Memory Controllers, SanDisk shall
share Toshiba's direct costs of processing certain wafers to be made for the
purpose of such Product design verification (including mask costs) and other
material costs relating thereto such as subcontractor fees for packaging and
analysis in a manner as set

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forth in Exhibit B. Similarly, Toshiba shall share the direct costs of
processing certain wafers to be made for the purpose of Flash Memory Controller
verification (including mask costs) and other material costs relating thereto,
such as subcontractor fees for packaging and analysis, in a manner as determined
by the Coordinating Committee but conceptually similar to the nature of the
expenses shared by SanDisk for Products.

ARTICLE 6. OWNERSHIP

6.1  Toshiba Products and Technology shall be and remain the exclusive property
     of Toshiba, subject to the license granted in accordance with Article 7.1
     hereof. From time to time, upon request of SanDisk, Toshiba shall offer
     SanDisk, based upon reasonable terms, a non-exclusive, worldwide,
     non-transferable license, without right to sublicense, to develop, have
     developed, make, have made, use, sell, modify and otherwise dispose of all
     or a portion of the Toshiba Products and Technology.

6.2  Toshiba Patents shall be and remain the exclusive property of Toshiba,
     subject to the licenses granted in accordance with the Patent Cross License
     Agreement between SanDisk Corporation and Toshiba Corporation, including
     any amendments thereto (as so amended, the "Patent Agreement").

6.3  SanDisk Products and Technology shall be and remain the exclusive property
     of SanDisk, subject to the licenses granted in accordance with Article 7.2
     and 7.3 hereof. From time to time, upon request of Toshiba, SanDisk shall
     offer Toshiba, based upon reasonable terms, a non-exclusive, worldwide,
     non-transferable license, without right to sublicense, to develop, have
     developed, make, have made, use, sell, modify and otherwise dispose of all
     or a portion of the SanDisk Products and Technology.

6.4  SanDisk Patents shall be and remain the exclusive property of SanDisk,
     subject to the licenses granted in accordance with the Patent Agreement.

6.5  Any right, title and interest in and to Joint Products and Technology shall
     be jointly owned by Toshiba and SanDisk. With the exception that neither
     party may sublicense or transfer Joint Products and Technology without the
     prior written consent of the other party, Toshiba and SanDisk each has the
     right to use, fully exploit, disclose or otherwise dispose of such Joint
     Products and Technology for any purpose without consent of nor accounting
     to the other party.

6.6  Any right, title and interest in and to Jointly Developed Patents shall be
     jointly owned by Toshiba and SanDisk. Each party shall be free to use such
     Jointly Developed Patents for any purpose and shall have the right to grant
     non-exclusive licenses to any third party without the consent of nor
     accounting to the other party, except as required by Paragraph 18 of the
     Amendment to Patent Cross License Agreement. Both parties shall promptly
     agree on which of them shall file and prosecute the first patent
     application and which countries' corresponding applications shall be filed
     and by whom. All expenses incurred in obtaining and maintaining such
     patents shall be shared equally by the parties; provided that if one party
     elects not to seek or maintain such patents in any particular country or
     not to share equally in the expense thereof, the other party shall have the
     right to seek or

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     maintain such patents in said country at its own expense and shall have
     full control over the prosecution and maintenance thereof even though title
     to any patent issuing thereon shall be joint. The party electing not to
     seek or maintain such patents shall give the other party any necessary
     assistance required for the preparation and prosecution of such patents
     filed or maintained by the other party. Jointly Developed Patents shall not
     be considered "SanDisk Licensed Patents" or "Toshiba Licensed Patents" as
     defined in the Patent Agreement.

ARTICLE 7. LICENSE

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

7.2  Subject to the terms and conditions of this Agreement, SanDisk hereby
     grants to Toshiba a non-exclusive, non-transferable, worldwide and
     royalty-free license, without the right to sublicense, to use SanDisk
     Background Technology provided to Toshiba hereunder to develop, have
     developed, make, have made, use, sell, modify and otherwise dispose of
     Products, Toshiba Developed Controllers and other controller products not
     designed or used for file storage.

7.3  Subject to the terms and conditions of this Agreement, SanDisk hereby
     grants to Toshiba a non-exclusive, non-transferable, worldwide and
     royalty-free license, without the right to sublicense, to make, have made,
     use, sell, modify and otherwise dispose of any Jointly Developed
     Controllers.

7.4  It is understood that SanDisk has the right to use, fully exploit,
     disclose, sublicense, transfer or otherwise dispose of SanDisk Controllers
     and any other controller product designed by or for SanDisk without consent
     from or accounting to Toshiba, even if such SanDisk Controllers or other
     controller products incorporate any Toshiba Background Technology.

ARTICLE 8. WARRANTY

8.1  Toshiba and SanDisk each provides to the other party its Background and
     Developed Technology on an "as-is" basis only, and neither makes any
     warranty or representation with respect to the Background Technology or
     Developed Technology for any purpose.

8.2  Nothing contained in this Agreement shall be construed as:

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

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

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

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

ARTICLE 9. LIMITATION OF LIABILITY

     Neither party shall be responsible to the other party in respect of any
action taken or reliance upon any information furnished to the other party under
this Agreement, except to the extent of any breach of the warranties or
agreements set forth in this Agreement. IN NO EVENT SHALL EITHER PARTY BE LIABLE
TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGE
OF ANY KIND, (INCLUDING WITHOUT LIMITATION LOSS OF PROFIT OR DATA) WHETHER OR
NOT ADVISED OF THE POSSIBILITY OF SUCH LOSS.

ARTICLE 10. CONFIDENTIALITY

10.1 As used in this Agreement, the term "Confidential Information" shall mean
     any information disclosed by one party to other party pursuant to this
     Agreement which is in written, graphic, machine readable or other tangible
     form and is marked Confidential, Proprietary or in some other manner to
     indicate its confidential nature. Confidential Information may also include
     oral information disclosed by one party to the other party pursuant to this
     Agreement; provided that such information is designated in a manner to
     indicate its confidential nature at the time of disclosure and reduced to a
     written summary by the disclosing party within thirty (30) days after its
     oral disclosure.

10.2 During the ten (10) year period following receipt of such information, the
     receiving party shall keep, and cause its Subsidiaries, its sublicensees
     and subcontractors who have access to Confidential Information as permitted
     in this Agreement to keep any Confidential Information, including but not
     limited to Background Technology and Developed Technology provided by the
     disclosing party hereunder, in strict confidence, and shall not disclose
     such Confidential Information to any third party without the prior written
     consent of the disclosing party. The receiving party shall maintain the
     Confidential Information with at least the same degree of care that the
     receiving party uses to protect its own strictly confidential information,
     but no less than a reasonable degree of care under the circumstances.
     Further, the receiving party shall not use the Confidential Information for
     any purpose other than for the Development Projects, except as otherwise
     provided herein.

10.3 Each party shall not disclose the terms and conditions of this Agreement to
     any third party without the prior written consent of the other party.

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10.4 The confidentiality obligation set forth in Articles 10.2 and 10.3 above
     shall not apply to any information which:

     (a)  is already known by the receiving party at the time of disclosure;

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

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

     (d)  is independently developed by the receiving party;

     (e)  is disclosed with the prior written consent of the disclosing party
          hereto; or

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

10.5 Each party understands that disclosure or dissemination of the other
     party's Confidential Information, specifically Toshiba Background
     Technology provided to SanDisk in connection with the Development Projects,
     not expressly authorized hereunder would cause irreparable injury to such
     other party, for which monetary damages would not be an adequate remedy and
     said other party shall be entitled to equitable relief in addition to any
     remedies the other party may have hereunder or at law. In the event SanDisk
     is to enter into any joint development work with any third party, SanDisk
     warrants that Toshiba Background Technology provided to SanDisk in
     connection with the Development Projects shall neither be used for such
     joint development work nor be disclosed to any third party unless expressly
     otherwise provided hereunder.

