{"id":42400,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/joint-operating-agreement-for-flash-forward-ltd-sandisk-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"joint-operating-agreement-for-flash-forward-ltd-sandisk-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/joint-operating-agreement-for-flash-forward-ltd-sandisk-corp.html","title":{"rendered":"Joint Operating Agreement for Flash Forward Ltd. – SanDisk Corp. and Toshiba Corp."},"content":{"rendered":"
\n<\/p>\n<\/p>\n<\/p>\n

OPERATING AGREEMENT OF FLASH FORWARD, LTD.<\/strong>\n<\/p>\n

\n<\/p>\n

Dated as of [<\/strong>__]<\/strong>, 2010<\/p>\n

\n<\/p>\n

between<\/p>\n

\n<\/p>\n

TOSHIBA CORPORATION<\/p>\n

\n<\/p>\n

and<\/p>\n

\n<\/p>\n

SANDISK FLASH B.V.<\/p>\n

\n<\/p>\n<\/p>\n<\/p>\n

\n<\/p>\n<\/p>\n
\n<\/p>\n

TABLE OF CONTENTS<\/strong><\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n\n

Page<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

1.<\/p>\n<\/td>\n

\n

Definitions, Rules of Construction and Documentary Conventions<\/p>\n<\/td>\n

\n

1<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

1.1<\/p>\n<\/td>\n

\n

Certain Definitions<\/p>\n<\/td>\n

\n

1<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

1.2<\/p>\n<\/td>\n

\n

Additional Definitions<\/p>\n<\/td>\n

\n

1<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

1.3<\/p>\n<\/td>\n

\n

Rules of Construction and Documentary Conventions<\/p>\n<\/td>\n

\n

3<\/p>\n<\/td>\n<\/tr>\n

\n

2.<\/p>\n<\/td>\n

\n

General Provisions<\/p>\n<\/td>\n

\n

3<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

2.1<\/p>\n<\/td>\n

\n

Ownership of Interests; Capital Increase<\/p>\n<\/td>\n

\n

3<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

2.2<\/p>\n<\/td>\n

\n

Name<\/p>\n<\/td>\n

\n

3<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

2.3<\/p>\n<\/td>\n

\n

Principal Office<\/p>\n<\/td>\n

\n

3<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

2.4<\/p>\n<\/td>\n

\n

Term; Extension<\/p>\n<\/td>\n

\n

3<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

2.5<\/p>\n<\/td>\n

\n

Scope of Activity<\/p>\n<\/td>\n

\n

3<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

2.6<\/p>\n<\/td>\n

\n

Powers<\/p>\n<\/td>\n

\n

3<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

2.7<\/p>\n<\/td>\n

\n

Articles of Incorporation<\/p>\n<\/td>\n

\n

3<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

2.8<\/p>\n<\/td>\n

\n

Company Actions<\/p>\n<\/td>\n

\n

3<\/p>\n<\/td>\n<\/tr>\n

\n

3.<\/p>\n<\/td>\n

\n

Business Operations<\/p>\n<\/td>\n

\n

4<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

3.1<\/p>\n<\/td>\n

\n

Business Dealings with the Company<\/p>\n<\/td>\n

\n

4<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

3.2<\/p>\n<\/td>\n

\n

Other Activities<\/p>\n<\/td>\n

\n

4<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

3.3<\/p>\n<\/td>\n

\n

Personnel<\/p>\n<\/td>\n

\n

4<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

3.4<\/p>\n<\/td>\n

\n

Business Plans and Related Matters<\/p>\n<\/td>\n

\n

4<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

3.5<\/p>\n<\/td>\n

\n

Standard of Care<\/p>\n<\/td>\n

\n

5<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

3.6<\/p>\n<\/td>\n

\n

Use of Names<\/p>\n<\/td>\n

\n

5<\/p>\n<\/td>\n<\/tr>\n

\n

4.<\/p>\n<\/td>\n

\n

Actions by the Members<\/p>\n<\/td>\n

\n

6<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

4.1<\/p>\n<\/td>\n

\n

Matters Requiring the Approval of the Members<\/p>\n<\/td>\n

\n

6<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

4.2<\/p>\n<\/td>\n

\n

General Meetings of Members<\/p>\n<\/td>\n

\n

7<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

4.3<\/p>\n<\/td>\n

\n

Restrictions on Members<\/p>\n<\/td>\n

\n

8<\/p>\n<\/td>\n<\/tr>\n

\n

5.<\/p>\n<\/td>\n

\n

Management and Operations of Company<\/p>\n<\/td>\n

\n

8<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

5.1<\/p>\n<\/td>\n

\n

Meetings of the Board of Executive Officers<\/p>\n<\/td>\n

