Document:

<PAGE>

                                                                   Exhibit 10.34
================================================================================

                               OPERATING AGREEMENT

                             Dated as of May 9, 2000

                                     between

                        SEMICONDUCTOR NORTH AMERICA, INC.

                                       and

                               SANDISK CORPORATION

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

<PAGE>

<TABLE>
<CAPTION>
                                                      TABLE OF CONTENTS

                                                                                                                PAGE
                                                                                                                ----
<S>               <C>                                                                                           <C>
ARTICLE I.        Definitions, Rules of Construction and Documentary Conventions..............................   1

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

SECTION 1.02      Additional Definitions......................................................................   1

SECTION 1.03      Rules of Construction and Documentary Conventions...........................................   2

ARTICLE II.       General Provisions..........................................................................   2

SECTION 2.01      Formation...................................................................................   2

SECTION 2.02      Name........................................................................................   2

SECTION 2.03      Registered Office and Registered Agent and Principal Office.................................   2

SECTION 2.04      Term; Extension.............................................................................   3

SECTION 2.05      Entity Declaration..........................................................................   3

SECTION 2.06      Scope of Activity...........................................................................   3

SECTION 2.07      Powers......................................................................................   3

SECTION 2.08      Property Ownership..........................................................................   3

SECTION 2.09      Company Actions.............................................................................   3

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

SECTION 3.01      Business Dealings with the Company..........................................................   4

SECTION 3.02      Other Activities............................................................................   4

SECTION 3.03      Seconded Employees..........................................................................   5

SECTION 3.04      Business Plans and Related Matters..........................................................   5

SECTION 3.05      Standard of Care............................................................................   6

SECTION 3.06      Use of Names................................................................................   6

ARTICLE IV.       Actions by the Members......................................................................   6

SECTION 4.01      Matters Requiring the Consent of the Members................................................   6

SECTION 4.02      Restrictions on Members.....................................................................   9

                                       i
<PAGE>
SECTION 4.03      Meetings of Members.........................................................................   9

ARTICLE V.        Management and Operations of Company........................................................   9

SECTION 5.01      Operating Committee as Managers.............................................................   9

SECTION 5.02      Officers; Employees.........................................................................  15

SECTION 5.03      Insurance...................................................................................  16

SECTION 5.04      Records.....................................................................................  16

ARTICLE VI.       Capital Contributions; Distributions........................................................  17

SECTION 6.01      Capital Contributions.......................................................................  17

SECTION 6.02      Distributions...............................................................................  17

SECTION 6.03      No Interest.................................................................................  18

SECTION 6.04      Return of Capital Contributions.............................................................  18

ARTICLE VII.      Capital Accounts and Allocations of Profit and Loss.........................................  18

SECTION 7.01      Capital Accounts............................................................................  18

SECTION 7.02      Allocation of Net Profits and Net Losses....................................................  19

SECTION 7.03      Distribution in Kind........................................................................  20

SECTION 7.04      Depreciation Recapture......................................................................  20

SECTION 7.05      Allocation Between Transferor and Transferee Members........................................  20

SECTION 7.06      Federal Income Tax Allocations..............................................................  20

SECTION 7.07      Fiscal Year.................................................................................  21

SECTION 7.08      Elections...................................................................................  21

ARTICLE VIII.     Accounting and Taxation.....................................................................  21

SECTION 8.01      Accrual Basis; Financial Accounting Conventions...............................................21

SECTION 8.02      Maintenance of Books of Account...............................................................21

SECTION 8.03      Financial Statements..........................................................................21

SECTION 8.04      Other Reports and Inspection..................................................................23

SECTION 8.05      Taxation....................................................................................  23

SECTION 8.06      Deposit of Funds............................................................................  24

                                       ii
<PAGE>

ARTICLE IX.       Membership; Disposition of Membership Interests.............................................  24

SECTION 9.01      Restrictions on Transfer of Membership Interests............................................  24

SECTION 9.02      Admission of New Members....................................................................  26

SECTION 9.03      Withdrawal Prohibited.......................................................................  26

SECTION 9.04      Purchase of Additional Interest.............................................................  26

ARTICLE X.        Certain Agreements of the Members...........................................................  26

SECTION 10.01     Intentionally Blank.........................................................................  26

SECTION 10.02     Taxes and Charges; Governmental Rules.......................................................  27

SECTION 10.03     Further Assurances..........................................................................  27

SECTION 10.04     Dispute Resolution; Deadlock Respecting Business Plan.......................................  27

SECTION 10.05     Remedies upon Event of Default; Termination on Breach.......................................  28

SECTION 10.06     Intentionally Blank.........................................................................  29

SECTION 10.07     Mechanics of Sale...........................................................................  29

ARTICLE XI.       Dissolution.................................................................................  29

SECTION 11.01     Events of Dissolution.......................................................................  29

SECTION 11.02     Dissolution by Agreement....................................................................  30

SECTION 11.03     Dissolution upon Event of Default...........................................................  30

SECTION 11.04     Dissolution by Unilateral Option............................................................  30

SECTION 11.05     Dissolution upon Notice.....................................................................  31

SECTION 11.06     Winding Up..................................................................................  31

SECTION 11.07     Liquidation Proceeds........................................................................  31

SECTION 11.08     Deficit Capital Accounts....................................................................  32

SECTION 11.09     Articles of Dissolution.....................................................................  32

ARTICLE XII.      Indemnification and Insurance...............................................................  32

SECTION 12.01     Indemnification.............................................................................  32

SECTION 12.02     Insurance...................................................................................  33

SECTION 12.03     Indemnification by the Members..............................................................  33

SECTION 12.04     Assertion of Claims.........................................................................  34

                                      iii
<PAGE>

ARTICLE XIII.     Miscellaneous...............................................................................  34

SECTION 13.01     Governing Law...............................................................................  34

SECTION 13.02     Effectiveness...............................................................................  35
</TABLE>

                                       iv

<PAGE>
     OPERATING AGREEMENT of FLASHVISION, L.L.C., a Virginia limited liability
company, dated as of May 9, 2000, between SEMICONDUCTOR NORTH AMERICA, INC., a
Delaware corporation ("SENA"), and SANDISK CORPORATION, a Delaware corporation
("SanDisk").

     SanDisk and SENA intend to form FlashVision, L.L.C. (the "Company") as soon
as practicable after the date hereof by filing its Articles of Organization (the
"Articles") pursuant to the Virginia Limited Liability Company Act (the "Act").
SanDisk and SENA desire to enter into this Operating Agreement in accordance
with the Act and the Articles in order to provide for (i) the business of the
Company, (ii) the conduct of the Company's affairs and (iii) the rights, powers,
preferences, limitations and responsibilities of the Company's members,
employees and agents.

     Accordingly, SENA and SanDisk agree as follows:

                                   ARTICLE I.

                       Definitions, Rules of Construction
                           AND DOCUMENTARY CONVENTIONS

     SECTION 1.01 CERTAIN DEFINITIONS.

          (a) Capitalized terms used but not defined in this Agreement shall
have the respective meanings assigned to them in the Definitions, Rules of
Construction and Documentary Conventions, attached as Appendix A (the "Rules
Document") to the Master Agreement entered into by and among Toshiba
Corporation, Semiconductor North America, Inc. and SanDisk Corporation dated as
of the date hereof (the "Master Agreement").

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

     SECTION 1.02 ADDITIONAL DEFINITIONS. The following terms used in this
Agreement shall have the respective meanings assigned in this Agreement:

     TERM                                         DEFINED IN
     ----                                         ----------
     "704(b) Regulations"                         Section 7.02(b)(i)
     "Act"                                        Preamble
     "Articles"                                   Preamble
     "Bankruptcy Event"                           Section 11.01(g)
     "Capital Account"                            Section 7.01(a)
     "Claim"                                      Section 12.04(a)
     "Company"                                    Preamble
     "Deadlock"                                   Section 10.04(c)

                                       1
<PAGE>

     TERM                                         DEFINED IN
     ----                                         ----------
     "Deadlock Dissolution Notice"                Section 10.04(d)
     "Defaulting Member"                          Section 10.05
     "Designated Individuals"                     Section 10.04(b)
     "Excess Cash"                                Section 6.02(b)
     "Indemnified Party"                          Section 12.04(a)
     "Indemnifying Party"                         Section 12.04(a)
     "Initiating Member"                          Section 10.04(d)
     "Losses"                                     Section 12.01(a)
     "Master Agreement"                           Section 1.01(a)
     "Nondefaulting Member"                       Section 10.05
     "Notified Party"                             Section 11.05
     "Notifying Party"                            Section 11.05
     "Permissible Assignee"                       Section 9.01(c)
     "Permissible Assignment Agreement"           Section 9.01(c)
     "Regulatory Allocations"                     Section 7.02(b)(iv)
     "Responding Member"                          Section 10.04(d)
     "Rules Document"                             Section 1.01(a)
     "Tax Matters Partner"                        Section 8.05(b)
     "Termination Date"                           Section 11.04

     SECTION 1.03  RULES OF CONSTRUCTION AND DOCUMENTARY CONVENTIONS. The rules
of construction and documentary conventions set forth in the Rules Document
shall apply to, and are hereby incorporated in, this Agreement.

                                  ARTICLE II.

                               GENERAL PROVISIONS

     SECTION 2.01  FORMATION. The Company has been organized as a Virginia
limited liability company under and pursuant to the Act. The rights and
obligations of the Members shall be as set forth in the Act, except as provided
herein.

     SECTION 2.02  NAME. The name of the Company is "FlashVision, L.L.C.", and
all Company business shall be conducted in that name or such other name as the
Members may select from time to time and which is in compliance with all
applicable laws.

     SECTION 2.03  REGISTERED OFFICE AND REGISTERED AGENT AND PRINCIPAL OFFICE.
The registered office of the Company required by the Act to be maintained in the
Commonwealth of Virginia initially shall be the office of the initial registered
agent named in the Articles or such other office as the Members may designate
from time to time in the manner

                                       2
<PAGE>

provided by law. The registered agent of the Company in the Commonwealth of
Virginia initially shall be the registered agent named in the Articles or such
other Person or Persons as the Members may designate from time to time. The
principal office of the Company shall be located at 9600 Godwin Drive, Manassas,
Virginia 20110, or at such other place as the Members may designate from time to
time, and the Company shall maintain records there as required by the Act.

     SECTION 2.04  TERM; EXTENSION. The term of the Company commences on the
filing of the Articles and the issuance to the Company of a Certificate of
organization by the State Corporation Commission of the Commonwealth of
Virginia. The Company shall be terminated on December 31, 2016, unless extended
by mutual written agreement of the Members or earlier terminated in accordance
with Article XI (Dissolution). Any such extension shall be effective only upon
the written agreement of the Members and shall be on such terms and for such
period as set forth in such agreement. The Members agree to meet, no later than
December 31, 2015, to discuss the possible extension of the term of the Company.

     SECTION 2.05  ENTITY DECLARATION. The Company shall not be a general
partnership or a limited partnership, whether expressed or implied, and no
Member shall be considered a partner or joint venturer of or with any other
Member, for any purposes other than for Federal and state tax purposes, and this
Agreement shall not be construed otherwise.

     SECTION 2.06  COPE OF ACTIVITY. The scope of activity of the Company shall
be to manufacture or to cause to be manufactured Products and the sale of
Products to the Members and their Affiliates, with the objective of meeting the
demand of each Parent for NAND Flash Memory Products.

     SECTION 2.07  POWERS. The Company shall have all the powers now or
hereafter conferred by applicable law on limited liability companies formed
under the laws of the Commonwealth of Virginia and may do any and all acts and
things necessary, incidental or convenient to the purpose specified in Section
2.06 (Scope of Activity). Notwithstanding anything to the contrary contained in
this Agreement, except as set forth in Article III of the Master Agreement, the
Company shall not take any action whatsoever or incur any liability or
obligation whatsoever prior to the Closing without the express prior written
consent of each Member.