10.6 The Technical Coordinator of each party shall ensure that the other party's
     Technical Coordinator are informed of and receive in sufficient detail and
     completeness the Background and Developed Technology that are exchanged
     under Article 2 hereof. Each Technical Coordinator shall also monitor
     within their company the distribution of Confidential Information received
     from the other party only to those who have a need to know and, further, to
     assist in preventing the unauthorized disclosure of the Confidential
     Information to personnel within the company who do not have a need to know,
     or to third parties. The Technical Coordinator for each party shall
     maintain pertinent records and the like, and acknowledge the receipt from
     the other party of all Confidential Information.

ARTICLE 11. TERM AND TERMINATION

11.1 This Agreement shall become effective on the Effective Date and continue in
     full force and effect until the termination of the Master Agreement, unless
     earlier terminated as hereinafter provided. The term of this Agreement may
     be extended by mutual agreement of both parties.

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

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

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

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

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

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

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

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

11.4 In the event of termination or expiration of this Agreement, the rights and
     licenses granted to each party specified in Article 7 shall survive such
     termination or expiration, except that if this Agreement is terminated by
     either party for any of the events specified in Articles 11.2 and 11.3
     above, then the licenses granted to the defaulting party or the
     non-terminating party, as the case may be, shall thereupon terminate. The
     provisions of Articles 6, 8, 9, 10, 11 and 12 shall survive any termination
     or expiration of this Agreement.

ARTICLE 12. GENERAL PROVISIONS

12.1 All notices required or permitted to be given hereunder shall be in writing
     and shall be delivered by prepaid air express or registered airmail,
     postage prepaid or by telefax, if confirmed or acknowledged, to the
     following or to such changed address as may have been previously specified
     in writing by the addressed party:

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     If to Toshiba:

             (For general contract matters)
             Toshiba Corporation
             1-1, Shibaura 1-chome
             Minato-ku, Tokyo 105-8001
             Japan
             Telephone: 011 81 45890 2721
             Facsimile: 011 81 45890 2793
             Attention:  Senior Manager Flash Memory Engineering

     If to SanDisk

             (For general contract matters)

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

             With a copy to:

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

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

12.3 In the event that the parties will, after the Effective Date, make
     announcement regarding this transaction and their business relationship,
     such announcement shall be in a mutually agreeable form and at a mutually
     agreeable time, provided that any information to be disclosed and/or
     announced by either party shall be identified through consultation with the
     other party and be agreed upon between the parties before the disclosure
     and announcement.

12.4 Neither party shall export or re-export, directly or indirectly, any
     technical information disclosed hereunder or direct product thereof to any
     destination prohibited or restricted by the export control regulations of
     Japan and the United States, including the U.S. Export Administration
     Regulations, without the prior authorization from the appropriate
     governmental authorities. SanDisk hereby certifies that SanDisk will not
     use technical

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     information supplied by Toshiba hereunder for any purpose to develop or
     manufacture nuclear, chemical, biological weapons or missiles (hereafter
     "weapons of mass destruction"). SanDisk further certifies that it will not
     sell any products manufactured using Toshiba's technical information to any
     party if it knows that the end-user of the products will use them for the
     development and/or manufacture of the weapons of mass destruction.

12.5 The rules of construction and documentary conventions set forth in the
     Rules Document shall apply to, and are hereby incorporated in, this
     Agreement.

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

Toshiba Corporation                                SanDisk Corporation

By: /s/ Yasuo Morimoto                             By: /s/ Eli Harari
    ------------------                                 --------------
Name:    Yasuo Morimoto                             Name:   Eli Harari
Title:   Corporate Senior Vice President            Title:  President and CEO
         and Director President and
         CEO Semiconductor Company

Date:    May 9, 2000                                Date:   May 9, 2000

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                                    EXHIBIT A

    JOINTLY DEVELOPED PRODUCTS AND JOINTLY DEVELOPED FLASH MEMORY CONTROLLERS

1.    256 M   NAND Flash Memory {For 0.16 micron or smaller technologies}

2.    512 M   NAND Flash Memory {For 0.16 micron or smaller technologies}

3.    1 G     NAND Flash Memory

4.    2 G     NAND Flash Memory

5.            *

6.            *

7.    * NAND controllers as decided by the Coordinating Committee.

8.    Other NAND memory products as decided by the Coordinating Committee.

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

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

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

*    INDICATES THAT CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
     SEPARATELY WITH THE COMMISSION PURSUANT TO RULE 24b-2. CONFIDENTIAL
     TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

                                    EXHIBIT B

                       SHARING OF WAFER PROCESSING COSTS -
       (FOR JOINTLY DEVELOPED PRODUCTS AND JOINTLY DEVELOPED CONTROLLERS)

                           JOINTLY DEVELOPED PRODUCTS

                               SANDISK                         TOSHIBA

(1) 1H/2000                            *                               *

(2) 2H/2000                            *                               *

(3) 1H/2001 and beyond                 *                               *

                          JOINTLY DEVELOPED CONTROLLERS

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

Note 1: All costs charged pursuant to this Exhibit B are direct costs and have
been referred to by the parties as Direct R&D charges. Original back-up
information and financial detail of all such charges shall be made available to
the party paying the shared expense, and all such charges are subject to
financial audit by the external auditors of the party paying the charge. The
party receiving payment shall cooperate with all reasonable requests to view and
make copies of financial back-up and financial detail material associated with
the charges.

Note 2: Payments specified above shall be made within sixty (60) days after
receipt of invoice issued at the end of each calendar half year.

*    INDICATES THAT CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
     SEPARATELY WITH THE COMMISSION PURSUANT TO RULE 24b-2. CONFIDENTIAL
     TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

                                    EXHIBIT C

     Technical Information to be Exchanged by the Parties In Connection with
   Jointly Developed Technology and Jointly Developed Controller Technology1
                              (Non-exclusive List)

1.   Device Specifications

2.   Process Specifications

3.   Design Specifications

4.   Product Specifications

5.   Process Flow

6.   Design Schematics

7.   Simulation Results

8.   Test Flow

9.   Test Conditions

10.  Product Data Base

11.  Reliability Data

12.  Product Qualification Procedures

13.  Yield Information

14.  Failure Analysis

15.  Controller Firmware

16.  Controller Software

--------
     1 All such information shall be provided in English.

<PAGE>

                                                                      APPENDIX A

                     DEFINITIONS, RULES OF CONSTRUCTION AND
                             DOCUMENTARY CONVENTIONS

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

                                    ARTICLE I

                                   DEFINITIONS

     The following terms shall have the specified meanings:

     "Accountants" means such firm of nationally recognized independent
certified public accountants for the Company as is appointed pursuant to the
Operating Agreement from time to time. Initially, the Accountants shall be
Deloitte & Touche LLP.

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

     "Affiliate" of any Person means any other Person which directly or
indirectly controls, is controlled by or is under common control with, such
Person; PROVIDED, HOWEVER, that the term Affiliate, (a) when used in relation to
the Company, shall not include either Member or any of its Affiliates, and (b)
when used in relation to a Member or any of its Affiliates, shall not include
the Company or any of its Subsidiaries.

     "Articles" means the Articles of Organization of the Company.