\n

8<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

5.2<\/p>\n<\/td>\n

\n

Officers; Employees<\/p>\n<\/td>\n

\n

12<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

5.3<\/p>\n<\/td>\n

\n

Y5 Representatives; Y5 Operating Committee<\/p>\n<\/td>\n

\n

13<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

5.4<\/p>\n<\/td>\n

\n

Insurance<\/p>\n<\/td>\n

\n

13<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

5.5<\/p>\n<\/td>\n

\n

Records<\/p>\n<\/td>\n

\n

14<\/p>\n<\/td>\n<\/tr>\n

\n

6.<\/p>\n<\/td>\n

\n

Capital Contributions; Distributions<\/p>\n<\/td>\n

\n

14<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

6.1<\/p>\n<\/td>\n

\n

Capital Contributions<\/p>\n<\/td>\n

\n

14<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

6.2<\/p>\n<\/td>\n

\n

Distributions<\/p>\n<\/td>\n

\n

15<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

6.3<\/p>\n<\/td>\n

\n

No Interest<\/p>\n<\/td>\n

\n

15<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

6.4<\/p>\n<\/td>\n

\n

Return of Capital Contributions<\/p>\n<\/td>\n

\n

15<\/p>\n<\/td>\n<\/tr>\n

\n

7.<\/p>\n<\/td>\n

\n

Additional Contributions<\/p>\n<\/td>\n

\n

15<\/p>\n<\/td>\n<\/tr>\n

\n

8.<\/p>\n<\/td>\n

\n

Accounting and Taxation<\/p>\n<\/td>\n

\n

15<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

8.1<\/p>\n<\/td>\n

\n

Financial Accounting Conventions<\/p>\n<\/td>\n

\n

15<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

8.2<\/p>\n<\/td>\n

\n

Maintenance of Books of Account<\/p>\n<\/td>\n

\n

15<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

8.3<\/p>\n<\/td>\n

\n

Financial Statements<\/p>\n<\/td>\n

\n

16<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

8.4<\/p>\n<\/td>\n

\n

Other Reports and Inspection<\/p>\n<\/td>\n

\n

17<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

8.5<\/p>\n<\/td>\n

\n

Deposit of Funds<\/p>\n<\/td>\n

\n

17<\/p>\n<\/td>\n<\/tr>\n

\n

9.<\/p>\n<\/td>\n

\n

Share of Contribution; Disposition of Interests<\/p>\n<\/td>\n

\n

18<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

9.1<\/p>\n<\/td>\n

\n

Restrictions on Transfer of Interests<\/p>\n<\/td>\n

\n

18<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

9.2<\/p>\n<\/td>\n

\n

Admission of New Members<\/p>\n<\/td>\n

\n

19<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

9.3<\/p>\n<\/td>\n

\n

Withdrawal Prohibited<\/p>\n<\/td>\n

\n

19<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

9.4<\/p>\n<\/td>\n

\n

Purchase of Additional Interest<\/p>\n<\/td>\n

\n

19<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

i<\/p>\n

\n

\n<\/p>\n

TABLE OF CONTENTS<\/strong><\/p>\n

\n

(continued)<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n\n

Page<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

10.<\/p>\n<\/td>\n

\n

Certain Agreements of the Members<\/p>\n<\/td>\n

\n

20<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

10.1<\/p>\n<\/td>\n

\n

Taxes and Charges; Governmental Rules<\/p>\n<\/td>\n

\n

20<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

10.2<\/p>\n<\/td>\n

\n

Further Assurances<\/p>\n<\/td>\n

\n

20<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

10.3<\/p>\n<\/td>\n

\n

Dispute Resolution; Deadlock<\/p>\n<\/td>\n

\n

21<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

10.4<\/p>\n<\/td>\n

\n

Remedies Upon Event of Default; Termination on Breach<\/p>\n<\/td>\n

\n

21<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

10.5<\/p>\n<\/td>\n

\n

Mechanics of Sale<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

\n

11.<\/p>\n<\/td>\n

\n

Dissolution<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

11.1<\/p>\n<\/td>\n

\n

Events of Dissolution<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

11.2<\/p>\n<\/td>\n

\n

Dissolution by Agreement<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

11.3<\/p>\n<\/td>\n

\n

Dissolution Upon Event of Default<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