     SECTION 2.08  PROPERTY OWNERSHIP. Except as may otherwise expressly be
provided in this Agreement or in any Operative Document to which the Company is
or becomes a party, (a) all assets, property and rights, whether real, personal
or mixed, tangible or intangible, owned, held or possessed by the Company shall
be owned, held or possessed in the name of the Company and not any Member, (b)
all such assets, property and rights shall be deemed to be owned, held or
possessed by the Company as an entity and (c) neither Member individually shall
have any separate ownership in such assets, property or rights. Each Member's
interest in the Company shall be personal property for all purposes.

     SECTION 2.09  COMPANY ACTIONS. The Members hereby authorize the Company to,
and ratify (including for purposes of Section 4.01 (Matters Requiring Consent of
the Members) all action having been taken to, execute and deliver the Operative
Documents to

                                       3
<PAGE>

which it is or is specified to be a party, including all certificates,
agreements and other documents required in connection therewith.

                                  ARTICLE III.

                               BUSINESS OPERATIONS

     SECTION 3.01  BUSINESS DEALINGS WITH THE COMPANY. Subject to the provisions
set forth in Sections 4.01(a) (Matters Requiring Consent of Members) and 5.01(d)
(Matters Requiring Consent of the Operating Committee), the Company may enter
into contracts or agreements with, and otherwise enter into transactions or
dealings, with, either Member (or any of its Affiliates), and derive and retain
profits therefrom. The validity of any such contract, agreement, transaction or
dealing or any payment or profit related thereto or derived therefrom shall not
be affected by any relationship between the Company and either Member or any of
their respective Affiliates. The Members agree that where practicable and
contractually allowable (and when based on competitive price, availability and
other material terms) the Operating Committee will consider whether to utilize
the Parents and their respective Affiliates as the preferred providers of
products and services that may be required in the manufacturing operations of
the Company, subject to the Parents' (or their respective Affiliates') ability
to meet the Company's manufacturing requirements on competitive terms. Unless
otherwise approved by the Members or otherwise expressly provided in the
Operative Documents, all business dealings of the Company with either Member or
its Affiliates shall be on the most beneficial standard commercial terms and
conditions, including volume, price and credit terms, currently offered or made
available to unaffiliated customers by SanDisk or Toshiba (or their respective
Affiliates), as the case may be, with respect to the products and services to be
offered and provided to the Company.

     SECTION 3.02  OTHER ACTIVITIES. During the term of this Agreement, neither
Parent nor any of their respective Affiliates shall: (i) fabricate NAND Flash
Memory Integrated Circuits at any location other than Yokkaichi, DSC Module I,
DSC Module II or any other fabrication facility agreed upon by the parties; (ii)
have any third party fabricate NAND Flash Memory Integrated Circuits; or (iii)
have any right to fabricate NAND Flash Memory Integrated Circuits beyond the
capacity as limited pursuant to Article VII of the Master Agreement, as such
capacity limitations may be amended from time to time in accordance with Article
VII of the Master Agreement. For the avoidance of doubt, nothing contained in
the foregoing shall restrict the parties from engaging in any other activities,
including, without limitation, (i) designing any NAND Flash Memory Product; (ii)
selling any NAND Flash Memory Product to any customer; (iii) entering into any
equipment purchase or material supply agreements; or (iv) entering into any
patent licensing arrangement, and nothing in the foregoing shall restrict
Toshiba from installing any manufacturing line in Yokkaichi (subject to the
capacity limitations set forth in Article VII of the Master Agreement, as such
capacity limitations may be amended from time to time in accordance with Article
VII of the Master Agreement). For purposes of this Section 3.02, NAND Flash
Memory Integrated Circuits shall mean ICs included in the definition of NAND
Flash Memory Products pursuant to Section 2.02 of the Master Agreement.

     SECTION 3.03  SECONDED EMPLOYEES. The Members agree that all Seconded
Employees are expected to devote their full working efforts to promoting the
interests and

                                       4
<PAGE>

success of the Company during the period of their assignment and to performing
their work for the Company in good faith under the direction of the Company's
management. Each Parent has agreed to encourage Seconded Employees assigned to
the Company by such Parent to be dedicated to the best interests and success of
the Company.

     SECTION 3.04 BUSINESS PLANS AND RELATED MATTERS.

          (a) INITIAL AND SUBSEQUENT BUSINESS PLANS. The Initial Business Plan
of the Company setting forth the Company's Products, pricing, operating budget,
capital expenditures, expense budgets, financing plans and other business
activities for the initial three (3) years of operation of the Company will be
agreed upon and certified by the Members and DSC on or prior to Closing.

               (i) The Members acknowledge that the Initial Business Plan and
each successive Business Plan will represent the Company's then current forecast
of the proposed operations of the Company.

               (ii) An updated Business Plan complying with Section 3.04(b)
(Form and Scope) in respect of each successive Fiscal Year shall be prepared
under the direction of the Chief Executive Officer of the Company with the
active participation of the President and the Executive Vice President of the
Company and of DSC and submitted to the Operating Committee for review and
approval not later than the January 15 preceding the commencement of such Fiscal
Year.

               (iii) When the proposed Business Plan in respect of a Fiscal Year
is approved by the Operating Committee, it shall constitute the Business Plan
and the Company and its officers and employees shall implement such Business
Plan, which shall be the basis of the Company's operations for such Fiscal Year.
Upon approval, the approved Business Plan shall constitute the approved
operational, financing and capital expenditure budget. The Operating Committee
shall have the authority pursuant to Section 5.01(d) (Matters Requiring Approval
of Operating Committee) to amend the Business Plan for any Fiscal Year,
including the operating budget contained therein, and either Member may request
that the Operating Committee review the Company's operating results and
prospects, as well as market conditions, and consider a proposal for amendment
or review of the then-current Business Plan at any regularly scheduled or
special meeting of the Operating Committee and upon such request, the Operating
Committee shall in good faith make such review and/or consider such proposal.

          (b) FORM AND SCOPE. Each Business Plan shall contain a statement of
long-range strategy and short-range tactics detailing quantitative and
qualitative goals for the Company and relating the attainment of those goals to
the Company's manufacturing objectives and shall include such items as planned
capital expenditures, planned product development, planned product output and
projected product cost, sales forecasts, total headcount, total spending and
revenue and profit projections, financing plans and tax planning. No Business
Plan shall be deemed to be an amendment of this Agreement.

          (c) APPROVAL. The Operating Committee shall vote upon the proposed
Business Plan, with such modifications as it may deem necessary, before February
15 preceding

                                       5
<PAGE>

the commencement of each Fiscal Year. Subject to Sections 10.04(c), (d) and (e)
(Dispute Resolution; Deadlock Respecting Business Plan), pending approval by the
Operating Committee of any proposed Business Plan, the current Business Plan
shall continue in effect; provided, however, the Operating Committee may by
unanimous vote adopt an amended interim business plan for the Company's
operations until it is able to reach agreement on the proposed Business Plan for
the forthcoming year.

     SECTION 3.05 STANDARD OF CARE.

          (a) A Member or a Member Representative shall be entitled to rely
(unless such Person has knowledge or information concerning the matter in
question that makes reliance unwarranted) on information, opinions, reports or
statements, including financial statements and other financial data, if prepared
or presented by:

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

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

          (b) Any Member or Member Representative shall also be entitled to rely
upon information, opinions, reports or statements, including financial
statements and other financial data, prepared or presented by the Operating
Committee pursuant to the responsibilities delegated to the Operating Committee
pursuant to this Agreement.

          (c) A Member or Member Representative who performs his duties in
accordance with this Section and applicable sections of the Act shall have no
liability by reason of being or having been a manager of the Company.

     SECTION 3.06  USE OF NAMES. Except as may be expressly provided in the
Operative Documents, nothing in this Agreement shall be construed as conferring
on the Company or the other Member or its Parent the right to use in
advertising, publicity or other promotional activities any name, trade name,
trademark or other designation of either Member (or any of such Member's
Affiliates), including any contraction, abbreviation or simulation of any of the
foregoing.
                                   ARTICLE IV

                             ACTIONS BY THE MEMBERS

     SECTION 4.01 MATTERS REQUIRING THE CONSENT OF THE MEMBERS.

          (a) No action may be taken by or on behalf of the Company in
connection with any of the following matters without the prior affirmative vote
or written consent of each Member:

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

                                       6
<PAGE>

               (ii) any amendment to or renewal of this Agreement (including
changes in the structure and/or powers of the Operating Committee) or any
Operative Document between the Company and a Member or an Affiliate of a Member;

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

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

               (v) the sale, lease, pledge, assignment or other disposition of
assets of the Company in an amount in excess of $50,000 in one transaction or a
series of related transactions, other than as set forth in the applicable
approved Business Plan;

               (vi) the approval of any transaction or agreement between the
Company and either Member or its Affiliates (other than transactions or
agreements expressly provided for or authorized by an Operative Document, the
Initial Business Plan or a subsequently approved Business Plan) or any amendment
thereto (including the waiver of any material term thereof), other than any such
transaction, agreement or amendment that contains generally available, arm's
length commercial terms and is in an amount (in terms of payments to be made or
the value of services or products to be provided or delivered) less than $50,000
for any single transaction or agreement or for substantially identical
transactions within a 24 month period (or a waiver that does not materially
adversely affect the rights and benefits of the Company), other than as set
forth in the applicable approved Business Plan;

               (vii) incurring Indebtedness in an amount in excess of $10,000 or
an increase in aggregate Indebtedness in excess of $10,000 in any calendar
quarter, other than as authorized by Section 5.01(d) (Matters Requiring the
Approval of Operating Committee);

               (viii) with respect to the Company or any of its Subsidiaries,
(A) the voluntary commencement of any proceeding or the voluntary filing of any
petition seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (B) the consent to the
institution of, or causing it to fail to contest in a timely and appropriate
manner, any involuntary proceeding or any involuntary filing of any petition of
the type described in clause (A) above, (C) the application for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for it, or for a substantial part of its property or assets,
(D) the filing of an answer admitting the material allegations of a petition
filed against it in any such proceeding described above, (E) the consent to any
order for relief issued with respect to any such proceeding described above, (F)
the making of a general assignment for the benefit of creditors, (G) admitting
in writing its inability or causing it to fail generally to pay its debts as
they become due or (H) taking any action for the purpose of effecting any of the
foregoing;

               (ix) subject to Section 9.01(a) and the Rules Document, the
admission of another Member or the granting of consent to the transfer of a
Membership Interest;

                                       7
<PAGE>

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

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

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

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

               (xiv) any material matter relevant to the operation, staffing,
business or financial expenditures of the Company; and

               (xv) the filing of an application for a decree of judicial
dissolution of the Company pursuant to under Section 13.1-1047 of the Act.

          (b) Each Member shall designate one individual (who is not a Member
Representative) who shall be authorized to act on behalf of such Member in
connection with voting, consents or approvals necessary or appropriate under
Section 4.01(a) (Matters Requiring the Consent of the Members), provided that
all such acts on behalf of a Member shall be in writing and shall refer to such
action as being taken pursuant to this Agreement. Initially such designated
individuals shall be the President and CEO of SanDisk for SanDisk and the Vice
President, Semiconductor Company of Toshiba for SENA, and any such person may be
replaced by the designating Member on written notice to the other Member in
accordance with Section 2.14 of Appendix A (Notices). Each Member agrees to give
any consent or approval required under this Section, or to indicate that such
consent or approval will not be given, within 30 days of written request by the
other Member or the Company; provided, however, a Member's failure to respond
within said time period shall not be deemed to constitute such Member's approval
or consent.

          (c) Notwithstanding the requirements of Section 4.01(a) (Matters
Requiring the Consent of the Members) relating to agreements between the Company
and either SanDisk or SENA or their respective Affiliates, any question
regarding a material default or alleged material default (including any question
regarding a breach of representation or alleged breach of representation) under
any Operative Document between the Company and either Member or its Affiliates
shall be subject to the dispute resolution process in Section 10.04(a) and (b)
(Dispute Resolution; Deadlock Respecting Business Plan) of this Agreement.