     "Bankruptcy Event" means, with respect to any Person, the occurrence or
existence of any of the following events or conditions: such Person (1) is
dissolved; (2) becomes insolvent or fails or is unable or admits in writing its
inability generally to pay its debts as they become due; (3) makes a general
assignment, arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors' rights, or a petition is
presented for its winding up or liquidation and, in the case of any such
proceeding or petition instituted or presented against it, such proceeding or
petition (A) results in a judgment of insolvency or bankruptcy or the entry of
an order for relief or the making of an order for its winding up or liquidation
or (B) is not dismissed, discharged, stayed or restrained in each case within 60
days of the institution or presentation thereof; (5) has a resolution passed by
its governing body for its winding-up or liquidation; (6) seeks or becomes
subject to the appointment of an

<PAGE>

administrator, receiver, trustee, custodian or other similar official for it or
for all or substantially all its assets (regardless of how brief such
appointment may be, or whether any obligations are promptly assumed by another
entity or whether any other event described in this clause (6) has occurred and
is continuing); (7) experiences any event which, under the applicable laws of
any jurisdiction, has an analogous effect to any of the events specified in
clauses (1) through (6) above; or (8) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the foregoing
acts.

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

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

     "Business Plan" means the Initial Business Plan and each subsequent
business plan, including budgets and projections for the Company for each
relevant period, adopted in accordance with Section 3.04(c) of the Operating
Agreement and complying with Section 3.04(b) of the Operating Agreement.

     "Capital Contribution" means each capital contribution to be made by each
Member pursuant to Schedule 6.01 to the Operating Agreement.

     "Capital Transaction" means a disposition by the Company of property which
is or has been property of a character subject to the allowance for depreciation
provided in Section 167 of the Code if such disposition results in the
recognition of gain or loss by the Company. In addition, if the value of
property is adjusted pursuant to Section 7.01(B) of the Operating Agreement, the
amount of such adjustment shall be treated as an item of gain from a Capital
Transaction (if the adjustment is a positive adjustment) or an item of loss from
a Capital Transaction (if the adjustment is a negative adjustment).

                                       2
<PAGE>

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

     "Closing" means the closing of the transactions described in Section 3.01
of the Master Agreement.

     "Closing Date" means the date mutually agreed for the Closing by the
parties to the Master Agreement; PROVIDED, HOWEVER, that in no event will the
Closing Date be later than September 1, 2000, without the written agreement of
both Parents.

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

     "Company" means FlashVision, L.L.C., a limited liability company formed by
the Members under the laws of thE Commonwealth of Virginia.

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

     "DSC" means Dominion Semiconductor Company, L.L.C.

     "DSC Foundry Agreement" means the Foundry Agreement between DSC and the
Company.

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

     (a) a Bankruptcy Event of such Member or its Parent or any Person of which
such Member is a Subsidiary;

     (b) the failure of such Member to make any required Capital Contribution
within forty-five (45) Business Days after receipt of written notice from the
Company or the other Member that such Capital Contribution was not made when due
under the Operating Agreement; or

                                       3
<PAGE>

     (c) the breach by such Member of its covenant in Section 9.01 of the
Operating Agreement or the breach by the Parent of such Member of its covenant
in Section 6.01(c) of the Master Agreement, provided that a Change of Control of
Member or of a Parent shall not be deemed a event of default.

     "Fiscal Quarter" means, unless changed by the Operating Committee, a
calendar quarter.

     "Fiscal Year" means, unless otherwise required by the Code or applicable
Treasury Regulations, the one year period commencing on April 1 of each year.

     "Foundry Agreements" means, collectively, the DSC Foundry Agreement and the
Yokkaichi Foundry Agreement.

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

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

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

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

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

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

     "Indebtedness" of any Person means, without duplication:

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

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

                                       4
<PAGE>

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

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

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

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

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

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

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

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

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

     "Initial Business Plan" means the initial business plan of the Company as
agreed to and adopted by the members concurrently with the execution of the
Master Agreement.

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

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

                                       5
<PAGE>

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

     "Master Agreement" means the Master Agreement dated as of May 9, 2000 by
and among Toshiba, SENA and SanDisK.

     "Member" means, in the case of the Company, each of SENA and SanDisk, and
any other Person who becomes a member in the Company in accordance with the
terms of the Operating Agreement.

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

     "Member Representative" means, with respect to the Company, a member of the
Operating Committee appointed pursuant to Section 5.01(b) of the Operating
Agreement.

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

     "Net Profits" and "Net Losses" means, subject to Section 7.02 of the
Operating Agreement, the taxable income and tax loss of the Company for Federal
income tax purposes for a given Fiscal Year, increased by the amount of any tax
exempt income of the Company during such Fiscal Year and decreased by the amount
of any Code Section 705(a)(2)(B) expenditures (within the meaning of Treasury
Regulation Section 1.704-1(b)(2)(iv)(i)) of the Company during such Fiscal Year;
PROVIDED, HOWEVER, that, in the case of Section 704(c) Property, depreciation
for each Fiscal Year shall be an amount equal to (I) the basis recovered for
such Fiscal Year under the rules prescribed by Regulation Section 1.704-3(d) if
the remedial method is adopted with respect to such Section 704(c) Property and
(II) in all other cases, (x) the depreciation for Federal income tax purposes
with respect to such Section 704(c) Property for such Fiscal Year multiplied by
(y) a fraction (i) the numerator of which is the fair market value of such
Section 704(c) Property on the date of contribution or revaluation and (ii) the
denominator of which is the basis of such Section 704(c) Property on the date of
contribution or revaluation for Federal income tax purposes; and PROVIDED
FURTHER, HOWEVER, that if the basis of such Section 704(c) Property for Federal
income tax purposes is zero, depreciation for each Fiscal Year shall be computed
under any reasonable method in accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(G)(3) that is approved by both Members.

                                       6
<PAGE>

To the extent an adjustment to the adjusted tax basis of any Partnership asset
pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to
Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in
determining Capital Accounts as a result of a distribution other than in
complete liquidation of a Member's interest, the amount of such adjustment shall
be treated as an item of gain (if the adjustment increases the basis of the
asset) or loss (if the adjustment decreases the basis of the asset) from the
disposition of the asset and shall be taken into account for purposes of
computing Net Profits or Net Losses.

     "Operating Agreement" means the Operating Agreement dated as of the Closing
Date between SanDisk and SENA.

     "Operating Committee" means the management committee of the Company
established pursuant to Section 5.01(a) OF the Operating Agreement.

     "Operative Documents" means the Operating Agreement, the Master Agreement,
the Amendment to Patent License Agreement, the Articles, the Yokkaichi Foundry
Agreement, the Environmental Indemnity Agreement, the Common R&D and
Participation Agreement, the Product Development Agreement and, when executed,
the DSC Foundry Agreement.

     "Parent" means Toshiba and SanDisk and each of them.

     "Percentage" means, with respect to SENA, 50.1%, and with respect to
SanDisk, 49.9%; PROVIDED, HOWEVER, if either Member transfers its entire
Membership Interest to any Affiliate in accordance with the Operating Agreement,
its Percentage shall be 0% and such Affiliate transferee shall receive the
entire Percentage of the transferring Member.

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

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

     "Purchase and Supply Agreement" means that certain Purchase and Supply
Agreement to be entered into in connection with the Master Agreement, by and
among the Company, SENA and SanDisk.

     "SanDisk" means SanDisk Corporation, a Delaware corporation.

                                       7
<PAGE>

     "Seconded Employee" means an individual who was originally an employee of a
Member or any of its Affiliates and who was assigned to the Company or any of
its Subsidiaries by such Member or such Affiliate at the request of such Member
as contemplated by Section 7.07 of the Master Agreement.

     "Section 704(c) Property" means any property contributed to the Company
that has a tax basis for Federal income tax purposes on the date of its
contribution that differs from its fair market value on such date and any
Company property that is revalued pursuant to Section 7.01(b) of the Operating
Agreement. For purposes of calculating Net Profits or Net Losses arising from
any Capital Transaction involving Section 704(c) Property, the basis of such
Section 704(c) Property shall be deemed to be its fair market value on the date
of contribution or revaluation less the accumulated depreciation (calculated in
accordance with the provisos to the definition of Net Profits and Net Losses)
arising after that date with respect to such Section 704(c) Property.