11.4<\/p>\n<\/td>\n

\n

[Intentionally omitted.]<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

11.5<\/p>\n<\/td>\n

\n

Dissolution upon Notice<\/p>\n<\/td>\n

\n

22<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

11.6<\/p>\n<\/td>\n

\n

Financing Defaults<\/p>\n<\/td>\n

\n

23<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

11.7<\/p>\n<\/td>\n

\n

Winding Up<\/p>\n<\/td>\n

\n

23<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

11.8<\/p>\n<\/td>\n

\n

Liquidation Proceeds<\/p>\n<\/td>\n

\n

24<\/p>\n<\/td>\n<\/tr>\n

\n

12.<\/p>\n<\/td>\n

\n

Indemnification and Insurance<\/p>\n<\/td>\n

\n

24<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

12.1<\/p>\n<\/td>\n

\n

Indemnification<\/p>\n<\/td>\n

\n

24<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

12.2<\/p>\n<\/td>\n

\n

Insurance<\/p>\n<\/td>\n

\n

25<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

12.3<\/p>\n<\/td>\n

\n

Indemnification by the Members<\/p>\n<\/td>\n

\n

25<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

12.4<\/p>\n<\/td>\n

\n

Assertion of Claims<\/p>\n<\/td>\n

\n

25<\/p>\n<\/td>\n<\/tr>\n

\n

13.<\/p>\n<\/td>\n

\n

Miscellaneous<\/p>\n<\/td>\n

\n

26<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

13.1<\/p>\n<\/td>\n

\n

Governing Law<\/p>\n<\/td>\n

\n

26<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

13.2<\/p>\n<\/td>\n

\n

Effectiveness<\/p>\n<\/td>\n

\n

26<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

ii<\/p>\n

\n

\n<\/p>\n

EXHIBITS<\/u><\/strong><\/p>\n<\/p>\n<\/p>\n

Exhibit A – Articles of Incorporation of the Company<\/p>\n<\/p>\n<\/p>\n<\/p>\n

SCHEDULES<\/u><\/strong><\/p>\n<\/p>\n<\/p>\n

Schedule 5.3 – Management and Operating Reports<\/p>\n<\/p>\n

Schedule 6.1 – Capital Contributions<\/p>\n<\/p>\n

Schedule 8.3 – Monthly Reports<\/p>\n<\/p>\n

iii<\/p>\n

\n

\n<\/p>\n

OPERATING AGREEMENT of FLASH FORWARD, LTD., a Japanese limited liability
\ncompany (godo kaisha<\/em>), dated as of __, 2010, between TOSHIBA
\nCORPORATION, a Japanese corporation (“Toshiba<\/u>“), and SANDISK FLASH B.V.,
\na Netherlands company (“SanDisk<\/u>“).<\/p>\n<\/p>\n

WHEREAS, Flash Forward, Ltd. (the “Company<\/u>“) is a Japanese limited
\nliability company (godo kaisha<\/em>);<\/p>\n<\/p>\n

WHEREAS, pursuant to that certain Member Interests Purchase Agreement, dated
\nas of the date hereof, by and between SanDisk and Toshiba, concurrently with the
\nexecution hereof, SanDisk has acquired from Toshiba equity interests in the
\nCompany representing 49.9% of all outstanding membership interests (any or all
\nof such membership interests (mochibun<\/em>) of the Company shall be
\nreferred to herein as “Interests<\/u>“);<\/p>\n<\/p>\n

WHEREAS, Toshiba holds the remaining 50.1% of outstanding Interests; and<\/p>\n<\/p>\n

WHEREAS, SanDisk and Toshiba (each a “Member<\/u>“) desire to enter into
\nthis Operating Agreement in order to provide, subject to the Companies Act and
\nthe Articles of Incorporation of the Company (as amended from time to time, the
\n“Articles<\/u>“) for (i) the business of the Company, (ii) the conduct of the
\nCompany153s affairs and (iii) the rights, powers, preferences, limitations and
\nresponsibilities of the Company153s Members, employees and Executive Officers.<\/p>\n<\/p>\n

Accordingly, Toshiba and SanDisk agree as follows:<\/p>\n<\/p>\n\n\n\n\n
\n

1. <\/strong><\/p>\n<\/td>\n

\n

Definitions, Rules of Construction and Documentary
\nConventions<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

1.1<\/p>\n<\/td>\n

\n

Certain Definitions<\/u>.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(a)<\/p>\n<\/td>\n

\n

Capitalized terms used but not defined in the main body of this Agreement
\nshall have the respective meanings assigned to them in that certain Flash
\nForward Master Agreement, dated as of the date hereof, among SanDisk, SanDisk
\nCorporation and Toshiba (the “Master Agreement<\/u>“) or in Appendix A<\/u>
\nto the Master Agreement.<\/p>\n<\/td>\n<\/tr>\n

\n

(b)<\/p>\n<\/td>\n

\n

As used herein, the term “Agreement<\/u>” means this Operating Agreement
\ntogether with any Exhibits, Schedules, Appendices and Attachments hereto.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

1.2<\/p>\n<\/td>\n

\n

Additional Definitions<\/u>. The following capitalized terms used in this
\nAgreement shall have the respective meanings assigned in the sections indicated
\nbelow:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