     SECTION 4.02 RESTRICTIONS ON MEMBERS. As between the Members, neither
Member may, without the prior written consent of the other Member:

          (a) confess a judgment against the Company;

                                       8
<PAGE>

          (b) except as contemplated by Section 8.05(b) (Tax Matters Partner) or
(c) (Tax Returns), make any agreement on behalf of or otherwise purport to bind
the other Member or the Company;

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

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

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

     SECTION 4.03 MEETINGS OF MEMBERS. The Members shall meet annually or at
such other intervals, and at such times, as they may agree. Meetings may be held
at the Company's principal office or at any other location, or, if the Members
so agree, by conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each other, provided
that such communications equipment continues to be operational throughout the
meeting. Except as otherwise provided in this Agreement, each Member shall be
entitled to vote in proportion to such Member's Percentage. The presence of all
Members shall be required for a quorum for any action to be taken by the
Members, except as otherwise expressly provided in this Agreement. Whenever the
Members are required or permitted to take any action by vote, such action may be
taken without a meeting, without prior notice and without a vote if a consent
setting forth the action so taken, and identified as a consent of the Members
pursuant to this Section, is signed by both Members. All such consents and
minutes of all meetings of the Members shall be kept with the Company's records
referred to in Section 5.04 (Records).

                                   ARTICLE V.

                      MANAGEMENT AND OPERATIONS OF COMPANY

     SECTION 5.01 OPERATING COMMITTEE AS MANAGERS.

          (a) GENERAL. Except as otherwise provided herein (including but not
limited to Section 4.01 (Matters Requiring the Consent of the Members) and
Section 5.02 (Officers; Employees)), the Operating Committee is vested with
complete and exclusive power to direct and control the Company and to manage the
Company as provided by the Articles of Organization and this Operating
Agreement, as they may be amended from time to time. The Members hereby agree to
exercise their powers with respect to the conduct of the Company's business
(excluding those matters that require action by the Members pursuant to Article
IV (Actions by Members)) through their respective Member Representatives on the
Operating Committee. The Operating Committee will receive input from advisory
committees (including the Management Committee) as may be set up from time to
time by the Members.

          (b) MEMBERS OF THE OPERATING COMMITTEE; VOTING; ETC. SanDisk and SENA
shall each appoint three (3) Member Representatives to the Operating Committee.
The appointees of either Member must be employees of such appointing Member or
its Affiliated

                                       9
<PAGE>

Parent or any wholly-owned Subsidiary of such Affiliated Parent. Each Member
shall be entitled to appoint an alternate Member Representative to serve in the
place of any Member Representative appointed by such Member should any such
Member Representative be unable to attend a meeting.

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

               (ii) Each Member shall bear any cost incurred by any Member
Representative or alternate Member Representative designated by it to serve on
the Operating Committee, and no Member Representative shall be entitled to
compensation from the Company for serving in such capacity.

               (iii) Each Member shall notify the other Member and the Company
of the name, business address and business telephone and facsimile numbers of
each Member Representative and each alternate Member Representative that such
Member has appointed to the Operating Committee. Each Member shall promptly
notify the other Member and the Company of any change in such Member's
appointments or of any change in any such address or number.

               (iv) For purposes of any approval or action taken by the
Operating Committee, each Member Representative shall have one vote. All of the
votes eligible to be cast at any meeting shall be required to be cast
affirmatively for purposes of approving any action to be taken by the Operating
Committee at such meeting.

               (v) At any meeting of the Operating Committee, a Member
Representative, in the absence of one or more other Member Representatives
appointed by the same Member or an alternate Member Representative, may cast the
vote that such absent Member Representative(s) or alternate Member
Representative, as the case may be, would otherwise be entitled to cast.

               (vi) The quorum necessary for any meeting of the Operating
Committee shall be those Members Representatives entitled to cast all of the
votes held by the members of the Operating Committee. A quorum shall be deemed
not to be present at any meeting for which notice was not properly given under
Section 5.01(c) (Meetings, Notices, etc.), unless the Member Representative or
Member Representatives as to whom such notice was not properly given attend such
meeting without protesting the lack of notice or duly execute and deliver a
written waiver of notice or a written consent to the holding of such meeting.

               (vii) Any action taken by a Member Representative in such Member
Representative's capacity as such shall, so far as the Members are concerned, be
deemed to have been duly authorized by the Member that appointed such Member
Representative; provided, however, that any such action shall not be deemed to
be an approval, consent or agreement of such Member for any purposes of this
Agreement (including under

                                       10
<PAGE>

Section 4.01(Matters Requiring the Consent of the Members)), which approval,
consent or agreement must be separately obtained in writing as herein specified.

               (viii) Each appointment by a Member to the Operating Committee
shall remain in effect until the Member making such appointment notifies the
other Member and the Company in writing of a change in such appointment. The
resignation or removal of a Member Representative shall not invalidate any act
of such Member Representative taken before the giving of such written notice of
the removal or resignation of such Member Representative.

          (c) MEETINGS, NOTICE, ETC. Meetings of the Operating Committee shall
be held at such location or locations as may be selected by the Operating
Committee from time to time.

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

               (ii) Notice of any regular meeting or special meeting pursuant to
Section 5.01(c) (iii) shall be given to each Member Representative and alternate
Member Representative of the Operating Committee by the Company or any Member at
least ten (10) Business Days prior to such meeting in the case of a meeting in
person or at least five (5) Business Days prior to such meeting in the case of a
meeting by conference telephone or similar communications equipment pursuant to
Section 5.01(c)(v), which notice shall state the purpose or purposes for which
such meeting is being called and include any supporting documentation relating
to any action to be taken at such meeting.

               (iii) Special meetings of the Operating Committee may be called
by any Member Representative by notice given in accordance with the notice
requirements set forth in Section 5.01(c)(ii); PROVIDED THAT the Member
Representatives appointed by the other Member (that is not represented by the
Member Representative calling such special meeting) shall be entitled to select
a convenient location for the meeting and to suggest an alternative time or
times if the designated time is not convenient for them. No action may be taken
and no business may be transacted at such special meeting which is not
identified in such notice unless (A) such action or business is incidental to
the action or business for which the special meeting is called or (B) such
action or business does not materially adversely affect either Member or the
Company. Minutes of each Operating Committee meeting shall be sent by facsimile
to all Member Representatives within twenty (20) calendar days after such
meeting. Material to be presented at an Operating Committee meeting shall be
sent by facsimile or delivered in hard copy to all Member Representatives ten
(10) Business Days prior to such meeting if feasible in light of the
circumstances giving rise to the need for such meeting, or in any event a
minimum of five (5) Business Days prior to such meeting.

               (iv) The actions taken by the Operating Committee at any meeting,
however called and noticed, shall be as valid as though taken at a meeting duly
held after regular call and notice if (but not until), either before, at or
after the meeting, any Member Representative as to whom it was improperly held
duly executes and delivers a written waiver of

                                       11
<PAGE>

notice or a written consent to the holding of such meeting; PROVIDED, HOWEVER,
any Member Representative who is present at a meeting and does not protest the
failure of notice shall be deemed to have received adequate notice thereof. A
vote of the Operating Committee may be taken only either in a meeting of the
members thereof duly called and held or without a meeting by the execution by
the Member Representatives eligible to cast all the votes on the Operating
Committee of a consent setting forth the action so taken, and identified as a
consent of the Member Representatives pursuant to this Section 5.01(c)(iv).

               (v) Upon the consent of all Member Representatives, a meeting of
the Operating Committee may be held by conference telephone or similar
communications equipment by means of which all Member Representatives
participating in the meeting can be heard by all other participants, provided
that such communications equipment continues to be operational throughout the
meeting. Any Member Representative may elect to participate in a meeting by
conference telephone or similar communications equipment upon sufficient advance
notice to permit arrangements therefor to be made. At any meeting, the Operating
Committee shall consider (A) any of the items set forth in Section 5.01(d)
(Matters Requiring Approval of Operating Committee) that may require the
Operating Committee's attention, (B) any items added to the Operating Committee
agenda for discussion by either Member and (C) such other matters as the
Operating Committee decides to review; PROVIDED, HOWEVER, that the Member
Representatives shall not be required to vote or take other action (other than
carrying on discussions) on matters that were not placed on the meeting agenda
at least five Business Days in advance of the time set for the meeting unless
such action or business is incidental to the action or business which was
otherwise properly on the agenda and considered at such meeting.

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

               (vii) The Operating Committee shall have the authority to
establish subcommittees and to delegate to any such subcommittee any of the
Operating Committee's responsibilities; PROVIDED, HOWEVER, the power of the
Operating Committee to approve the matters set forth in Section 5.01(d) (Matters
Requiring Approval of Operating Committee) may not be delegated to a
subcommittee.

          (d) MATTERS REQUIRING APPROVAL OF OPERATING COMMITTEE. No action may
be taken by or on behalf of the Company in connection with any of the following
matters without the unanimous consent of the Operating Committee:

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

                                       12
<PAGE>

               (ii) the sale, lease, pledge, assignment or other disposition of
assets in an amount in excess of $10,000 in one transaction or a series of
related transactions, other than as set forth in the applicable approved
Business Plan;

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

               (iv) the approval of any transaction or agreement between the
Company and either Member or its Affiliates (other than transactions or
agreements expressly provided for or authorized by an Operative Document, the
Initial Business Plan or a subsequently approved Business Plan) or any amendment
thereto (including a waiver of a material term thereof), other than any such
transaction, agreement or amendment that contains generally available, arm's
length commercial terms and is in an amount (in terms of payments to be made or
the value of services or products to be provided or delivered) less than $10,000
for any single transaction or agreement or for substantially identical
transactions within a 24 month period (or a waiver that does not materially
adversely affect the rights and benefits of the Company);

               (v) the purchase, lease, license or other acquisition of personal
property or services in an amount exceeding $10,000 in any one transaction or a
series of related transactions, other than as provided for in the Initial
Business Plan or a subsequently approved Business Plan or any list of capital
equipment approved by the Members;

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

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

               (viii) incurring Indebtedness;

               (ix) the hiring or termination of employees referenced in Section
5.02(a) (Officers; Employees) who are not Seconded Employees, if any;

               (x) the adoption of or changes to the forms of confidentiality,
assignment or disclosure of intellectual property or employment agreements to be
used with the Company's employees;

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

               (xii) the amount and timing of any distributions, other than
distributions pursuant to Section 6.02(c) (Mandatory Distributions for Taxes);

               (xiii) with respect to the Company or any of its Subsidiaries,
(A) the voluntary commencement of any proceeding or the voluntary filing of any
petition seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (B) the

                                       13
<PAGE>

consent to the institution of, or causing it to fail to contest in a timely and
appropriate manner, any involuntary proceeding or any involuntary filing of any
petition of the type described in clause (A) above, (C) the application for or
consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for it, or for a substantial part of its
property or assets, (D) the filing of an answer admitting the material
allegations of a petition filed against it in any such proceeding described
above, (E) the consent to any order for relief issued with respect to any such
proceeding described above, (F) the making of a general assignment for the
benefit of creditors, (G) admitting in writing its inability or causing it to
fail generally to pay its debts as they become due or (H) taking any action for
the purpose of effecting any of the foregoing;

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

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

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

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

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

               (xix) public announcements on behalf of the Company, provided
that in any case any such public announcements must otherwise comply with the
requirements of Section 6.03 (Public Announcements) of the Master Agreement, if
applicable;

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

               (xxi) the approval of, or amendment to, the Business Plan,
including the operating budget contained therein;

               (xxii) the incurrence of capital expenditures in excess of those
provided for in the then-current Business Plan or the commitment of development
projects other than as provided for in the Initial Business Plan or a
subsequently approved Business Plan;

               (xxiii) the commitment of the Company to a development project;

               (xxiv) subject to Section 5.01(c)(vii), the establishment of
subcommittees or delegation of authority of the Operating Committee;

                                       14
<PAGE>

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

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

               (xxvii) the approval of Unique Activities to be performed by the
Company at the request of a Member, in connection with which the Operating
Committee shall be satisfied that such Member has reached agreement with the
Company as to the payment by such Member of all costs resulting from such Unique
Activities and that adequate provision has been made by such Member for the
funding of any additional required capital expenditures required in conjunction
with such Unique Activities;

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

               (xxix) such other matters as the Operating Committee decides to
review; and

               (xxx) the filing of application for a decree of judicial
dissolution of the Company pursuant to under Section 13.1-1047 of the Act.