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

     "Subsidiary" of any Person means any other Person:

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

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

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

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

     "Toshiba" means Toshiba Corporation, a Japanese corporation.

                                       8
<PAGE>

     "Transfer" means any transfer, sale, assignment, conveyance, creation
(whether or not voluntary) of any Lien (other than a Permitted Lien), or other
disposal or delivery, including by dividend or distribution, whether made
directly or indirectly, voluntarily or involuntarily, absolutely or
conditionally, or by operation of law or otherwise.

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

     "Yokkaichi" means Toshiba's manufacturing facility located at Yokkaichi,
Japan.

     "Yokkaichi Foundry Agreement" means the Foundry Agreement dated as of May
9, 2000 between Toshiba and SanDisk Limited (Japan).

                                   ARTICLE II

                RULES OF CONSTRUCTION AND DOCUMENTARY CONVENTIONS

     SECTION 2.01 AMENDMENT AND WAIVER. (a) No amendment to or waiver of any
agreement or instrument incorporating these Rules of Construction and
Documentary Conventions shall be effective unless it shall be in writing,
identify with specificity the provisions of the applicable agreement or
instrument that are thereby amended or waived and be signed by each party
thereto. Any failure of a party to comply with any obligation, covenant,
agreement or condition contained in such agreement or instrument may be waived
by the party entitled to the benefits thereof only by a written instrument duly
executed and delivered by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure of compliance.

     SECTION 2.02 SEVERABILITY. If any provision of any agreement or instrument
incorporating these Rules of Construction and Documentary Conventions or the
application of any such provision is invalid, illegal or unenforceable in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision of such agreement or instrument (except as may be expressly
provided in such agreement or instrument) or invalidate or render unenforceable
such provision in any other jurisdiction. To the extent permitted by applicable
law, the parties waive any provision of law that renders any provision of such
agreement or instrument invalid, illegal or unenforceable in any respect. The
parties shall, to the extent lawful and practicable, use their reasonable
efforts to enter into arrangements to reinstate the intended benefits, net of
the intended burdens, of any such provision held invalid,

                                       9
<PAGE>

illegal or unenforceable. If the intent of the parties for entering into the
Operative Documents, considered as a single transaction, cannot be preserved,
the Operative Documents shall either be renegotiated or terminated.

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

     SECTION 2.04 ASSIGNMENT. Except as may otherwise be specifically provided
in any agreement or instrument incorporating these Rules of Construction and
Documentary Conventions, a party thereto shall not transfer, or grant or permit
to exist any Lien (except Permitted Liens) on, such agreement or instrument or
any of its rights thereunder (except for any transfer to an Affiliate or in
connection with a merger, consolidation or sale of all or substantially all the
assets or the outstanding securities of such party, which transfer shall not
require any consent of the other parties) without the prior written consent of
each other party thereto (which consent may be withheld in each such other
party's sole discretion), and any such purported transfer or Lien without such
consent shall be void.

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

     (a) Except as may otherwise be specifically provided in any agreement or
instrument incorporating these Rules of Construction and Documentary
Conventions, the rights and remedies of the parties under such agreement or
instrument are cumulative and are not exclusive of any rights or remedies which
the parties would otherwise have. Equitable relief, including the remedies of
specific performance and injunction, shall be available with respect to any
actual or attempted breach of such agreement or instrument; PROVIDED, HOWEVER,
in the absence of exigent circumstances,

                                       10
<PAGE>

the parties shall refrain from commencing any lawsuit or seeking judicial relief
in connection with such actual or attempted breach that is contemplated to be
addressed by the dispute resolution process set forth in Section 10.03 of the
Master Agreement until the parties have attempted to resolve the subject dispute
by following said dispute resolution process to its conclusion.

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

     SECTION 2.06 PARTIES IN INTEREST; LIMITATION ON RIGHTS OF OTHERS. Any
agreement or instrument incorporating these Rules of Construction and
Documentary Conventions shall be binding upon and inure to the benefit of the
parties thereto and their permitted successors and assigns. Nothing in any such
agreement or instrument, whether express or implied, shall give or be construed
to give any Person (other than the parties thereto and their permitted
successors and assigns) any legal or equitable right, remedy or claim under or
in respect of such agreement or instrument, unless such Person is expressly
stated in such agreement or instrument to be entitled to any such right, remedy
or claim.

     SECTION 2.07 TABLE OF CONTENTS; HEADINGS. The Table of Contents and Article
and Section headings to any agreement or instrument incorporating these Rules of
Construction and Documentary Conventions are for convenience of reference only
and shall not affect the construction of or be taken into consideration in
interpreting any such agreement or instrument.

     SECTION 2.08 COUNTERPARTS; EFFECTIVENESS. Any agreement or instrument
incorporating these Rules of Construction and Documentary Conventions may be
executed by the parties thereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which counterparts shall
together constitute but one and the same contract. Any agreement or instrument
incorporating these Rules of Construction and Documentary Conventions shall not
become effective until one or more counterparts have been executed by each party
thereto and delivered to the other parties thereto.

     SECTION 2.09 ENTIRE AGREEMENT. Any agreement or instrument incorporating
these Rules of Construction and Documentary Conventions, together with the other
Operative Documents and the Exhibits, Schedules, Appendices

                                       11
<PAGE>

and Attachments thereto, any agreement entered into simultaneously therewith,
the Initial Business Plan constitute the agreement of the parties to the
Operative Documents with respect to the subject matter thereof and supersede all
prior written and oral agreements and understandings with respect to such
subject matter.

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

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

     Section 2.12 GOVERNING LAW. Any agreement incorporating these Rules of
Construction shall be governed and construed as to all matters including
validity, construction and performance by and under the substantive laws of the
State of California.

     SECTION 2.13 WAIVER OF JURY TRIAL AND CERTAIN DAMAGES. Each party to any
Operative Document incorporating these Rules of Construction and Documentary
Conventions waives, to the fullest extent permitted by applicable law, (i) any
right it may have to a trial by jury in respect of any action, suit or
proceeding

                                       12
<PAGE>

arising out of or relating to any Operative Document and (ii) absent fraud, any
right it may have to receive damages or indemnification from any other party to
any Operative Document in respect of any act, omission or event relating to such
Operative Document or the transactions contemplated by the Operative Documents
based on any theory of liability for any special, indirect, consequential or
punitive damages. Each party to any such agreement or instrument (x) certifies
that no representative, agent or attorney of another party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and (y) acknowledges that it
has been induced to enter into such agreement or instrument by, among other
things, the mutual waivers and certifications set forth above in this Section
2.12

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

     SECTION 2.15 NOTICES. All notices and other communications to be given to
any party under any agreement or instrument incorporating these Rules of
Construction and Documentary Conventions shall be in writing and any notice
shall be deemed received when delivered by hand, courier or overnight delivery
service, or by facsimile (if confirmed within two Business Days by delivery of a
copy by hand, courier or overnight delivery service), or five days after being
mailed by certified or registered mail, return receipt requested, with
appropriate postage prepaid and shall be directed to the address of such party
specified below (or at such other address as such party shall designate by like
notice):

     (a) If to SanDisk:

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

                                       13
<PAGE>

             With a copy to:

             SanDisk Corporation
             140 Caspian Court
             Sunnyvale, CA  94089
             Telephone: (408) 548-0208
             Facsimile: (408) 548-0385

             Vice President and General Counsel

     (b) If to Toshiba:

             Toshiba Corporation
             Semiconductor Company
             1-1 Shibaura 1-Chome
             Minato-Ku, Tokyo 105-8001 Japan
             Telephone:       011 81 3 3457 3378
             Facsimile:       011 81 3 5444 9339
             Attention of President

             With a copy to:

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

     (c) If to the Company:

             FlashVision, L.L.C.
             9600 Godwin Drive
             Manassas, Virginia 20110
             Telephone: (703) 396-1095
             Facsimile: (703) 396-1075
             Attention of: President

                                       14
<PAGE>

             With a copy to:

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

             And

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

     (d) If to SENA:

             Semiconductor of North America, Inc.
             9775 Toledo Way
             P.O. Box 19785
             Irvine, California 92718-1811
             Telephone:       (714) 455-2000
             Facsimile:       (714) 586-9741
             Attention of President

     SECTION 2.16 DEFINITIONS. The definitions set forth in Article I of this
Appendix A shall apply to this Article II.