1<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

Term<\/p>\n<\/td>\n

\n

Defined in<\/p>\n<\/td>\n<\/tr>\n

\n

“Appendix A”<\/p>\n<\/td>\n

\n

Recitals<\/p>\n<\/td>\n<\/tr>\n

\n

“Articles”<\/p>\n<\/td>\n

\n

Recitals<\/p>\n<\/td>\n<\/tr>\n

\n

“Bankruptcy Event”<\/p>\n<\/td>\n

\n

Section 11.1(f)<\/p>\n<\/td>\n<\/tr>\n

\n

“Board of Executive Officers”<\/p>\n<\/td>\n

\n

Section 5.1(a)<\/p>\n<\/td>\n<\/tr>\n

\n

“Claim”<\/p>\n<\/td>\n

\n

Section 12.4(a)<\/p>\n<\/td>\n<\/tr>\n

\n

“Company”<\/p>\n<\/td>\n

\n

Recitals<\/p>\n<\/td>\n<\/tr>\n

\n

“Deadlock”<\/p>\n<\/td>\n

\n

Section 10.3(c)<\/p>\n<\/td>\n<\/tr>\n

\n

“Deadlock Dissolution Notice”<\/p>\n<\/td>\n

\n

Section 10.3(e)<\/p>\n<\/td>\n<\/tr>\n

\n

“Defaulting Member”<\/p>\n<\/td>\n

\n

Section 10.4<\/p>\n<\/td>\n<\/tr>\n

\n

“Designated Individuals”<\/p>\n<\/td>\n

\n

Section 10.3(b)<\/p>\n<\/td>\n<\/tr>\n

\n

“Executive Officer(s)”<\/p>\n<\/td>\n

\n

Section 3.5(a)<\/p>\n<\/td>\n<\/tr>\n

\n

“Executive Vice President”<\/p>\n<\/td>\n

\n

Section 5.2(a)<\/p>\n<\/td>\n<\/tr>\n

\n

“General Meeting of Members”<\/p>\n<\/td>\n

\n

Section 4.2(a)<\/p>\n<\/td>\n<\/tr>\n

\n

“Indemnified Party”<\/p>\n<\/td>\n

\n

Section 12.4(a)<\/p>\n<\/td>\n<\/tr>\n

\n

“Indemnifying Party”<\/p>\n<\/td>\n

\n

Section 12.4(a)<\/p>\n<\/td>\n<\/tr>\n

\n

“Initiating Member”<\/p>\n<\/td>\n

\n

Section 10.3(e)<\/p>\n<\/td>\n<\/tr>\n

\n

“Interests”<\/p>\n<\/td>\n

\n

Recitals<\/p>\n<\/td>\n<\/tr>\n

\n

“Losses”<\/p>\n<\/td>\n

\n

Section 12.1(a)<\/p>\n<\/td>\n<\/tr>\n

\n

“Master Agreement”<\/p>\n<\/td>\n

\n

Section 1.1(a)<\/p>\n<\/td>\n<\/tr>\n

\n

“Member”<\/p>\n<\/td>\n

\n

Recitals<\/p>\n<\/td>\n<\/tr>\n

\n

“Nondefaulting Member”<\/p>\n<\/td>\n

\n

Section 10.4<\/p>\n<\/td>\n<\/tr>\n

\n

“Notified Party”<\/p>\n<\/td>\n

\n

Section 11.5<\/p>\n<\/td>\n<\/tr>\n

\n

“Notifying Party”<\/p>\n<\/td>\n

\n

Section 11.5<\/p>\n<\/td>\n<\/tr>\n

\n

“Permissible Assignee”<\/p>\n<\/td>\n

\n

Section 9.1(c)<\/p>\n<\/td>\n<\/tr>\n

\n

“Permissible Assignment Agreement”<\/p>\n<\/td>\n

\n

Section 9.1(c)<\/p>\n<\/td>\n<\/tr>\n

\n

“President”<\/p>\n<\/td>\n

\n

Section 5.2(a)<\/p>\n<\/td>\n<\/tr>\n

\n

“Responding Member”<\/p>\n<\/td>\n

\n

Section 10.3(e)<\/p>\n<\/td>\n<\/tr>\n

\n

“SanDisk Representative”<\/p>\n<\/td>\n

\n

Section 5.3(a)<\/p>\n<\/td>\n<\/tr>\n

\n

“Toshiba Representative”<\/p>\n<\/td>\n

\n

Section 5.3(a)<\/p>\n<\/td>\n<\/tr>\n

\n

“Y5 Operating Committee”<\/p>\n<\/td>\n

\n

Section 5.3(a)<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

2<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

1.3<\/p>\n<\/td>\n

\n

Rules of Construction and Documentary Conventions<\/u>. The rules of
\nconstruction, documentary conventions and general terms and conditions set forth
\nin Appendix A<\/u> shall apply to, and are hereby incorporated in, this
\nAgreement.<\/p>\n<\/td>\n<\/tr>\n

\n

2. <\/strong><\/p>\n<\/td>\n

\n

General Provisions<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

2.1<\/p>\n<\/td>\n

\n

Ownership of Interests; Capital Increase<\/u>. The rights and obligations
\nof the Members shall be as set forth herein, subject to the Articles and
\nmandatory provisions of the Companies Act.<\/p>\n<\/td>\n<\/tr>\n