     SECTION 5.02 OFFICERS; EMPLOYEES

          (a) The executive officers of the Company shall be the President/Chief
Executive Officer and the Executive Vice President, each of whom shall be
appointed alternately by SENA and SanDisk to serve successive three-year terms,
subject to the consent of the non-appointing Member, which consent shall not
unreasonably be withheld. In addition, the Operating Committee may appoint such
other officers from time to time as it deems necessary or advisable in the
conduct of the business and affairs of the Company. Any individual may hold more
than one office. SENA shall appoint the Company's first President/Chief
Executive Officer and SanDisk shall appoint the Company's first Executive Vice
President. One or more executive officers of the Company may attend any meeting
of the Operating Committee at the invitation of the Member Representative
designated for this purpose by either Member.

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

          (c) Employees of the Parents (or any of their Subsidiaries) may
provide services to the Company as Seconded Employees. Any liabilities in
respect of the employment of such Seconded Employees for periods prior to the
commencement or following the termination of their assignment to the Company
shall be retained by the relevant Parent (or its Subsidiary) that assigned such
Seconded Employee to the Company. Financial responsibility for the salary,
employment-related Taxes, benefits and temporary expenses relating to Seconded

                                       15
<PAGE>

Employees shall be allocated as provided in Section 7.07 (Personnel) of the
Master Agreement. Seconded Employees other than the Company's executive officers
referred to in Section 5.02(a) (Officers; Employees) may be removed for cause by
the Company's management and may be removed with or without cause by the
Operating Committee. The Operating Committee shall have the right to terminate
the services of the executive officers of the Company with or without cause.

          (d) The Company will have agreements with and policies applicable to
each of its officers, employees and consultants who are not Seconded Employees,
in forms acceptable to each Member, and shall also have appropriate arrangements
with its Seconded Employees, in each case with respect to (i) protection of
confidential information, (ii) patent and copyright assignment, (iii) invention
disclosure (including improvements and advances) and assignments thereof and
(iv) in respect of certain employees who are not Seconded Employees, by
agreement of the Operating Committee, non-competition.

     SECTION 5.03 INSURANCE. The Company shall maintain insurance against such
liabilities and other risks associated with the conduct by the Company of its
business and in such amounts and against such risks as agreed by the Members,
and in any event as is generally maintained by companies engaged in a business
similar to that of the Company.

     SECTION 5.04 RECORDS. The Company shall maintain the following records at
its principal office:

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

          (b) a copy of the Articles and the Certificate of Organization of the
Company, issued pursuant to Section 13.1-1004 of the Act, and all articles of
amendment and certificates of amendment thereto;

          (c) a copy of this Agreement, any amendments thereto and any financial
statements of the Company for the three most recent Fiscal Years;

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

          (e) a copy of all indentures, loan agreements, lease agreements,
guarantees, security agreements, promissory notes, licensing or other
intellectual property agreements, agreements that relate to the payment or
receipt by the Company of amounts in excess of $50,000 or that are not
terminable by the Company upon ninety (90) days notice, documents, if any,
evidencing employee compensation arrangements, employee pension or other benefit
arrangements, and similar documents and instruments executed and delivered by
the Company.

                                  ARTICLE VI.

                      CAPITAL CONTRIBUTIONS; DISTRIBUTIONS

                                       16
<PAGE>

     SECTION 6.01 CAPITAL CONTRIBUTIONS.

          (a) The Members shall make Capital Contributions in an aggregate
amount of $300 million through the second quarter of 2001, such Capital
Contributions to be made by each of the Members in proportion to their
respective Percentages. Subject to the foregoing, the specific timing and the
amount of each Capital Contribution by the Members shall be determined by the
Operating Committee; PROVIDED THAT the timing of such Capital Contributions
shall be the same for each Member and the amount of such Capital Contributions
shall be in proportion to their respective Percentages.

          (b) No Member shall be obligated to make any capital contributions to
the Company in excess of $150 million or after the end of the second quarter of
2001, unless otherwise agreed upon by the Members in writing, in which case such
additional contributions shall be made in equal amounts.

     SECTION 6.02 DISTRIBUTIONS.

          (a) GENERAL. Subject to Sections 6.02(b) (Excess Cash), 6.02(c)
(Mandatory Distributions for Taxes), 6.02(d) (Limitations on Distributions) and
11.07 (Liquidation Proceeds), unless otherwise agreed by the Members, no
distributions of Company cash (or in the case of Section 11.07 (Liquidation
Proceeds), other property) to the Members shall be made for a period of five (5)
years from the date of this Agreement and thereafter all distributions of
Company cash (or, in the case of Section 11.07 (Liquidation Proceeds), other
property) to the Members shall be made at the times and in the amounts
determined by the Members. Except as provided in Section 11.07 (Liquidation
Proceeds), each distribution to the Members shall be made pro rata in accordance
with their respective Percentages.

          (b) EXCESS CASH. "Excess Cash" means cash and cash equivalents on hand
as of each June 30 and December 31 of each Fiscal Year in excess of the cash
requirements of the Company, as determined by the Operating Committee. Excess
Cash shall be distributed to the Members, used to repay Indebtedness or applied
in a manner as directed by the Operating Committee.

          (c) MANDATORY DISTRIBUTIONS FOR TAXES. Subject to Section 6.02(d)
(Limitations on Distributions), the Company shall make distributions in respect
of each Fiscal Year to the Members pro rata in accordance with the allocation of
Net Profits and Net Losses as set out in Section 7.02(a) (Allocation of Net
Profits and Net Losses) to the extent necessary to meet the Members' aggregate
U.S. Federal, state and local income tax liabilities with respect to such Fiscal
Year (including estimated payments), calculated as if the highest marginal
statutory U.S. Federal and the Commonwealth of Virginia and local corporate tax
rates were applicable to each Member for all periods, in respect of taxable
income for such Fiscal Year; PROVIDED, HOWEVER, distributions pursuant to this
Section shall not be made in respect of any Fiscal Year prior to the first
Fiscal Year for which the Company has a cumulative profit for tax purposes, as
set forth in the Company's filings with the United States Internal Revenue
Service. Any distributions required pursuant to this Section shall be made at
least 30 days prior to the due date of any such tax payment. The Company shall
make a reasonable estimate of any such amounts required to be paid pursuant to
this paragraph. A final adjustment shall be made between the

                                       17
<PAGE>

Company and its Members within 30 days following the filing of the Company's
annual tax returns.

          (d) LIMITATIONS ON DISTRIBUTIONS. Distributions shall not be made to
Members if prohibited by Section 13.1-1035 of the Act.

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

     SECTION 6.04 RETURN OF CAPITAL CONTRIBUTIONS. Except as expressly provided
herein, no Member shall be entitled to the return of any part of such Member's
Capital Contributions.

                                  ARTICLE VII.

         CAPITAL ACCOUNTS AND ALLOCATIONS OF NET PROFITS AND NET LOSSES

     SECTION 7.01 CAPITAL ACCOUNTS.

          (a) The Company shall establish and maintain for each Member on the
books of the Company a capital account ("Capital Account") in accordance with
Treasury Regulation Section 1.704-1(b)(2)(iv)(b). A Member's initial Capital
Account shall be increased (without duplication) by (i) the amount of any cash
contributions made by or on behalf of such Member to the Company, (ii) the
agreed value of any property contributed by or on behalf of such Member to the
Company (net of any liabilities secured by such property that the Company is
considered to assume or take subject to under Code Section 752), and (iii) the
amount of all Net Profits (or items thereof) allocated to such Member pursuant
to Sections 7.02 (Allocation of Net Profits and Net Losses) and 7.04
(Depreciation Recapture); and a Member's Capital Account shall be decreased by
(x) the amount of any Net Losses (or items thereof) allocated to such Member
pursuant to Section 7.02 (Allocation of Net Profits and Net Losses) and (y) all
amounts distributed by the Company to such Member with respect to its Membership
Interest (including the fair market value of any property distributed in kind,
net of all liabilities secured by such property that such Member is considered
to assume or take subject to under Code Section 752). The Capital Account of
each Member shall also be adjusted appropriately to reflect any other
adjustments required pursuant to Treasury Regulation Sections 1.704-1 and
1.704-2.

          (b) Upon the occurrence of any event specified in Treasury Regulation
Section 1.704-1(b)(2)(iv)(f), the Capital Accounts of the Members may (subject
to both Members' consent, which consent shall not be unreasonably delayed or
withheld) be adjusted to reflect the fair market value of the Company's property
at such time and in such manner as provided in such Regulation.

          (c) In the event that any interest in the Company in accordance with
the provisions hereof is transferred, the transferee of such interest shall
succeed to the portion of the transferor's Capital Account attributable to such
interest.

     SECTION 7.02 ALLOCATION OF NET PROFITS AND NET LOSSES.

                                       18
<PAGE>

          (a) GENERAL. Subject to Section 7.02(b) (Special Allocations) and
Section 7.04 (Depreciation Recapture), the Net Profits and Net Losses of the
Company for each Fiscal Year shall be allocated to the Members pro rata in
accordance with their respective Percentages.

          (b) SPECIAL ALLOCATIONS. Special allocations of specific items of
income, gain, loss or deduction may be required for any Fiscal Year as follows:

               (i) items of income and gain shall be allocated between the
Members at such time and in such amounts as necessary to satisfy the "minimum
gain chargeback" requirements of the Treasury Regulations promulgated under Code
Section 704(b) (the "704(b) Regulations");

               (ii) nonrecourse deductions attributable to a "partner
non-recourse liability" (as defined in the 704(b) Regulations) of the Company
shall be allocated among the Members that bear the economic risk of loss for
such partner nonrecourse liability in accordance with the ratios in which such
Members share such economic risk of loss and in a manner consistent with the
requirements of the 704(b) Regulations; and

               (iii) items of income, gain, loss and deduction shall be
allocated to the extent required to satisfy the "qualified income offset"
provisions of the 704(b) Regulations.

               (iv) The allocations set forth in Sections 7.02(b)(i) through
(iii) (the "Regulatory Allocations") are intended to comply with certain
requirements of the U.S. Treasury Regulations. It is the intent of the Members
that, to the extent possible, all Regulatory Allocations shall be offset either
with other Regulatory Allocations or with special allocations of other items of
Company income, gain, loss or deduction pursuant to this Section 7.02(b)(iv).
Therefore, notwithstanding any other provisions of this Article VII (other than
the Regulatory Allocations), the Members shall make such offsetting special
allocations of Company income, gain, loss or deduction in whatever manner they
determine appropriate so that, after such offsetting allocations are made, each
Member's Capital Account balance is, to the extent possible, equal to the
Capital Account balance such Member would have had if the Regulatory Allocations
were not part of the Agreement and all Company items were allocated pursuant to
Sections 7.02(a) (Allocation of Net Profits and Net Losses) and 7.04
(Depreciation Recapture).

          (c) AUTHORITY TO MODIFY ALLOCATIONS. In the event that the Tax Matters
Partner determines that the allocations otherwise required pursuant to this
Section do not properly reflect the economic arrangement of the Members or do
not comply with the requirements of Code Section 704(b), the Tax Matters Partner
shall be authorized to modify such allocations as appropriate to more properly
reflect the economic arrangement of the Members or to comply with Code Section
704(b).

     SECTION 7.03 DISTRIBUTION IN KIND. Neither Member shall be obligated to
receive distributions in kind, except pursuant to Section 11.07 (Liquidation
Proceeds).