                                       15<PAGE>   1
                                                                    EXHIBIT 10.1

                               FOUNDRY AGREEMENT

This Agreement (the "Agreement") is entered into this 22 day of June, 2000 by
and between

Global Communication Semiconductor, Inc. hereinafter referred to as "GCS"

and

Stanford Microdevices Inc. hereinafter referred to "SMDI".

GCS desires to sell, and SMDI desires to buy, semiconductor wafers to be
manufactured by GCS on the [***] InGaP/GaAs HBT process using SMDI proprietary
designs, pursuant to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the parties agree as follows:

1.    SCOPE OF FOUNDRY SERVICE

      1.1  The [***] InGaP/GaAs HBT process (described in "Exhibit E")
           co-developed by GCS and SMDI shall be offered exclusively to SMDI for
           a period of [***] from the start of wafer development. In return for
           the exclusivity, SMDI will commit to buying [***] wafers during the
           first [***] months of production. The exclusivity will be based upon
           meeting the above objectives with [***] wafers to be delivered in
           2000 and the balance ([***] wafers) to be delivered in 2001.
           Exclusivity is forfeited if these objectives are not met. The process
           is deemed production when it has successfully completed a
           2-temperature life test with activation energy and MTTF sufficient to
           meet SMDI's product requirements. The cost of the qualification shall
           be the responsibility of SMDI. After the agreed period of [***]
           months, GCS can offer this process as an open foundry process to any
           other customer.

      1.2  Subject to the terms and conditions contained in Article 12 of this
           Agreement, SMDI and GCS hereby will disclose know-how, copyrights and
           mask work rights to make and have made wafers (as defined in Exhibit
           A) at the GCS fabrication facility in Torrance, CA. in accordance
           with the Wafer Specifications set forth in Exhibit B, to test such
           wafers, and to sell such wafers only to SMDI at the prices
           established in Exhibit A.

           "Know-how", when used in this Agreement, shall mean all of SMDI
           designs, techniques, technology, trade secrets, proprietary
           information and other confidential information disclosed by SMDI to
           GCS pursuant to this Agreement which SMDI, at its sole discretion,
           determines is necessary for GCS to produce wafers under this
           Agreement.

           GCS shall provide appropriate masks, wafer processing of engineering
           runs and product validation runs (multi-project wafers) at the prices
           per Exhibit A.

2.    PAYMENT

      2.1  SMDI shall pay in United States Dollars for wafers supplied by GCS to
           SMDI hereunder within thirty (30) days after SMDI receipt of an
           invoice from GCS which shall be submitted to SMDI upon shipment.

*** Certain information on this page has been omitted and filed separately with
    the Commission. Confidential treatment has been requested with respect to
    the omitted portions.
<PAGE>   2

      2.2  SMDI shall bear all costs to produce the initial mask set necessary
           to produce any specific product, or mask changes to complete design
           or process changes initiated by SMDI. SMDI shall bear all costs for
           replacement masks or new masks to complete product changes initiated
           by SMDI as well as all costs for replacement of masks worn during
           production at GCS.

3.    ORDERS, WARRANTY AND CLAIMS

      3.1  GCS shall supply wafers and other production services to SMDI in
           accordance with written purchase orders to be provided by SMDI. Each
           purchase order shall include the following:

           (a) purchase order number
           (b) product name
           (c) manufacturing process
           (d) quantities
           (e) unit wafer prices and total prices
           (f) desired shipment date (subject to Section "DELIVERY TIMES" below)
           (g) delivery instructions
           (h) any special requests or comments

           Subject orders shall become effective only upon the written
           acceptance thereof by GCS.

           The terms of this Agreement shall prevail over any conflicting terms
           in any order documents, invoices or similar documents exchanged
           between the parties hereunder.

      3.2  SMDI shall provide GCS every month with a good faith rolling forecast
           of its wafer and other production service requirements on a monthly
           basis, and GCS shall use its best efforts to make available to SMDI
           sufficient fabrication capacity and engineering support to meet such
           forecast requirements. In addition to the status reports established
           under Section 5 below, the parties shall provide one another with
           reasonable notice about changes in desired shipping or production
           schedules, availability of capacity or other similar situations. The
           SMDI forecast is considered a firm order for the period of 0-90 days,
           can change by 50% in the period of 91-120 days and can vary by 100%
           for the period >120 days.

      3.3  Any other provision of this Agreement notwithstanding, if GCS shall
           be delayed more than sixty (60) days in the production and delivery
           of wafers for any particular SMDI purchase order, unless delay was
           caused by SMDI, SMDI may, at its reasonable discretion, provided that
           GCS is unable to provide a recovery program acceptable to SMDI,
           cancel such order effective upon written notice thereof to GCS. Upon
           resubmission of any such cancelled order by SMDI and acceptance
           thereof by GCS, GCS shall then use its best efforts to give a
           priority delivery date to such new order. If GCS delays, unless delay
           was caused by SMDI, production and delivery more than sixty (60) days
           beyond the factory committed delivery date, three (3) or more SMDI
           purchase orders in any six (6) month period under this Agreement,
           SMDI may terminate this Agreement immediately by sending notice of
           termination to GCS.

      3.4  GCS gives warranty on workmanship and material for [***] months. In
           case of warranty claims by SMDI, the GCS warranty is limited to the
           replacement of wafers.

      3.5  Standard GCS Terms & Conditions (Exhibit D) apply if not otherwise
           specified in the contract.

4.    DELIVERY TIMES

*** Certain information on this page has been omitted and filed separately with
    the Commission. Confidential treatment has been requested with respect to
    the omitted portions.

<PAGE>   3

      4.1  Unless otherwise agreed to in writing by SMDI, delivery times for
           SMDI purchase orders shall be:

           (a) [***] weeks for production wafers
           (b) [***] weeks for product development wafers (not including mask
               preparation and procurement time)

           GCS shall use its best efforts to achieve such delivery times on a
           regular and consistent basis. However, since these delivery times
           correspond to the actual production cycles for wafers, no recovery
           may be possible in case of accidental misprocessing of wafer lots.

      4.2  In the event of a third party suit or claim against SMDI and/or GCS
           involving a Third Party Right (as defined in Section 14), GCS may, at
           its reasonable discretion and upon advice of its legal counsel,
           suspend or terminate the production and supply of any wafers to SMDI
           if such continued production and supply would or could cause GCS to
           violate such Third Party Right. GCS shall discuss any such suspension
           or termination with SMDI and shall give due opportunity for SMDI to
           satisfy the provisions of Section 14, prior to the implementation
           thereof.

5.    STATUS REPORTS

      5.1  Upon request from SMDI, GCS shall provide SMDI with work-in-process
           status reports with projections of wafer-out dates per SMDI purchase
           order requirements.

      5.2  Any deviations from acknowledged delivery dates due to unforeseen
           manufacturing problems shall be reported to SMDI within 3 working
           days when such problems become apparent.

6.    PROCESS CHANGES

      6.1  Either party may request the other party to accept changes in the
           production process for wafers, provided, however, that any material
           changes to the production process for wafers that has been previously
           approved by SMDI (including changes to procedures, flow or
           specifications), may only be made if such changes are first approved
           in writing by SMDI which approval shall not be unreasonably withheld.