\n

2.2<\/p>\n<\/td>\n

\n

Name<\/u>. The name of the Company is “Flash Forward Godo Kaisha,” which
\nshall be translated as “Flash Forward, Ltd.” in English, and all Company
\nbusiness shall be conducted in that name or such other name as the Members shall
\nmutually agree.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

2.3<\/p>\n<\/td>\n

\n

Principal Office<\/u>. The principal office of the Company shall be located
\nin Yokkaichi, Mie, or such other place as the Members shall mutually agree.<\/p>\n<\/td>\n<\/tr>\n

\n

2.4<\/p>\n<\/td>\n

\n

Term; Extension<\/u>. The Company shall be terminated on December 31, 2025,
\nunless extended by mutual written agreement of all of the Members or earlier
\nterminated in accordance with Section 11 (Dissolution). Any such extension shall
\nbe effective only upon the written agreement of all of the Members and shall be
\non such terms and for such period as set forth in such agreement. The Members
\nagree to meet, no later than December 31, 2024, to discuss the possible
\nextension of the term of the Company.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

2.5<\/p>\n<\/td>\n

\n

Scope of Activity<\/u>. The scope of activity of the Company shall be as
\nset forth in Sections 3.1 (Purpose) and 6.7 (Capacity Sharing Arrangement) of
\nthe Master Agreement.<\/p>\n<\/td>\n<\/tr>\n

\n

2.6<\/p>\n<\/td>\n

\n

Powers<\/u>. The Company shall have all the powers now or hereafter
\nconferred by applicable law on limited liability companies formed under the
\nCompanies Act and may do any and all acts and things necessary, incidental or
\nconvenient to the purpose specified in Section 2.5 (Scope of Activity).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

2.7<\/p>\n<\/td>\n

\n

Articles of Incorporation<\/u>. On the date hereof and immediately
\nfollowing the execution of this Agreement, the Members shall hold a General
\nMeeting of the Members and, among other matters agreed between them, vote their
\nInterests to amend the Articles so that they will be in the form of Exhibit
\nA<\/u>. In the event of any conflict between this Agreement and the Articles, the
\nMembers confirm their intent that the terms of this Agreement shall prevail, and
\non the request of either Member, the Members shall amend the Articles to conform
\nwith this Agreement to the extent legally possible; provided that the inability
\nto implement such amendment shall not relieve any Member from liability for any
\nbreach of its obligations hereunder. The Articles shall provide that each of the
\nMembers shall have the authority of a gyomu shikko shain<\/em> (a “Managing
\nMember”) under the Companies Act.<\/p>\n<\/td>\n<\/tr>\n

\n

2.8<\/p>\n<\/td>\n

\n

Company Actions<\/u>. The Members hereby authorize the Company, and ratify
\n(including for purposes of Section 4.1 (Matters Requiring the Approval of the
\nMembers)) all action having been taken by or on behalf of the Company (including
\nby its Members and Executive Officers) prior to the date hereof, to execute and
\ndeliver the FF Operative Documents to which it is a party, including all
\ncertificates, agreements and other documents required in connection therewith.\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

3<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

3. <\/strong><\/p>\n<\/td>\n

\n

Business Operations<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

3.1<\/p>\n<\/td>\n

\n

Business Dealings with the Company<\/u>. Subject to Sections 4.1(a)
\n(Matters Requiring the Approval of the Members) and 5.1(d) (Matters Requiring
\nthe Approval of the Board of Executive Officers), the Company may enter into
\ncontracts or agreements, or otherwise enter into transactions or dealings, with
\nany Member or any of their respective Affiliates, and derive and retain profits
\ntherefrom. The validity of any such contract, agreement, transaction or dealing
\nor any payment or profit related thereto or derived therefrom shall not be
\naffected by any relationship between the Company and any Member or any of their
\nrespective Affiliates, subject to the Companies Act. The Members agree that
\nwhere practicable and contractually allowable (based on competitive price,
\navailability and other material terms), the Board of Executive Officers will
\nconsider whether to utilize any Member or any of their respective Affiliates as
\nthe preferred providers of products and services that may be required in the
\nmanufacturing operations of the Company, subject to the ability of such Member
\nor Affiliate to meet the Company153s manufacturing requirements on competitive
\nterms. Unless otherwise approved by the Members or otherwise expressly provided
\nin the FF Operative Documents, all business dealings of the Company with any
\nMember or any of their respective Affiliates shall be on the most beneficial
\nstandard commercial terms and conditions, including volume, price and credit
\nterms, currently offered or made available to unaffiliated customers by such
\nMember or Affiliate, as the case may be, with respect to the products and
\nservices to be offered and provided to the Company.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

3.2<\/p>\n<\/td>\n

\n

Other Activities<\/u>. The provisions of Section 6.13 (Other Activities) of
\nthe Master Agreement are hereby incorporated herein by reference.<\/p>\n<\/td>\n<\/tr>\n