     SECTION 7.04 DEPRECIATION RECAPTURE. Any Net Profits arising from a Capital
Transaction that is characterized as ordinary income pursuant to Code Section
1245 or

                                       19
<PAGE>

1250 or any other applicable Code provision shall, to the extent possible, be
allocated to the Member who was allocated the depreciation deductions giving
rise to such ordinary income; PROVIDED, HOWEVER, that if the ordinary income
that would otherwise be allocated to a Member pursuant to this sentence would
exceed the Net Profits otherwise allocable to such Member pursuant to Section
7.02 (Allocation of Net Profits and Net Losses), such excess shall instead be
allocated to the other Member.

     SECTION 7.05 ALLOCATION BETWEEN TRANSFEROR AND TRANSFEREE MEMBERS. If any
interest in the Company is Transferred during any Fiscal Year in accordance with
this Agreement, then the transferor and transferee shall each be entitled to
receive distributions pursuant to Article VI (Capital Contributions;
Distributions) and allocations of Net Profits and Net Losses pursuant to this
Article VII (Capital Accounts and Allocations of Net Profits and Net Losses), as
follows:

          (a) unless the transferor and transferee shall agree otherwise and so
provide in the instruments of transfer, distributions shall be made to the
Person owning such interest on the date of the distribution; and

          (b) subject to applicable Treasury Regulations, Net Profits and Net
Losses shall be allocated based upon the number of days each Person holds such
interest during such Fiscal Year.

     SECTION 7.06 FEDERAL INCOME TAX ALLOCATIONS. Sections 7.02 through 7.05
provide for the allocation of items of income, gain, losses and deductions for
Capital Account maintenance purposes. The Company's ordinary income and losses
and capital gains and losses as determined for Federal income tax purposes (and
each item of income, gain, loss or deduction entering into the computation
thereof) shall be allocated to the Members in the same proportions as the
corresponding Capital Account items are allocated pursuant to this Article VII.
Notwithstanding the foregoing sentence, Federal income tax items relating to
Section 704(c) Property shall be allocated to the Members in accordance with
Code Section 704(c) and Treas. Reg. Section 1.704-1(b)(2)(iv)(g) to take into
account the difference between the fair market value and the tax basis of such
Section 704(c) Property as of the date of its contribution to the Company or
revaluation pursuant to Section 7.01(b). Items described in this Section shall
not be credited or charged to Capital Accounts.

     SECTION 7.07 FISCAL YEAR. Unless otherwise required by the Code or
applicable Treasury Regulations, the Fiscal Year of the Company shall end on the
last day of March of each year.

     SECTION 7.08 ELECTIONS.

          (a) In the event of a Transfer of all of a Member's interest in the
Company, the Tax Matters Partner shall at the request of the transferee cause
the Company to elect (if such election is not already in effect) pursuant to
Code Section 754 to adjust the basis of the Company's property in the manner
provided in Code Section 743, provided that any such basis adjustment shall be
allocated solely to such transferee.

     Except as otherwise expressly provided herein, all other elections required
or

                                       20
<PAGE>

permitted to be made by the Company under the Code or other applicable tax
law, and all material decisions with respect to the calculation of its taxable
income or other applicable tax law, shall be made in such manner as may be
reasonably determined by the Tax Matters Partner.

          (b) For tax purposes, the most accelerated method of depreciation
acceptable to the Internal Revenue Service will be used by the Company.

                                 ARTICLE VIII.

                             ACCOUNTING AND TAXATION

     SECTION 8.01 ACCRUAL BASIS; FINANCIAL ACCOUNTING CONVENTIONS.

          (a) The books and records of the Company shall be kept on an accrual
basis in U.S. dollars.

          (b) For financial accounting purposes, income and loss of the Company
calculated in accordance with GAAP shall be allocated to the Members in
accordance with Section 7.02 (Allocations of Net Profits and Net Losses). Unless
the Members otherwise agree, the Company will depreciate capital equipment for
financial accounting purposes on a five (5) year straight line schedule.

     SECTION 8.02 MAINTENANCE OF BOOKS OF ACCOUNT. The Company shall keep or
cause to be kept at its principal office, or such other location as the
Operating Committee shall designate full and complete books of account. The
books of account shall be maintained in a manner that provides sufficient
assurance that transactions of the Company are recorded so as to comply with all
applicable laws and to permit (a) the preparation of the Company's consolidated
financial statements in accordance with GAAP consistently applied and (b) the
Members to account for their interest in the Company in accordance with GAAP.

     SECTION 8.03 FINANCIAL STATEMENTS.

          (a) ANNUAL STATEMENTS. As soon as practicable following the end of
each Fiscal Year (and in any event not later than 60 days after the end of such
Fiscal Year), the Company shall prepare and deliver to each Member and each
Member Representative, audited consolidated and consolidating balance sheets of
the Company as of the end of such Fiscal Year and the related consolidated and
consolidating audited statements of operations, Members' capital accounts and
cash flows of the Company for such Fiscal Year (or similar statements if such
statements change as the result of changes in GAAP), together with appropriate
notes to such consolidated financial statements, and in each case setting forth
in comparative form the corresponding figures for the preceding Fiscal Year and
for the budget for the Fiscal Year just completed. Such financial statements
shall be accompanied by (i) the report of the Accountants to the effect that
such financial statements (except for the comparison to the budget) have been
prepared in conformity with GAAP applied on a basis consistent with prior years
(except as otherwise specified in such report) and that the audit of such
financial statements has been performed in accordance with GAAS and (ii) a
report as to all transactions (including the nature, type and amount) between
the Company and each Member, its Parent and its other Affiliates. The Company
shall conduct its business so that such report of the Accountants shall not
contain

                                       21
<PAGE>

any qualifications as to the scope of the audit or with respect to the Company's
compliance with GAAP consistently applied, except for changes in methods of
accounting in which such Accountants concur and except that the foregoing shall
not be deemed to obligate either Member to contribute any capital to the Company
other than as provided in Section 6.01 (Capital Contributions). At the same
time, the Company shall deliver at the Company's sole expense to each Member a
report indicating such Member's share of all items of income, gain, loss,
deduction and credit of the Company for such Fiscal Year on a GAAP basis for
financial reporting purposes. At the time specified in Section 8.05(c)
(Taxation), the Company shall deliver at the Company's sole expense to each
Member any other financial information related to the Company which is
reasonably requested by a Member for Federal, state, local or foreign income or
franchise or other tax purposes.

          (b) QUARTERLY STATEMENTS. As soon as practicable following the end of
each Fiscal Quarter (and in any event not later than fifteen (15) days after the
end of such Fiscal Quarter), the Company shall prepare and deliver to each
Member and each Member Representative unaudited consolidated and consolidating
balance sheets of the Company as of the end of such Fiscal Quarter and the
related unaudited consolidated and consolidating statements of operations,
Members' capital accounts and cash flows of the Company for such Fiscal Quarter
and for the Fiscal Year to date (or similar statements if such statements change
as the result of changes in GAAP), in each case setting forth in comparative
form the corresponding figures for the preceding Fiscal Quarter, for the
corresponding Fiscal Quarter of the prior Fiscal Year and for the budget for
such Fiscal Quarter and for the Fiscal Year to date. At such time, the Company
shall deliver at the Company's sole expense to each Member an estimate of such
Member's share of all items of income, gain, loss, deduction and credit of the
Company for such Fiscal Quarter and for the Fiscal Year to date for Federal
income tax purposes. Such financial statements shall be accompanied by a
certificate of the principal accounting or financial officer of the Company to
the effect that such financial statements have been prepared under such
officer's supervision and that, although such financial statements do not
contain the footnotes and other disclosures required to be presented in interim
financial statements by GAAP, such financial statements, in such officer's
judgment, fairly present the financial condition and results of operations of
the Company as of the date and for the periods indicated, subject to normal
recurring year-end audit adjustments.

          (c) MONTHLY REPORTS. The Company shall prepare and deliver to each
Member and each Member Representative the reports and other information set
forth on Schedule 8.03. Such reports and other information will become available
at the respective times set forth in Schedule 8.03.

          (d) BUSINESS PLAN. Subject to Sections 10.04(c), (d) and (e), by
February 15 prior to the commencement of each Fiscal Year, the Company shall
deliver to each Member a copy of the Business Plan, including the Company's
monthly budgets, for the upcoming Fiscal Year, as approved by the Operating
Committee.

          (e) LEGAL PROCEEDINGS. The Company shall promptly inform each Member
and each Member Representative with regard to litigation, governmental
investigations, material government notices and threatened legal proceedings.

                                       22
<PAGE>

     SECTION 8.04 OTHER REPORTS AND INSPECTION. The Company shall furnish
promptly to each Member such other reports, financial data and information
relating to the Company as such Member may reasonably request and shall require
the Accountants to provide to each Member copies of any document related to the
Company in the possession of the Accountants as such Member may reasonably
request. The Company shall, upon reasonable prior notice and during normal
business hours, make available to each Member and its professional advisors from
time to time as requested by such Member all properties, assets, books of
account, corporate records, contracts and documentation, if any, relating to
employee benefits of the Company, and any other material requested by such
Member for inspection and, in the case of books of account, corporate records,
contracts and documentation, if any, relating to employee benefits, copying, and
shall use reasonable efforts to make available to such Member the Accountants
and the key employees of the Company for interviews to verify any information
furnished or to enable such Member otherwise to review the Company and its
operations. The Company may condition such availability upon the entering into
of reasonable and appropriate confidentiality agreements. Notwithstanding the
foregoing, the Company will not make available to either Member information
provided to the Company on a confidential basis by the other Member without the
consent of such other Member.

     SECTION 8.05 TAXATION.

          (a) CHARACTERIZATION. The Members intend that the Company shall be
treated as a partnership for Federal, state, local and foreign income and
franchise tax purposes and shall take all reasonable action, including the
amendment of this Agreement and the execution of other documents, as may be
reasonably required to qualify for and receive treatment as a partnership for
Federal income tax purposes.

          (b) TAX MATTERS PARTNER. SENA (or its permitted transferee) shall be
the Tax Matters Partner of the Company within the meaning of Code Section
6231(a)(7) and shall act in any similar capacity under applicable state, local
or foreign law (in such capacity, the "Tax Matters Partner"). All reasonable out
of pocket expenses incurred by SENA (or its permitted transferee) while acting
in such capacity shall be paid or reimbursed by the Company. The Tax Matters
Partner shall take such action, if any, as may be reasonably necessary to
constitute SanDisk (or its permitted transferee) as a "notice partner" within
the meaning of Code Section 6231(a)(8).

          (c) TAX RETURNS. The Tax Matters Partner shall prepare or cause the
Accountants to prepare and file on a timely basis the Federal tax returns of the
Company and shall cause all such federal, state, local and any other tax returns
to be transmitted to SanDisk for its review and comment thirty (30) days prior
to the due date therefor (including extensions) if the relevant information is
received by the Tax Matters Partner from the Accountants by April 1 preceding
the date such return is to be filed, or if the information is not received by
the Tax Matters Partner by April 1, as soon as practicable following its receipt
of such information; PROVIDED, HOWEVER, in any event such information shall be
transmitted to SanDisk (or its permitted transferee) not later than 15 days
before the tax return is to be filed. The Tax Matters Partner will consider in
good faith reasonable comments proposed by SanDisk (or its permitted
transferee). The Company will contract with the Accountants to receive the
information or the completed tax returns for delivery by April 1. The Tax
Matters Partner shall cause state, local

                                       23
<PAGE>

and any other tax returns required to be filed by the Company to be prepared and
filed on a timely basis. SanDisk (or its permitted transferee) shall be advised
in advance of such preparation and filing, and, to the extent appropriate, the
Accountants or other accounting firms shall assist with such preparation and
filing. When indicated, the Tax Matters Partner will use tax elections specified
in the Business Plan and the Initial Business Plan. No Member shall file any tax
return that is inconsistent with the tax returns filed by the Company.