      6.2 Changes requiring written approval are major changes as described in
          Exhibit C.

7.    INTELLECTUAL PROPERTY

      7.1  GCS acknowledges and agrees that SMDI shall own all rights,
           including, without limitation, all patent rights, copyrights, trade
           secret rights, and maskworks and similar rights, in and to the wafers
           and other products produced by GCS for SMDI hereunder, and in the
           know-how disclosed by SMDI to GCS hereunder. GCS shall own all rights
           in and to the production process and all know-how independently
           developed by GCS, including, without limitation, all patent rights,
           copyrights, trade secret rights, and similar rights used in the
           manufacturing of the wafers. SMDI and GCS acknowledge that GCS is
           acting only as a wafer foundry.

8.    DISCONTINUATION OF PRODUCTION

      8.1  In the event SMDI cannot utilize all processed wafers, GCS will stop
           production immediately upon written notice of SMDI and advise the
           work-in-process status to SMDI. In lieu of paying the purchase order
           value for completed wafers, the following price for work in-process
           will be paid:

*** Certain information on this page has been omitted and filed separately with
    the Commission. Confidential treatment has been requested with respect to
    the omitted portions.
<PAGE>   4

           (a)  For any wafers from wafer start up to the first interconnect
                level [***]
           (b)  For any wafers processed from first interconnect level up
                through frontside [***]
           (c)  For any wafers processed beyond frontside [***]

           The percentages above relate to the wafer prices per Exhibit A.

      8.2  GCS agrees to provide to SMDI a five (5) year lifetime buy option
           upon notification that GCS will obsolete or upgrade its wafer
           fabrication process. GCS will provide notification at least six (6)
           months in advance prior to time of obsolescence or major process
           change. Delivery of wafers ordered under this provision will be at a
           mutually agreeable rate.

      8.3  One (1) year after the final production, GCS may scrap the SMDI masks
           or send the masks to SMDI.

9.    GCS QUALITY INSPECTION

      9.1  GCS shall ship only such wafers that have passed visual inspection
           and electrical testing (PCM) by GCS, in accordance with the
           specifications set forth in Exhibit B (the "GCS Foundry
           Specifications").

      9.2  SMDI shall be entitled upon any reasonable written request and during
           normal business hours, and at its sole expense, to witness inspection
           and testing of all wafers manufactured by GCS for SMDI under this
           Agreement and to review the GCS quality control system to monitor the
           quality of wafers manufactured. If corrective actions require
           follow-up, additional, directly related reviews are permitted. SMDI
           personnel, in conducting such inspections or reviews, shall be bound
           by GCS rules at its plants regarding visits by outside personnel.

      9.3  GCS shall keep and provide reasonable access by SMDI to all GCS test,
           inspection, and processing records maintained for a wafer lot
           processed, for SMDI on the same terms as it handles its standard
           production records for other customers. GCS shall not destroy records
           pertaining to the wafers within 18 months of their creation, and
           without first giving SMDI thirty (30) days written notice of such
           intended destruction and the right to obtain copies of such records
           for SMDI own files providing SMDI, at SMDI expense.

      9.4  If GCS experiences any unusual technical problems in manufacturing
           wafers pursuant to this Agreement, GCS may request that SMDI assist
           GCS in resolving such technical problems, and SMDI shall use its best
           efforts to assist GCS in resolving such problems. If SMDI personnel
           are requested by GCS to travel to GCS facilities to assist GCS in
           resolving such technical problems, SMDI shall bear all of its own
           costs for personnel and travel expenses. GCS will provide adequate
           technical equipment for carrying out effective analyses of the
           technical problems to SMDI personnel while working at GCS facilities.

      9.5  Should GCS discover or be informed about a condition that may affect
           the quality of reliability of wafers in process or shipped to SMDI,
           GCS will notify SMDI immediately in writing and present to SMDI all
           pertinent data.

10.   SMDI QUALITY INSPECTION

      10.1 SMDI shall conduct its own visual inspection of shipped wafers
           within ten (10) business days after receipt thereof by SMDI. If any
           wafers shipped by GCS do not pass such mutually agreed upon
           Inspection criteria, SMDI shall immediately notify GCS in writing of
           the rejection of such shipment and the lot number(s) affected, and
           the specific defect or deficiency identified by the inspection. SMDI

*** Certain information on this page has been omitted and filed separately with
    the Commission. Confidential treatment has been requested with respect to
    the omitted portions.

<PAGE>   5

            shall hold such materials in a safe and secure facility and make
            them available for inspection by GCS, subject to Section 10.5.

      10.2  If appropriate GCS may direct SMDI to return such defective
            materials to GCS for further inspection, testing or other
            procedures. Any such direction shall be accomplished by an GCS
            Return Material Authorization ("RMA"), including a specific tracer
            number to be prominently displayed on the shipping container for
            such returned materials. Upon issuance of an RMA, SMDI shall
            promptly ship such materials together with all relevant data from
            the SMDI inspection to the designated GCS facility, freight and
            insurance prepaid, in the original shipping container or containers
            of equivalent protective nature.

      10.3  SMDI may return such wafers hereunder for a credit and may recover
            its return shipping and insurance expenses from GCS if, and only if,
            defects in such materials actually exist as indicated in the SMDI
            rejection notice and were not caused by SMDI own misuse unauthorized
            modifications, neglect, improper testing, attempts to repair, or by
            accident, fire or other hazard, while such materials are in the
            possession or control of SMDI. Defects caused by a third party (such
            as shipping carrier) need to be addressed an insurance claim.

      10.4  GCS and SMDI acknowledge that some wafers which do not meet Wafer
            Specifications and/or are broken may nevertheless still be expected
            to yield a functional and reliable product. If SMDI elects to
            purchase such below-specification wafers, SMDI shall be entitled to
            a partial credit against the GCS invoice amount as may be reasonably
            agreed upon in writing by SMDI and GCS. If SMDI and GCS fail to
            agree upon a partial credit amount, then the below-specification
            wafers shall be returned to GCS at GCS's expense for destruction.
            GCS shall not sell or provide access to such wafers to any third
            party.

      10.5  SMDI and GCS agree that conformance to the specifications within
            this document does not necessarily indicate the wafers are free of
            defects in material and/or workmanship, and that subsequent
            processing or testing may uncover such defects in material and/or
            workmanship. Within the warranty period of such nature shall be made
            by SMDI no later than 30 working days after the first indication of
            a potential problem to SMDI and GCS agrees to use its best efforts
            to correct such defects and provide SMDI with a reasonable amount of
            data or information to effect a cure.

      10.6  Any other provision of this Agreement to the contrary
            notwithstanding, no claim by SMDI with respect to wafers or services
            delivered to SMDI thereunder shall be greater in amount than the
            purchase price of the order in respect of which damages are claimed.
            IN NO EVENT SHALL GCS BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL,
            INDIRECT OR SPECIAL DAMAGES, HOWEVER CAUSED, WITH REGARD TO ANY
            WAFERS OR SERVICES DELIVERED HEREUNDER. REGARDLESS OF WHETHER GCS
            HAS BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGES OR NOT.

11.   DELIVERY QUANTITIES

      11.1 Delivery quantities will match with ordered quantities as closely as
           possible; however, wafer shipments will always be done in integer
           multiples of production lots for the sake of lot traceability. A
           production lot is currently TBD (TBD) wafers. SMDI will, whenever
           possible, place orders in integer multiples of production lots and
           GCS will deliver and invoice the actually accomplished number of
           wafers.

12.   CONFIDENTIALITY

<PAGE>   6

      12.1  Each party acknowledges that the information disclosed in connection
            with any transactions contemplated hereunder will contain the
            Confidential Information and trade secrets of the disclosing party,
            and will remain the property of the disclosing party ("Confidential
            Information"). A party receiving any Confidential Information of the
            other party shall take all reasonable measures to keep and hold any
            such Confidential Information of the other party in strict
            confidence as it would be its own Confidential Information and shall
            not disclose such Confidential Information of the other party to any
            person, firm or corporation without the prior written consent of the
            party disclosing such Confidential Information. A party receiving
            Confidential Information of the other party shall not, except as may
            be authorized hereafter in writing by the disclosing party, use any
            Confidential Information of the other party for any purpose not
            stated in this Agreement.