\n

3.3<\/p>\n<\/td>\n

\n

Personnel<\/u>. The provisions of Section 6.10 (FF Management Structure and
\nHeadcount) of the Master Agreement are hereby incorporated herein by reference.\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

3.4<\/p>\n<\/td>\n

\n

Business Plans and Related Matters<\/u>.<\/p>\n<\/td>\n<\/tr>\n

\n

(a)<\/p>\n<\/td>\n

\n

Initial and Subsequent Business Plans<\/u>. The initial Business Plan of
\nthe Company, consistent with the Phase I Minimum RUP Commitment and Toshiba153s
\nproposed schedule therefor and setting forth the Company153s products, pricing,
\noperating budget, capital expenditures, expense budgets, financing plans and
\nother business activities of the Company through the **** will be agreed upon
\nand certified by the Board of Executive Officers as soon as practicable after
\nthe Closing.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(i)<\/p>\n<\/td>\n

\n

The initial Business Plan and each successive Business Plan will, at the time
\nsuch Business Plan is in effect, represent the Company153s then-current forecast
\nof the proposed operations of the Company.<\/p>\n<\/td>\n<\/tr>\n

\n

(ii)<\/p>\n<\/td>\n

\n

An updated Business Plan complying with Section 3.4(b) (Form and Scope) in
\nrespect of each successive Fiscal Year after the **** shall be prepared under
\nthe direction of the President of the Company and submitted to the Board of
\nExecutive Officers for review and approval not later than the **** preceding the
\ncommencement of such Fiscal Year.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(iii)<\/p>\n<\/td>\n

\n

When the proposed Business Plan in respect of a Fiscal Year is approved by
\nthe Board of Executive Officers, it shall constitute the Business Plan of the
\nCompany for such Fiscal Year and the Company and its Executive Officers and
\nemployees shall implement such Business Plan, which shall be the basis of the
\nCompany153s operations for such Fiscal Year. Upon approval, the approved Business
\nPlan shall constitute the approved operational, financing and capital
\nexpenditure budget, subject to Section 6.3 of the Master Agreement. The Board of
\nExecutive Officers shall have the authority pursuant to Section 5.1(d) (Matters
\nRequiring the Approval of the Board of Executive Officers) to amend the most
\nrecently approved Business Plan, including the operating budget contained
\ntherein, and any Member may request that the Board of Executive Officers review
\nthe Company153s operating results and prospects, as well as market conditions, and
\nconsider a proposal for amendment or review of the most recently approved
\nBusiness Plan at any regularly scheduled or special meeting of the Board of
\nExecutive Officers and upon such request, the Board of Executive Officers shall
\nin good faith make such review and\/or consider such proposal.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

4<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

(b)<\/p>\n<\/td>\n

\n

Form and Scope<\/u>. Each Business Plan shall contain a statement of
\nlong-range strategy and short-range tactics detailing quantitative and
\nqualitative goals for the Company and relating the attainment of those goals to
\nthe Company153s manufacturing objectives, and shall include such items as planned
\ncapital expenditures, planned product development, planned product output and
\nprojected product cost, sales forecasts, total headcount, total spending and
\nrevenue and profit projections, financing plans and tax planning. No Business
\nPlan shall be deemed to be an amendment of this Agreement. Any capital
\ncommitments made in any Business Plan for a period after the Fiscal Year to
\nwhich the Business Plan applies shall be considered non-binding for purposes of
\nany FF Operative Document.<\/p>\n<\/td>\n<\/tr>\n

\n

(c)<\/p>\n<\/td>\n

\n

Approval<\/u>. Other than the initial Business Plan (which shall be
\napproved in accordance with Section 3.4(a)), the Board of Executive Officers
\nshall vote upon any proposed Business Plan, with such modifications as it may
\ndeem necessary, before **** preceding the commencement of each Fiscal Year.
\nSubject to Sections 10.3(c), (e) and (f) (Dispute Resolution; Deadlock) herein
\nand Section 6.3 of the Master Agreement, pending approval by the Board of
\nExecutive Officers of any proposed Business Plan, the most recently approved
\nBusiness Plan shall continue in effect; provided<\/em>, however<\/em>, the
\nBoard of Executive Officers may, by unanimous vote, adopt an amended interim
\nbusiness plan for the Company153s operations until it is able to reach agreement
\non the proposed Business Plan for the forthcoming year.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

3.5<\/p>\n<\/td>\n

\n

Standard of Care<\/u>.<\/p>\n<\/td>\n<\/tr>\n

\n

(a)<\/p>\n<\/td>\n

\n

Each Member and each Executive Officer, shall be entitled to rely (unless
\nsuch Person has knowledge or information concerning the matter in question that
\nmakes reliance unwarranted) on information, opinions, reports or statements,
\nincluding financial statements and other financial data, if prepared or
\npresented by:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(i)<\/p>\n<\/td>\n