     SECTION 8.06 DEPOSIT OF FUNDS. All funds of the Company and its
Subsidiaries not otherwise employed shall be deposited from time to time to its
credit in such banks or trust companies or other depositories or invested in
such other investments held as cash equivalents as the Operating Committee shall
authorize. The funds of the Company and its Subsidiaries shall not be commingled
with the funds of either Member or any Affiliate of either Member.

                                  ARTICLE IX.

                 MEMBERSHIP; DISPOSITION OF MEMBERSHIP INTERESTS

     SECTION 9.01 RESTRICTIONS ON TRANSFER OF MEMBERSHIP INTERESTS.

          (a) Neither SanDisk nor SENA (nor their respective permitted
transferees) shall Transfer any interest in the Company including any of such
Member's Membership Interest, to any Person, except by a Change of Control;
PROVIDED, THAT a Member may transfer all its interest in the Company, including
all its Membership Interest, to an Affiliate and, in the case of SENA, to
Toshiba or an Affiliate of Toshiba, with the prior written consent of the other
Member, which consent shall not be unreasonably withheld; and PROVIDED, FURTHER,
that (i) the transferee agrees in writing to become a party hereto and assumes
all the obligations of the transferring Member hereunder and under each other
Operative Document to which the transferring Member is a party and (ii)
immediately after giving effect to such Transfer, no Event of Default or an
event or condition that with the giving of notice or lapse of time or both would
constitute an Event of Default with respect to the transferee Member shall
exist. Following the effectiveness of any such Transfer, the transferring Member
shall no longer have the transferred right, title or interest in the Company or
any rights under this Agreement and the transferee shall be substituted as a
Member for all purposes of this Agreement. The transferring Member shall,
however, remain responsible for all obligations under this Agreement and the
other Operative Documents for any transferee which is an Affiliate and shall not
be released or discharged from any existing liability or obligation to any
Person. Any subsequent Transfer of an ownership interest in such transferee
Affiliate shall be deemed to constitute a Transfer of a Membership Interest in
the Company requiring compliance with this Section.

          (b) If a Member Transfers its entire interest in the Company pursuant
to Section 9.01(a) (Restriction on Transfer of Membership Interest), the
transferee shall succeed to all the rights and obligations under this Agreement
of such Member.

          (c) A Member may agree to pay amounts equal to distributions received
from the Company to a third party in its sole discretion pursuant to a
Permissible

                                       24
<PAGE>

Assignment Agreement. "Permissible Assignment Agreement" means an agreement
between a Member and another Person (the "Permissible Assignee") if such
agreement:

               (i) provides for the grant by such Member to the Permissible
Assignee of the right to cash distributed to such Member pursuant to Article VI
or XI of this Agreement, but gives the Permissible Assignee no Membership
Interest in the Company or any other rights whatsoever with respect to the
Company;

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

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

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

               (v) provides that such Member is authorized to Transfer its
entire interest in the Company pursuant to Section 9.01(a) (Restriction on
Transfer of Membership Interest) of this Agreement free and clear of any
interest of the Permissible Assignee and without any liability on the part of
the transferee thereunder to the Permissible Assignee; and

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

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

     SECTION 9.02 ADMISSION OF NEW MEMBERS. No Person shall have the right to
become a Member unless and until all the following conditions are satisfied:

          (a) except in the case of a Transfer of a Member's Membership Interest
to its Parent or an Affiliate in accordance with Section 9.01 (Restrictions on
Transfer of Membership Interest), such Person, the terms and conditions of such
Person's admission as a Member and the rights appurtenant to the Membership
Interest to be issued to such Person are approved by all existing Members and,
if applicable, the creation of any new class or group of Membership Interests in
the Company having different rights, powers and duties is reflected in an
amendment to the Articles and to this Agreement;

                                       25
<PAGE>

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

          (c) if requested by the Company, an opinion of counsel, a purchaser
representation letter or other appropriate documentation is furnished to the
Company establishing that the Transfer or issuance of a Membership Interest in
the Company to the new Member will comply with applicable Federal and state
securities laws.

     Except to the extent required by law, the Company shall have no obligation
to recognize or to furnish information or make distributions to any new Member
or any transferee of a Member who does not become a Member in accordance with
Section 9.01 (Restrictions on Transfer of Membership Interest) or this Section.

     SECTION 9.03 WITHDRAWAL PROHIBITED. Except as otherwise expressly permitted
by this Agreement, (i) neither Member may withdraw from the Company and (ii)
neither Member may effect or cause a termination or dissolution of the Company
without the prior written consent of the other Member (which consent may be
withheld in its sole discretion).

     SECTION 9.04 PURCHASE OF ADDITIONAL INTEREST. At any time during the term
of this Agreement and so long as SanDisk is a Member, SanDisk shall have the
right to purchase 0.1% of SENA's Membership Interest in the event that (i)
Toshiba's patent umbrella does not adequately protect the Company or (ii)
dissolution of the Company is commenced pursuant to Article XI hereof. The
purchase price of such Membership Interest shall equal 0.1% of the Company's Net
Book Value.

                                   ARTICLE X.

                        CERTAIN AGREEMENTS OF THE MEMBERS

     SECTION 10.01 (INTENTIONALLY BLANK)

     SECTION 10.02 TAXES AND CHARGES; GOVERNMENTAL RULES. Each Member shall (a)
promptly pay all applicable Taxes and other governmental charges except to the
extent any such Taxes or other charges are being contested in good faith by
appropriate proceedings and (b) comply with all applicable Governmental Rules,
except to the extent that such nonpayment or noncompliance will not have a
material adverse effect on the Company.

     SECTION 10.03 FURTHER ASSURANCES. Each Member shall, at its own cost, do,
execute and perform all such other acts, deeds and documents as the other Member
or the Company may from time to time reasonably require in order to carry out
fully the intents and purposes of this Agreement or to comply with any
applicable Governmental Rule; PROVIDED, THAT no Burdensome Condition shall exist
with respect to such Member or any of its Affiliates in connection therewith.

     SECTION 10.04 DISPUTE RESOLUTION; DEADLOCK RESPECTING BUSINESS PLAN.

                                       26
<PAGE>

          (a) The Members shall endeavor to settle through their representatives
in the Operating Committee any disputes which may arise between them, including
without limitation, failure by the Operating Committee to reach agreement (or
failure to take a vote) on any matter requiring Operating Committee approval
pursuant to Section 5.01(d) (Matters Requiring Approval of Operating Committee).
The Members shall attempt to resolve the issue or proposed action in question,
to the extent practicable, in a manner consistent with the Company's
then-effective Business Plan, unless the issue in dispute is the adoption of a
new Business Plan, in which case provisions of Sections 10.04(c) through (e)
shall apply.

          (b) If (i) the Members are unable to agree on (i) any matter requiring
the approval of the Members pursuant to Section 4.01(a) (Matters Requiring the
Consent of the Members), (ii) the Operating Committee is unable to agree on any
matter requiring the approval of the Operating Committee pursuant to Section
5.01(d) (Matters Requiring the Approval of Operating Committee) (other than the
approval of any Business Plan, with respect to which the failure to agree shall
be governed by Section 10.04(c), (d) and (e)) or (iii) the Members or the
Operating Committee are otherwise unable to resolve a dispute on any other item
(other than the approval of any Business Plan, with respect to which the failure
to agree shall be governed by Section 10.04(c), (d) and (e)), then either Member
may bring the matter to the attention of the Vice President, Semiconductor
Company of Toshiba, and the SanDisk General Manager, NAND Division (the
"Designated Individuals"), who will attempt to find a resolution. If the matter
has not been resolved within 30 days of referral to the Designated Individuals,
the matter will be referred to the Management Committee (as defined in the
Master Agreement) for a final decision, which decision will be final and binding
on the Company and the Members with respect to any matter specified in Sections
10.04(b)(i) and (ii) above. If agreement is reached by the Management Committee,
the mutually agreed resolution shall be implemented by the Company. Should no
solution be agreed upon within thirty (30) days after submission of the matter
to the Management Committee with respect to the matters specified in (iii)
above, such matter shall be submitted to arbitration in accordance with Section
10.03(b) (Dispute Resolution) of the Master Agreement. Should no solution be
agreed upon within sixty (60) days after submission of the matter to the
Management Committee with respect to the matters specified in Sections
10.04(b)(i) and (ii) above, then the action being requested will not occur,
unless it is already included in the then current Business Plan.

          (c) If by February 15 of any calendar year during the term of this
Agreement, commencing February 15, 2004, the Operating Committee and the Members
have not approved and agreed upon a Business Plan for the upcoming Fiscal Year,
then either Member may refer the dispute to the Management Committee for a
decision, which decision shall be final and binding on the Company and the
Members. If a decision is reached by mutual agreement of the Management
Committee, the decision shall be implemented by the Company. Should no decision
be reached within ninety (90) days after submission, then, unless the Members
have agreed to continue operations under the existing Business Plan until a new
Business Plan is approved, then within ten (10) Business Days thereafter either
Member may elect by written notice to the other Member to declare a deadlock
("Deadlock").

          (d) Within thirty (30) days after a Member has notified the other
Member of a Deadlock, either Member (the "Initiating Member") may submit to the
other Member (the "Responding Member") a written irrevocable notice (the
"Deadlock Dissolution

                                       27
<PAGE>

Notice") to the effect that the Initiating Member offers to sell to the
Responding Member or its designee the Initiating Member's Membership Interest
for a cash purchase price equal to the Net Book Value of the Company multiplied
by that fraction of the Members' aggregate Capital Accounts represented by the
Capital Account of the Initiating Member.

          (e) The Responding Member may accept such offer by written response to
the Initiating Member within forty-five (45) days of receipt of the Deadlock
Dissolution Notice indicating that the Responding Member elects to purchase the
Membership Interest of the Initiating Member. If the Responding Member declines
to exercise its right to purchase the Membership Interest of the Initiating
Member pursuant to this Section or fails to respond (or if both Members submit
Deadlock Dissolution Notices), the Company shall be dissolved pursuant to
Section 11.01(d) (Events of Dissolution), at the end of a one-year period for
the wind-down of operations commencing with the receipt of the Deadlock
Dissolution Notice by the Responding Member. During said one-year period, the
Company's business shall be conducted in accordance with the most recently
approved Business Plan except that additional capital expenditures will not be
made except as required for line maintenance.

     SECTION 10.05 REMEDIES UPON EVENT OF DEFAULT; TERMINATION ON BREACH. If
there has occurred and is continuing an Event of Default with respect to a
Member (upon such occurrence, such Member is referred to herein as the
"Defaulting Member"), in addition to all other remedies available to the Company
or the other Member (the "Nondefaulting Member"), whether under any of the
Operative Documents or other agreements or by law (including pursuant to Section
13.1-1027 of the Act), the Nondefaulting Member shall have the option to take
one or more of the following actions:

          (a) give written notice to the Defaulting Member of its intention to
acquire the entire Membership Interest of the Defaulting Member for a payment in
cash of an amount equal to that portion of the Company's Net Book Value equal to
the Defaulting Member's Percentage; and/or

          (b) elect to dissolve the Company pursuant to Section 11.03
(Dissolution Upon Event of Default), in which case the affairs of the Company
shall be wound up and the Company shall be dissolved in accordance with Article
XI (Dissolution).

     SECTION 10.06 (INTENTIONALLY BLANK)

     SECTION 10.07 MECHANICS OF SALE.

          (a) The closing of any purchase and sale of a Membership Interest
pursuant to Section 10.04(e) (Dispute Resolution; Deadlock Respecting Business
Plan), 10.05(a) (Remedies Upon Event of Default; Termination on Breach), 11.04
(Dissolution by Unilateral Option) or 11.05 (Dissolution Upon Notice) shall take
place not later than the thirtieth (30th) Business Day after notice of the
purchase is given, as the case may be, except that such period shall be extended
as necessary in order to comply with any Governmental Rule. The purchasing
Member shall pay for the Membership Interest being acquired by wire transfer of
immediately available funds to an account specified by the selling Member. The
selling Member shall execute all documents necessary to effect the conveyance of
such interest in the Company, free

                                       28
<PAGE>

and clear of all Liens, to the purchasing Member. In addition, the Members shall
enter into an indemnity and release agreement in a form reasonably satisfactory
to each Member indemnifying and holding harmless the selling Member and its
Parent and Affiliates for liabilities or claims made after the date of the
purchase and sale under any guarantees or other agreements supporting the
obligations of the Company which may have been extended by the selling Member,
its Parent or any of its Affiliates. The Members shall also reach agreement on a
reasonable transition plan of up to six months in connection with services
provided to the Company by Seconded Employees.