      12.2  A party receiving Confidential Information of the other party shall
            limit dissemination of and access to any Confidential Information of
            the other party to those employees or consultants of the receiving
            party who have a good faith need for such access to effectuate the
            purpose of this Agreement and who have executed a standard
            non-disclosure agreement with the receiving party.

      12.3  The obligations of the receiving party described in this Section
            shall survive termination or expiration of this Agreement and shall
            continue in full force and effect with respect to any information as
            long as it remains Confidential Information under this Section 12.

      12.4  A party receiving Confidential Information of the other party may
            disclose such information to subcontractors upon the prior written
            approval of the other party. If such disclosure is necessary to
            perform duties under this Agreement. This approval shall not be
            unreasonably withheld. The receiving party shall cause its permitted
            subcontractors to sign a confidentiality agreement with
            substantially the same terms and conditions of this Section prior to
            disclosing Confidential Information of the other party to such
            subcontractors.

      12.5  Neither party shall have the obligation to the other party with
            respect to any information of the other party of any portion thereof
            which is:

            (a)   already known to the receiving party at the time of receiving
                  same as shown by the receiving party's files and records in
                  existence at the time of disclosure;

            (b)   or hereafter becomes publicly known through no wrongful act of
                  the receiving party;

            (c)   rightfully received from a third party without restriction on
                  disclosure and without breach of this Agreement;

            (d)   now or hereafter independently developed by the receiving
                  party and without reliance in any degree upon any Confidential
                  Information of the other party;

            (e)   furnished by the disclosing party to a third party without any
                  restriction upon disclosure comparable to that set forth in
                  this Agreement; or

            (f)   revealed pursuant to a requirement of a governmental agency or
                  law, provided that the receiving party provides prompt written
                  notice of such requirement or law so as to afford the
                  disclosing party an opportunity to intervene and oppose
                  disclosure.

      12.6  The parties agree that any material breach of Section 12 will
            cause irreparable injury and that injunctive relief in a court of
            competent jurisdiction will be appropriate to prevent either an
            initial or continuing

<PAGE>   7

           breach of such nondisclosure and confidentiality provisions herein in
           addition to any other relief to which the owner of such Confidential
           Information may be entitled.

13.   TERM

      13.1 This Agreement may be terminated by SMDI or GCS upon written notice
           to the other party:

           (a)    in the event the other party files a petition in bankruptcy,
                  or in the event all or part of the other party's assets are
                  assigned to a trustee or receiver, or if an involuntary
                  petition in bankruptcy is filed by a third party and the other
                  party does not resolve such petition in its favour within
                  sixty (60) days after filing and notice thereof; or

           (b)    in the event of a substantial breach of a material term of
                  this Agreement not remedied by the other party in breach
                  within thirty (30) days after receipt of written notice by the
                  terminating party specifying such breach and requesting that
                  it be remedied.

           (c)    immediately for any violations or Section 12.

      13.2 IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY LOST PROFITS OR ANY
           CONSEQUENTIAL, INCIDENTAL, INDIRECT, OR SPECIAL DAMAGES, HOWEVER
           CAUSED, AND ON ANY THEORY OF LIABILITY, ARISING OUT OF THE
           TERMINATION OF THIS AGREEMENT.

      13.3 GCS shall not be liable for any damages caused by SMDI products, as a
           result of design, packaging or testing.

      13.4 This agreement shall be in effect for 60 months and shall be self
           renewing annually. Should GCS decide to not renew this agreement the
           discontinuation of production clause (8.2) becomes valid.

14.   INFRINGEMENT

      14.1  SMDI warrants to GCS that SMDI owns the know-how, copyrights,
            maskwork rights, and other intellectual rights to enable GCS to
            produce the wafers for SMDI lawfully. SMDI hereby indemnifies and
            holds GCS and its directors, officers, employees and agents harmless
            from any claim, suit or other liability (including reasonable
            attorneys, fees and costs) arising out of or resulting from a
            material breach of the foregoing warranty.

      14.2  GCS warrants to SMDI that GCS owns, or otherwise has the right to
            use, all applicable intellectual property rights to the
            manufacturing processes which will be used by GCS to produce the
            wafers. GCS hereby indemnifies and holds SMDI and its directors,
            officers, employees and agents harmless from any claim, suit or
            other liability (including reasonable attorneys, fees and costs)
            arising out of or resulting from a material breach of the foregoing
            warranty.

      14.3  In the event of the institution of any suit or claim against an
            indemnified party alleging that GCS manufacture of the wafers
            violates any circuit design patent or mask work, manufacturing
            process patent, or manufacturing process proprietary right of a
            third party recognized under the laws of the United States of
            America (hereinafter "Third Party Rights"), or shall become the
            subject of any claim for violation of Third Party Rights, the
            indemnified party shall promptly notify the indemnifying party of
            such suit or claim and provide reasonable details thereof. Failure
            to give such notice, if it materially impairs the ability of the
            indemnifying party to defend against such suit or claim, shall
            terminate any duty of indemnification under this Section.

<PAGE>   8

      14.4  The indemnifying party shall have sole control of any action or
            settlement negotiations relating to any such suit or claim, and the
            indemnified party shall render all cooperation reasonably requested
            by the indemnifying party in defense of such suit or claim, provided
            that the indemnified party may retain its own counsel at its own
            expense. The indemnified party shall not settle or attempt to settle
            any such suit or claim without the express written consent of the
            indemnifying party.

      14.5  In addition to its duty of indemnification hereunder, the
            indemnifying party may, at its sole discretion and expense:

            (a)   alter or change the circuit design or manufacturing process,
                  as may be the case, so as to make said design or process
                  non-infringing of any third Party Right; or

            (b)   obtain permission from the affected thirty party to use the
                  Third Party right, it being the intention of both parties to
                  continue the performance of this Agreement if commercially
                  reasonable to do so.

               If neither of these methods is appropriate to eliminate the
               infringement of the Third Party Right, the indemnifying party at
               its sole discretion may terminate this Agreement or withdraw the
               infringing products without any additional obligation or
               liability to the indemnified party, for lost opportunity or
               profits or otherwise, due to such termination.

15.   NOTICES

      15.1  Any and all notices or other communications required or permitted by
            this Agreement or by law to be served on or given to either party
            hereto by the other party shall be in writing and shall be deemed
            duly served and given when personally delivered to either of the
            parties to whom it is directed, or in lieu of such personal service,
            on the same day of transmission by telex or confirmed facsimile or
            seven (7) days after deposit in the mail, first class, postage
            prepaid, addressed to:

               Stanford Microdevices Inc.           GCS, Inc.
               522 Almanor Avenue                   23155 Kashiwa Ct.
               Sunnyvale, CA 94086                  Torrance, CA 90505
               Attn. of: Gerald L. Quinnell         Attn: Bill Vitez

           Either party may change the addresses above upon notice duly given in
           writing to the other party.

16.   ARBITRATION

      16.1  Except for any claim based upon an alleged or actual violation of
            Section 13 above with respect to confidentiality and non-disclosure,
            any dispute relating to the interpretation or performance of this
            Agreement or the grounds for the termination thereof shall be
            resolved at the request of either party through final and binding
            arbitration as set forth herein. Such arbitration shall be conducted
            by three (3) arbitrators, at least one (1) of whom shall have
            reasonable technical knowledge of and experience in the
            semiconductor industry, selected by the mutual agreement of the
            parties, or, failing such agreement, as selected according to the
            applicable rules specified below. The parties shall bear the costs
            of such arbitrators equally.