\n

one or more managers or employees of the Company who such Member or Executive
\nOfficer believes in good faith to be reliable and competent in the matters
\npresented; or<\/p>\n<\/td>\n<\/tr>\n

\n

(ii)<\/p>\n<\/td>\n

\n

legal counsel, public accountants or other Persons as to matters that such
\nMember or Executive Officer believes to be within such Person153s professional or
\nexpert competence.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(b)<\/p>\n<\/td>\n

\n

Each Member shall also be entitled to rely upon information, opinions,
\nreports or statements, including financial statements and other financial data,
\nprepared or presented by the Board of Executive Officers pursuant to the
\nresponsibilities delegated to the Board of Executive Officers pursuant to this
\nAgreement.<\/p>\n<\/td>\n<\/tr>\n

\n

3.6<\/p>\n<\/td>\n

\n

Use of Names<\/u>. Except as may be expressly provided in the FF Operative
\nDocuments, nothing in this Agreement shall be construed as conferring on the
\nCompany or any Member the right to use in advertising, publicity or other
\npromotional activities any name, trade name, trademark or other designation of
\nany other Member or any of its Affiliates, including any contraction,
\nabbreviation or simulation of any of the foregoing.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

5<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

4. <\/strong><\/p>\n<\/td>\n

\n

Actions by the Members<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

4.1<\/p>\n<\/td>\n

\n

Matters Requiring the Approval of the Members<\/u>.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n\n
\n

(a)<\/p>\n<\/td>\n

\n

Notwithstanding any provision of the Articles to the contrary, no action
\nshall be taken by or on behalf of the Company in connection with any of the
\nfollowing matters without the prior unanimous written approval of the Members,
\neach acting through the Executive Officers appointed by it:<\/p>\n<\/td>\n<\/tr>\n

\n

(i)<\/p>\n<\/td>\n

\n

any amendment, restatement or revocation of the Articles;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(ii)<\/p>\n<\/td>\n

\n

any amendment to or renewal of any FF Operative Document between the Company
\nand any Member or any of their respective Affiliates;<\/p>\n<\/td>\n<\/tr>\n

\n

(iii)<\/p>\n<\/td>\n

\n

any change in the scope of activity or strategic direction of the Company153s
\nbusiness;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(iv)<\/p>\n<\/td>\n

\n

any merger, consolidation or other business combination to which the Company
\nor any of its Subsidiaries is a party, or any other transaction to which the
\nCompany is a party resulting in a Change of Control of the Company;<\/p>\n<\/td>\n<\/tr>\n

\n

(v)<\/p>\n<\/td>\n

\n

any sale, lease, pledge, assignment or other disposition of assets of the
\nCompany in an amount (in terms of consideration to be received by the Company)
\nin excess of \u00a55,000,000 in one transaction or a series of related transactions,
\nother than as expressly provided for in the FF Operative Documents or as set
\nforth in the most recently approved Business Plan;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(vi)<\/p>\n<\/td>\n

\n

the approval of any transaction or agreement between the Company and any
\nMember or any of their respective Affiliates (other than transactions or
\nagreements expressly provided for or authorized by an FF Operative Document or
\nthe most recently approved Business Plan) or any amendment thereto (including
\nthe waiver of any material term thereof), other than any such transaction,
\nagreement or amendment that contains generally available, arm153s length
\ncommercial terms and is in an amount (in terms of payments to be made or the
\nvalue of services or products to be provided or delivered) less than \u00a55,000,000
\nfor any single transaction or agreement or for substantially identical
\ntransactions within a twenty-four (24) month period (or a waiver that does not
\nmaterially adversely affect the rights and benefits of the Company), other than
\nas set forth in the most recently approved Business Plan;<\/p>\n<\/td>\n<\/tr>\n

\n

(vii)<\/p>\n<\/td>\n

\n

incurring Indebtedness in an amount in excess of \u00a51,000,000 or an increase in
\naggregate Indebtedness in excess of \u00a51,000,000 in any calendar quarter, other
\nthan as authorized by Section 5.1(d) (Matters Requiring the Approval of the
\nBoard of Executive Officers);<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(viii)<\/p>\n<\/td>\n

\n

with respect to the Company or any of its Subsidiaries, (A) the voluntary
\ncommencement of any proceeding or the voluntary filing of any petition seeking
\nrelief under Japanese or foreign bankruptcy, insolvency, receivership or similar
\nlaw, (B) the consent to the institution of, or the failure to contest in a
\ntimely and appropriate manner, any involuntary proceeding or any involuntary
\nfiling of any petition of the type described in clause (A) above, (C) the
\napplication for or consent to the appointment of a receiver, trustee, custodian,
\nsequestrator, conservator or similar official for the Company, or for a
\nsubstantial part of its property or assets, (D) the filing of an answer
\nadmitting the material allegations of a petition filed against the Company in
\nany such proceeding described above, (E) the consent to any order for relief
\nissued with respect to any such proceeding described above, (F) the making of a
\ngeneral assignment for the benefit of creditors, (G) the admission in writing of
\nthe Company153s inability, or the failure of the Company generally, to pay its
\ndebts as they become due or (H) the taking of any action for the purpose of
\neffecting any of the foregoing;<\/p>\n<\/td>\n<\/tr>\n