          (b) If a Member elects to acquire all the interest of the other Member
in the Company pursuant to Section 10.04(e) (Deadlock), 10.05(a) (Event of
Default), 11.04 (Dissolution by Unilateral Option) or 11.05 (Dissolution Upon
Notice), such Member shall be obligated to take all actions required of it to
consummate the applicable purchase and sale on the date determined pursuant to
Section 10.07(a) (Mechanics of Sale). If a Member has the right to purchase the
Membership Interest of the other Member, such Member shall have the right to
assign the right to purchase to any other Person.

                                   ARTICLE XI.

                                   DISSOLUTION

     SECTION 11.01 EVENTS OF DISSOLUTION. The Company shall be dissolved and
shall commence winding up its affairs upon the first to occur of the following:

          (a) the expiration of the term of the Company pursuant to Section 2.04
(Term; Extension);

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

          (c) the election of the Nondefaulting Member pursuant to Section
11.03(Dissolution Upon Event of Default);

          (d) an impasse with respect to the adoption of a Business Plan
pursuant to Section 10.04(c) (Dispute Resolution; Deadlock Respecting Business
Plan) and either (i) a Deadlock Dissolution Notice is given with respect to such
impasse and the Responding Member does not elect to purchase the Membership
Interest of the Initiating Member, or (ii) both Members give Deadlock
Dissolution Notices with respect to such impasse, then upon the first
anniversary of receipt of a Deadlock Dissolution Notice;

          (e) by SENA, if SENA elects to dissolve the Company pursuant to
Section 11.04(ii) (Dissolution by Unilateral Option);

          (f) the entry of a decree of judicial dissolution under Section
13.1-1047 of the Act;

                                       29
<PAGE>

          (g) the bankruptcy, death, dissolution, expulsion or incapacity of a
Member and, in the case of SENA, Toshiba, or the occurrence of any other event
which terminates the membership of a Member in the Company ("Bankruptcy Event");
or

          (h) notice by either Member to the other Member and such other Member
does not elect to purchase the Membership Interest of the other Member pursuant
to Section 11.05 (Dissolution Upon Notice). SECTION 11.02 _____ DISSOLUTION BY
AGREEMENT. The Company may be dissolved at any time by the unanimous written
consent of the Members.

     SECTION 11.03 DISSOLUTION UPON EVENT OF DEFAULT. During the occurrence and
continuation of an Event of Default (other than a Bankruptcy Event) with respect
to a Member, the Non-defaulting Member may elect by written notice to the
Defaulting Member to dissolve the Company, in which event the Company shall be
dissolved and the Members shall forthwith take all actions necessary to wind up
the affairs of the Company in accordance with Section 11.06 (Winding Up). This
Section shall not be construed to limit the rights of the Nondefaulting Member
under Section 10.05 (Remedies Upon Event of Default) or to seek damages from the
Defaulting Member or any other Person for the breach of its obligations under
any of the Operative Documents.

     SECTION 11.04 DISSOLUTION BY UNILATERAL OPTION. At any time between April
1, 2003 and March 31, 2004, SanDisk may by giving written notice to SENA, elect
to withdraw from the Company, in which case, SENA must directly, or through an
Affiliate, either (i) acquire all of SanDisk's interest in the Company one (1)
year following SanDisk's notice to withdraw ("Termination Date") by paying
SanDisk in immediately available U.S. Dollars, 49.9% of the Net Book Value of
the Company on the Termination Date and increased or decreased, as the case may
be, for any cash contributions by or distributions to the Members after the date
of the notice, or (ii) dissolve the Company and wind-up the affairs of the
Company in accordance with Section 11.06 (Winding Up) within one (1) year of the
notice of withdrawal and make such payment to SanDisk on the Termination Date.

     SECTION 11.05 DISSOLUTION UPON NOTICE. By written notice given by SENA or
SanDisk ("Notifying Party") to the other party ("Notified Party") of the
Notifying Party's election to dissolve, if such notice is given during the one
(1) year period following the eighth anniversary of the formation of the
Company, in which case, unless the Notified Party directly, or through an
Affiliate, elects in writing within three months of receiving such notice, to
acquire all of the Notifying Party's interest in the Company for a payment of an
amount equal to that portion of the Company's Net Book Value equal to the
Notifying Party's Percentage in immediately available U.S. Dollars, the Company
shall be dissolved and such Members will meet and establish a plan for winding
up and dissolving the Company within the one (1) year period following the
giving of such notice to withdraw.

     SECTION 11.06 WINDING UP.

          (a) Upon the dissolution of the Company, the Members shall proceed as
promptly as practicable to (i) wind-up the affairs of the Company and satisfy
the Company's

                                       30
<PAGE>

liabilities and (ii) dispose of the Company's assets as quickly as possible
consistent with obtaining the full fair market value of the Company, preferably,
to the extent it is commercially practicable to do so, by selling the Company as
a going concern; PROVIDED, HOWEVER, neither Member shall be under any obligation
to extend the terms of any Operative Document or to offer to enter into any
other agreement with a prospective purchaser of the Company for the purchase or
sale of goods or services or the use of facilities or any other business
arrangement. In connection with a sale of the Company's assets under clause
(ii), either Member or any Affiliate of either Member shall have a right of
first offer to acquire the Company's tangible personal property in the
liquidation process and may also acquire such property through participation at
auction except in the event of a dissolution pursuant to Section 11.03
(Dissolution Upon Event of Default), in which event the Defaulting Member and
its Affiliates shall not have such right of first offer to acquire the Company's
tangible personal property. Each of the Members shall be furnished with a
statement setting forth the assets and liabilities of the Company as of the date
of the complete liquidation of the Company. The Accountants shall review the
final accounting and shall render their opinion with respect thereto.

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

     SECTION 11.07 LIQUIDATION PROCEEDS.

          (a) In the case of the dissolution and liquidation of the Company, the
Company may make a distribution in kind. Any cash and all distributions in kind
that are to be distributed pursuant to Section 6.02(a) (Distributions) shall be
distributed to the Members pro rata in accordance with their respective positive
Capital Accounts, as adjusted pursuant to Section 7.01 (Capital Accounts) to
reflect all prior Company operations (including any gains or losses arising from
the sale of any assets of the Company in connection with such dissolution and
liquidation and any hypothetical gains or losses as provided in this Section
with respect to any asset distributed in kind). If any asset of the Company is
to be distributed in kind, such asset shall be valued to determine the amount of
Net Profits or Net Losses that would result if such asset were to be sold at its
fair market value, and such Net Profits or Net Losses shall be allocated to the
Capital Accounts of the Members in accordance with Section 7.02 (Allocation of
Net Profits and Net Losses).

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

               (i) first, to creditors, including Members who are creditors, to
the extent permitted by law, in satisfaction of liabilities of the Company,
other than for distributions to Members pursuant to Section 6.02
(Distributions); and

               (ii) second, to Members in accordance with their positive Capital
Account Balance as described in Section 11.07(a) (Liquidation Proceeds);

                                       31
<PAGE>

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

          (c) Any distribution made pursuant to this Section shall be made no
later than the later of (i) the end of the calendar year during which the
liquidation is completed and (ii) ninety (90) days after the completion of the
liquidation.

     SECTION 11.08 DEFICIT CAPITAL ACCOUNTS. Notwithstanding anything to the
contrary contained in this Agreement, and notwithstanding any custom or rule of
law to the contrary, the deficit, if any, in the Capital Account of any Member
upon dissolution of the Company shall not be an asset of the Company and such
Member shall not be obligated to contribute such amount to the Company to bring
the balance of such Member's Capital Account to zero.

     SECTION 11.09 ARTICLES OF DISSOLUTION. On completion of the winding-up of
the Company pursuant to Section 13.1-1050 of the Act and the distribution of
Company assets as provided herein, the Company is terminated, and the Members
(or such other Person or Persons as the Act may require or permit) shall file a
certificate of cancellation with the State Corporation Commission of the
Commonwealth of Virginia pursuant to Section 13.1-1050 of the Act and take such
other actions as may be necessary to terminate the Company.

                                  ARTICLE XII.

                          INDEMNIFICATION AND INSURANCE

     SECTION 12.01 INDEMNIFICATION.

          (a) Subject to Section 12.01(c), the Company shall indemnify each
Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (including an action by or in the
right of a Member or the Company), by reason of the fact that such Person is or
was a Member or is or was or has agreed to become a Member Representative or is
or was serving or has agreed to serve at the request of the Company as a
director, officer, employee or agent of the Company or of another partnership,
corporation, joint venture, trust or other enterprise, arising from any action
alleged to have been taken in any such capacity or by reason of any liability or
obligation of the Company, against any and all losses, damages, liabilities,
costs, charges, expenses (including interest, penalties and reasonable
attorneys' fees and expenses), judgments, fines and amounts paid in settlement
(collectively, "Losses") actually and reasonably incurred by him or on his
behalf in connection with such action, suit or proceeding and any appeal
therefrom. Without limiting the generality of the foregoing, any of such Losses
shall be deemed to arise out of a Company liability or obligation if it arises
out of or is based upon the conduct of the business of the Company (or any of
its Subsidiaries) or the ownership of the property of the Company (or any of its
Subsidiaries).

          (b) The indemnification provided under this Section shall inure to the
benefit of the successors, heirs and personal representatives of any Person
entitled to the benefit of such indemnification. Such indemnification shall be a
contract right and shall include the

                                       32
<PAGE>

right to be paid advances of reasonable expenses incurred by any such Person in
connection with such action, suit or proceeding.

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

          (d) The termination of any action, suit or proceeding by judgment,
order, settlement, conviction or upon a plea of NOLO CONTENDERE or its
equivalent shall not, of itself, create a presumption that the indemnified
Person did not meet the standard set forth in Section 12.01(c)
(Indemnification).

     SECTION 12.02 INSURANCE. The Company may, to the fullest extent permitted
by law, purchase and maintain insurance against any liability that may be
asserted against any Person entitled to indemnity pursuant to Section 12.01.

     SECTION 12.03 INDEMNIFICATION BY THE MEMBERS.

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

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

     SECTION 12.04 ASSERTION OF CLAIMS.

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

                                       33
<PAGE>

obligations hereunder, except to the extent that the Indemnifying Party is
actually prejudiced by the failure to so notify promptly.

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

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

                                  ARTICLE XIII.

                                  MISCELLANEOUS

     SECTION 13.01 GOVERNING LAW. This Agreement shall in all respects be
governed by and construed in accordance with the internal laws of the
Commonwealth of Virginia applicable to agreements made and to be performed
entirely within such Commonwealth, without regard to the conflict of laws
principles of such Commonwealth.

     SECTION 13.02 EFFECTIVENESS. This Agreement shall become effective on the
Closing Date.

                     [REST OF PAGE INTENTIONALLY LEFT BLANK]

                                       34
<PAGE>

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

                                        SEMICONDUCTOR NORTH
                                        AMERICA, INC.