      16.2  Arbitration shall be conducted in Los Angeles, California, USA,
            under the Commercial Arbitration Rules of the American Arbitration
            Association (the "AAA"), except as superseded by the provisions of

<PAGE>   9

            this Section. The arbitration panel shall operate in all respects by
            a majority vote of the arbitrators. The parties shall be entitled to
            all discovery permitted under Section 1283.05 of the California Code
            of Civil Procedure, with all such discovery to be completed within
            ninety (90) days of the commencement of the arbitration. Upon
            completion of the arbitration hearing, the arbitrators shall
            promptly render their decision and award, which shall be in writing
            and which shall state the reasons for the conclusions reached.

      16.3  The arbitrators shall have the power to render any award for
            ordinary damages or injunctive relief but may not award punitive
            damages. If judicial enforcement or review of such arbitration award
            is sought by either party, judgement may be entered upon such award
            in any court of competent jurisdiction in the United States.

      16.4  The prevailing party in any such judicial enforcement, arbitration
            or review proceeding or in any other legal proceeding relating to
            the interpretation or performance of this Agreement or the grounds
            for termination thereof shall be entitled to its reasonable
            attorneys' fees and related other in addition to any other amount of
            recovery ordered by such court. For purposes of this Section, a
            "prevailing party" shall be that party which recovers more than
            one-half (1/2) of the amount set forth in its claim in the
            arbitration or which defeats the other party's claim by more than
            one-half, or which achieves a comparable result in respect of
            injunctive relief.

17.   MISCELLANEOUS

      17.1  This document constitutes the entire agreement of SMDI and GCS with
            regard to the subject matter hereof and supersedes all prior
            negotiations and agreements whether written or oral. The executed
            version of this Agreement and of any other documents prepared by the
            parties under this Agreement shall be controlling for all purposes.

      17.2  This Agreement may be amended only by a written document executed by
            authorized representatives of SMDI and GCS.

      17.3  No right may be assigned, and no duty may be delegated, by either
            party under this Agreement except upon the written consent of the
            other party, and any attempted assignment and delegation without
            such consent shall be void.

      17.4  Notwithstanding the foregoing, however, either party shall be
            entitled to assign this Agreement, and all rights and obligations
            hereunder, to a successor to all or substantially all of its assets,
            whether by sale, merger, or otherwise, provided that either party
            indicating such assignment shall provide the other party with at
            least thirty (30) days prior written notice and cause such assignee
            to be bound by this Agreement. This agreement shall be binding upon
            and shall inure to the benefit of the parties hereto and their
            respective representatives, heirs, administrators, successors and
            permitted assigns except as otherwise provided herein.

      17.5  The headings contained in this Agreement are for reference purposes
            only and shall not affect in any way the meaning or interpretation
            of this Agreement.

      17.6  Neither party shall be responsible or liable to the other party for
            non-performance or delay in performance of any terms or conditions
            of this Agreement due to acts of God, acts of governments, wars,
            riots, strikes or other labour disputes, shortages of labour or
            materials, or other causes beyond the reasonable control of the
            non-performing or delayed party, provided, however, non-performance
            or delay in excess of one hundred eighty (180) days shall constitute
            cause for termination of this Agreement by either party.

<PAGE>   10

      17.7  This Agreement may be executed in any number of counterparts, each
            of which shall be deemed an original, but such counterparts together
            shall constitute only one and the same instrument.

      17.8  Any waiver (express or implied) by either party of any breach of
            this agreement shall not constitute a waiver of any other or
            subsequent breach.

      17.9  In the event any provision of this Agreement is held to be invalid
            or unenforceable, the valid or enforceable portion thereof and the
            remaining provisions of this Agreement will remain in full force and
            effect.

      17.10 Each party hereto is an independent contractor of the other, and
            neither shall be deemed an employee, agent, partner or joint
            venturer of the other. Neither party shall make any commitment, by
            contract or otherwise, binding upon the other nor represent that it
            has any authority to do so.

      17.11 Each party shall obey all applicable laws and regulations in the
            performance of its respective duties and tasks under this Agreement
            and shall use its best efforts to assist the other party to do
            likewise.

      17.12 Each party shall designate a single management representative who
            shall be the primary point of contact for that party in its
            relations with the other party hereunder, and each party may change
            its representative from time to time upon prior written notice to
            the other party. Initially, the SMDI representative shall be Gerald
            L. Quinnell and the GCS representative shall be Bill Vitez.

      IN WITNESS WHEREOF the parties have caused this agreement to be executed
      by their respective duly authorized representatives.

FOR STANFORD MICRODEVICES                              FOR GCS

       GERALD L. QUINNELL

<PAGE>   11

                                    EXHIBIT A

                         PRICING AND QUANTITY COMMITMENT

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

                   PRODUCTION QUANTITIES OF [***] HBT PROCESS (FOR
                   BUDGETARY REASONS ONLY, FIRM PRICING WILL BE
                   DETERMINED AFTER THE ENGINEERING PHASE IS COMPLETE)

<S>                <C>                                                     <C>
      1            [***] WAFERS                                    [***] / wafer

      2            [***] WAFERS                                    [***] / wafer

      3            [***] WAFERS                                    [***] / wafer

      4            [***] WAFERS                                    [***] / wafer

      5            [***] WAFERS                                    [***] / wafer

      6            GREATER THAN [***] WAFERS                       [***] / wafer
---------------- ------------------------------------------------------- --------------------
</TABLE>

*** Certain information on this page has been omitted and filed separately with
    the Commission. Confidential treatment has been requested with respect to
    the omitted portions.
<PAGE>   12

                                    EXHIBIT B

                               PRODUCT DESCRIPTION

                   TBD: WILL DECIDE WHEN PRODUCTION IS READY.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
PARAMETER                          UNIT      MIN       TYP       MAX
--------------------------------------------------------------------------------
<S>                                <C>       <C>       <C>       <C>
</TABLE>

<PAGE>   13

                                    EXHIBIT C

Major changes are as listed below.

<TABLE>
<S>                <C>
          -------- --------------------------------------------------------------------
          1        CHANGES IN WAFER FABRICATION
          -------- --------------------------------------------------------------------
          1.1      Sequence of fabrication process cycles
          -------- --------------------------------------------------------------------
          1.2      Fabrication process material
          -------- --------------------------------------------------------------------
          1.3      Doping process
          -------- --------------------------------------------------------------------
          1.4      Passivation material, thickness
          -------- --------------------------------------------------------------------
          1.5      Metallization system (pattern, material, line width, or thickness)
          -------- --------------------------------------------------------------------
          1.6      Conductor, resistor or dielectric material
          -------- --------------------------------------------------------------------
          1.7      Wafer fabrication move to another line
          -------- --------------------------------------------------------------------
          1.8      Backside process including metallization and finished thickness
          -------- --------------------------------------------------------------------
          1.9      Ohmic contact formation
          -------- --------------------------------------------------------------------
          1.10     Die size
          -------- --------------------------------------------------------------------
</TABLE>

All other changes are considered to be minor changes, unless otherwise mutually
agreed on in writing.

<PAGE>   14

                                    EXHIBIT D

                         STANDARD GCS TERMS & CONDITIONS

           -   PAYMENT TERMS: NET 30

           -   FOB: SHIP POINT, GCS TORRANCE, CA

           -   METHOD OF SHIPMENT: CUSTOMER'S FREIGHT ACCOUNT PREFERRED

           -   ANY AND ALL CHANGES TO PURCHASE ORDERS, RELEASES, DOE'S OR ANY
               OTHER DESCRIPTIONS OF WORK MUST BE DONE IN WRITING AND APPROVED.

<PAGE>   15

                                    EXHIBIT E

[***]

[***]

*** Certain information on this page has been omitted and filed separately with
    the Commission. Confidential treatment has been requested with respect to
    the omitted portions.

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