                                        By: /s/ Ichiro Hirata
                                           _____________________________________
                                           Name:  Ichiro Hirata
                                           Title: President

                                        SANDISK CORPORATION

                                        By: /s/ Eli Harari
                                           _____________________________________
                                           Name:  Eli Harari
                                           Title: President and CEO

                                       35
<PAGE>

                      SCHEDULE 8.03 TO OPERATING AGREEMENT

                                 MONTHLY REPORTS

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

REPORTS TO MEMBERS
------------------
<TABLE>
<CAPTION>

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

                                       36

<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>

                                       iv<PAGE>
                                                                   EXHIBIT 10.35
                  COMMON R&D AND PARTICIPATION AGREEMENT

This 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 is developing certain manufacturing process technology common
to Toshiba semiconductor products, including NAND Flash Memory Products as
defined in Section 2.02 of the Master Agreement among Semiconductor North
America, Inc., Toshiba and SanDisk; and

WHEREAS, SanDisk desires to participate in Toshiba's development of said process
technology in order to enhance a common process technology used in NAND Flash
Memory Products;

WHEREAS, it is understood that such enhanced common process technology will be
transferred into production at Toshiba's manufacturing facilities (the Yokkaichi
Facility and Dominion Semiconductor L.L.C.) from which both parties will
purchase NAND Flash Memory Products.

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

ARTICLE 1.        DEFINITIONS

1.1       "Contract Technology" shall mean the manufacturing process technology
          (with design rules of 0.16(microns), 0.13(microns)          *
          the details of which are set forth in Exhibit A attached hereto) for
          Toshiba's NAND Flash Memory Product(s).

1.2       "AMC" shall mean the Advanced Microelectronics Center, Toshiba's
          development engineering facility located in Yokohama, Japan.

1.3       "Assignees" shall mean SanDisk's engineers from the technology areas
          of process/device/design, assigned to participate in the Development
          Work (as defined in Section 2.1 below) to be performed at AMC or other
          Toshiba facilities to be mutually agreed upon by the parties hereto.

1.4      "Effective Date" shall mean the Closing Date.

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

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

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

<PAGE>

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

1.7       "Agreement" shall mean this Common R&D and Participation Agreement
          together with any Exhibits, Schedules, Appendices and Attachments
          hereto and the Rules Document.

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

1.9       "Residuals" shall mean that technical information which may be
          retained in the memories of Assignees who have had rightful access to
          Toshiba's proprietary information and Contract Technology.

ARTICLE 2.        DEVELOPMENT COLLABORATION

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

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

2.3      SanDisk shall be responsible for the living, traveling and all other
         out-of-pocket expenses for its Assignees.

                                       2

<PAGE>

ARTICLE 3.        OWNERSHIP

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

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

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

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

3.5      Any right, title and interest in, to and under Jointly Developed
         Patents shall be jointly owned by Toshiba and SanDisk. Each party shall
         be free to use such Jointly Developed Patents for any purpose and shall
         have the right to grant non-exclusive licenses to any third party
         without the consent of the other party. Both parties shall promptly
         agree on which of them shall file and prosecute the first patent
         application and which countries' corresponding applications shall be
         filed and by whom. All expenses incurred in obtaining and maintaining
         such patents shall be equally shared by the parties; PROVIDED THAT if
         one party elects not to seek or maintain such patents in any particular
         country or not to share equally in the expense thereof, the other party
         shall have the right to seek or maintain such patents in said country
         at its own expense and shall have full control over the prosecution and
         maintenance thereof even though title to any patent issuing thereon
         shall be joint. The party electing not seek or maintain such patents
         shall give the other party any necessary assistance required for the
         preparation and prosecution of such patents filed or maintained by the
         other party.

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

ARTICLE 4.        LICENSE

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

                                       3

<PAGE>

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

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

4.4      Toshiba shall prepare and transfer to the Yokkaichi Facility and
         Dominion Semiconductor L.L.C. documentation for NAND process concerning
         the Contract Technology for production at the Yokkaichi Facility and
         Dominion Semiconductor, L.L.C.; PROVIDED, HOWEVER, that SanDisk may
         access to such documentation at such facilities but shall have no right
         to disclose or transfer them to any third party.

ARTICLE 5.        COMMON R&D EXPENDITURE

5.1      Provided Toshiba continues to develop and advance NAND Flash
         Memory technology for the benefit of both parties pursuant to the
         Operative Documents, SanDisk hereby agrees to share Toshiba's Common
         R&D expenditures and shall pay to Toshiba its portion of such Common
         R&D expenditures in accordance with this Section 5.1:

         (i)      From the Effective Date through and including March 31, 2002:

                  SanDisk will share in Toshiba's Common R&D expenditures as set
                  forth in Table A below, and SanDisk shall pay Toshiba for such
                  Common R&D expenditures in the amounts and on or prior to the
                  dates provided in Table B as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                       Table A
----------------------------------------------------------------------------------------------------------------------
                                     SanDisk's Allocation of Common R&D Expenses
----------------------------------------------------------------------------------------------------------------------
                    2000                                                2001                                 2002
----------------------------------------------------------------------------------------------------------------------
      2Q              3Q             4Q            1Q             2Q            3Q             4Q             1Q
---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
                                        (amounts incurred in millions of Yen)
----------------------------------------------------------------------------------------------------------------------
<S>                   <C>           <C>            <C>           <C>            <C>            <C>           <C>
       *               *             *              *             *              *              *             *
---------------- -------------- ------------- -------------- ------------- -------------- -------------- -------------
</TABLE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
<S>                             <C>                         <C>                          <C>
                                                       Table B
----------------------------------------------------------------------------------------------------------------------
                                     Payment by SanDisk for Common R&D Expenses
----------------------------------------------------------------------------------------- ----------------------------
                                          2002                                                       Total
----------------------------------------------------------------------------------------- ----------------------------
           June 30                     September 30                  December 31
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

                                        4

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

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                        (amounts payable in millions of Yen)
----------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                          <C>                          <C>
              *                              *                            *                            *
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

Notwithstanding the foregoing, in the event of the termination of this Agreement
(i) on or before March 31, 2002, SanDisk shall be obligated immediately to pay
its share of the allocated Common R&D expenses accrued through the date of such
termination (pro-rated in the event such termination occurs prior to the end of
a quarter) as set forth in Table A, (ii) after March 31, 2002 but prior to
December 31, 2002, SanDisk's shall be obligated immediately to pay any unpaid
amount set forth in Table B.

         (ii)     After March 31, 2002:

                  The parties acknowledge that after March 31, 2002, it will be
                  difficult to predetermine Toshiba's total Common R&D
                  expenditures and a fixed allocation of Common R&D expenditures
                  for SanDisk. Therefore, after March 31, 2002, the payment by
                  SanDisk to Toshiba for Common R&D expenditures will be based
                  on a percentage of SanDisk's Net Sales (as hereinafter
                  defined), and calculated and paid as follows:

                  Within thirty days of the end of each calendar quarter based
                  on SanDisk's Net Sales of NAND Flash Memory Products for the
                  quarter just ended as follows:

                    a)   * of the first US $ 100 million for the quarter
                           reported;

                    b)   * of the next US $ 100 million for the quarter
                           reported; and

                    c)   * of net sales in excess of US $ 200 million per
                           quarter.

                  For the purpose of this Article, "Net Sales" shall mean the
                  invoice price for NAND Flash Memory Products billed by
                  SanDisk.

          (iii)    Notwithstanding (ii) above, SanDisk's quarterly
contribution for Common R&D pursuant to (i) and (ii) above shall not exceed the
sum of (a)       *      of the total Common R&D annual expenditure of
the Semiconductor Company of Toshiba, as notified to SanDisk by Toshiba at the
beginning of each of Toshiba fiscal year ("Total R&D Budget") for the first
  *      of the Total R&D Budget and (b)          *           of the
portion of such Total R&D Budget in excess of        *        .

          (iv)      Notwithstanding (iii) above, in the event that the Total
R&D Budget is likely to substantially exceed      *       for any calendar
year due to the development of the NAND Flash Memory technology with design
rules of          *            micron or less and/or development of such
technology applicable to twelve inches wafer, both parties shall discuss in good
faith to determine the fair methodology to share such Toshiba's Common R&D
expenditures.

                                       5

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

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

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

5.2      Payments of the fees provided for in Article 5.1 (other than
         Article 5.1(i), which payments shall be made on or before the dates
         specified therein) shall be made by SanDisk within sixty (60) days
         after receiving the invoice to be issued by Toshiba at the end of each
         applicable calendar quarter. For the purpose of Toshiba's issuance of
         such invoices, SanDisk shall submit to Toshiba, within 30 days
         following the end of each quarter after April 1, 2002, a written report
         stating the quantity and Net Sales of NAND Flash Memory Products sold
         or otherwise disposed of by SanDisk during the applicable quarter.

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

         Toshiba Corporation, Account No. 0949155, The Sakura Bank, Ltd., Tokyo
         Main Office 1-1-2, Yuraku-cho, Chiyoda-ku, Tokyo 100, Japan (Tel:
         81-3-3501-1111)

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

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

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

                                       6

<PAGE>

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

ARTICLE 6.        WARRANTY

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

6.2      Nothing contained in this Agreement shall be construed as:

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

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

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

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

ARTICLE 7.        LIMITATION OF LIABILITY

IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL,
CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGE OF ANY KIND, (INCLUDING WITHOUT
LIMITATION LOSS OF PROFIT OR DATA) WHETHER OR NOT ADVISED OF THE POSSIBILITY OF
SUCH LOSS.

ARTICLE 8.        CONFIDENTIALITY

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

                                       7

<PAGE>

8.2      During the ten (10) year period following receipt of such
         information, the receiving party shall keep any Confidential
         Information, including but not limited to the technical information
         SanDisk has access to at AMC during the course of the development of
         the Contract Technology hereunder, in strict confidence, and shall not
         disclose such Confidential Information to any third party without prior
         written consent of the disclosing party. The receiving party shall
         maintain the Confidential Information with at least the same degree of
         care that the receiving party uses to protect its own strictly
         confidential information, but no less care than is reasonable under the
         circumstances. Further, the receiving party shall not use the
         Confidential Information for any purposes other than for the
         development of the Contract Technology hereunder, except as otherwise
         provided herein.

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

8.4      The confidentiality obligation set forth in Articles 8.2 and 8.3
         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 hereunder; or

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

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

                                       8

<PAGE>

ARTICLE 9.        TERM AND TERMINATION

9.1      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.
         This Agreement shall automatically terminate upon termination of the
         Master Agreement.

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

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

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

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

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

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

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

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

9.4      The provisions of Articles 3, 6, 7, 8, 9 and 10 shall survive
         any termination or expiration of this Agreement. The provision of
         Article 4 shall survive the expiration of this Agreement, PROVIDED THAT
         SanDisk has paid to Toshiba the total amount of fees required to be
         paid in Article 5.

ARTICLE 10.       GENERAL PROVISIONS

10.1     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

                                       9

<PAGE>

         confirmed or acknowledged, to the following or to such changed address
         as may have been previously specified in writing by the addressed
         party:

         If to Toshiba:

                  (For technical coordination 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

                           (For general contract matters)

                  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: 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

                  If to SanDisk:

                           (For technical coordination matters)

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

                                       10

<PAGE>

                           (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

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

10.3     Neither party shall export or re-export, directly or indirectly,
         any technical information disclosed hereunder or direct product thereof
         to any destination prohibited or restricted by the export control
         regulations of Japan 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 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.

10.4     The Rules of Construction and Documentary Conventions set forth
         in the Definitions, Rules of Construction and Documentary Conventions
         attached as Appendix A shall apply to, and are hereby incorporated in,
         this Agreement.

                  [Rest of Page Intentionally Blank]

                                       11

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate, as of the date written below, by their 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

                                       12

<PAGE>

                                  EXHIBIT A
                              (Contract Technology)

1.       Toshiba's 0.16(micron) NAND Flash memory process:

                  minimum gate length: 0.16(micron)

2.       Toshiba's 0.13(micron) NAND Flash memory process:

                  minimum gate length: 0.13(micron)

3.       Toshiba's        *          micron NAND Flash memory process:

                  minimum gate length:         *           micron

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

                                    EXHIBIT B
                                         *

(1)          *

(2)          *

(3)          *

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

<PAGE>

                                                                      APPENDIX A

                     DEFINITIONS, RULES OF CONSTRUCTION AND
                             DOCUMENTARY CONVENTIONS

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

                                    ARTICLE I

                                   DEFINITIONS

     The following terms shall have the specified meanings:

     "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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}]]