\n

(ix)<\/p>\n<\/td>\n

\n

subject to Section 9.1(a) and Appendix A<\/u>, the granting of consent to
\nthe transfer of any Interests;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

6<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

(x)<\/p>\n<\/td>\n

\n

the winding up, dissolution or liquidation of the Company or any of its
\nSubsidiaries (other than the dissolution of the Company pursuant to and as
\ncontemplated by Section 11 (Dissolution));<\/p>\n<\/td>\n<\/tr>\n

\n

(xi)<\/p>\n<\/td>\n

\n

the acquisition of any business, entry into any joint venture or partnership,
\nor creation of any direct or indirect Subsidiary of the Company;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(xii)<\/p>\n<\/td>\n

\n

the commitment of the Company to any development project;<\/p>\n<\/td>\n<\/tr>\n

\n

(xiii)<\/p>\n<\/td>\n

\n

the sale, license, assignment or other Transfer of any of the Company153s
\nintellectual property owned or in its possession (including any technology or
\nknow-how, whether or not patented, any trademark, trade name or service mark,
\nany copyright or any software or other method or process;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(xiv)<\/p>\n<\/td>\n

\n

any increase or decrease in the capital amount of the Company;<\/p>\n<\/td>\n<\/tr>\n

\n

(xv)<\/p>\n<\/td>\n

\n

any other matter material to the operation, staffing, business or financial
\ncondition of the Company; and<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n\n
\n

(xvi)<\/p>\n<\/td>\n

\n

any matter required by the Companies Act to be decided, in the case of a
\nlimited liability company (godo kaisha<\/em>) by its Members (or its Managing
\nMembers, as the case may be).<\/p>\n<\/td>\n<\/tr>\n

\n

(b)<\/p>\n<\/td>\n

\n

Each Member may exercise its vote by proxy; provided, that such proxy shall
\nsubmit to the Company, prior to the relevant General Meeting of Members, a power
\nof attorney duly signed by the Member and\/or other document establishing its
\npower of representation; and provided, further, that the conferment of the power
\nof proxy for one General Meeting of Members shall not be deemed to be a
\nconferment of the power of proxy for any subsequent General Meeting of Members.\n<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(c)<\/p>\n<\/td>\n

\n

Notwithstanding the requirements of Section 4.1(a) (Matters Requiring the
\nApproval of the Members) relating to agreements between the Company and any
\nMember or any of their respective Affiliates, any question regarding a material
\ndefault or alleged material default (including any question regarding a breach
\nof representation or alleged breach of representation) under any FF Operative
\nDocument between the Company and any Member or any of their respective
\nAffiliates shall be subject to the dispute resolution process set forth in
\nSections 10.3(a) and (b) (Dispute Resolution; Deadlock).<\/p>\n<\/td>\n<\/tr>\n

\n

4.2<\/p>\n<\/td>\n

\n

General Meetings of Members<\/u>.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(a)<\/p>\n<\/td>\n

\n

The Members acknowledge and agree that while under the Companies Act a
\nlimited liability company (godo kaisha<\/em>) does not have a requirement to
\nconvene a General Meeting of Members, for convenience they will in this
\nAgreement (and elsewhere in the FF Operative Documents) refer to such meeting or
\nmeetings as are required under this Agreement as a “General Meeting of Members.”
\nAn annual General Meeting of Members shall be held within three (3) months from
\nthe date immediately following the last day of each Fiscal Year of the Company.
\nA special General Meeting of Members may be held at any time and may be called
\nby each Member, a resolution of the Board of Executive Officers or in any other
\nmanner permitted by the Articles. All General Meetings of Members shall be
\ncalled and held in accordance with the Articles. The General Meetings of Members
\nmay be held at the Company153s principal office or at any other location, or, if
\nall the Members agree, by telecommunications conferences by means of which all
\npersons participating in the meeting can hear and be heard by each other,
\nprovided that such communications equipment continues to be operational
\nthroughout the meeting. The Members may by unanimous written consent effect any
\nresolution that could otherwise be resolved at a General Meeting of the Members.\n<\/p>\n<\/td>\n<\/tr>\n

\n

(b)<\/p>\n<\/td>\n

\n

Except as otherwise provided in this Agreement, each Member shall be entitled
\nto one vote for each JPY 1 contributed by such Member in respect of its
\nInterests.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(c)<\/p>\n<\/td>\n

\n

The minutes of every General Meeting of Members shall be kept with the
\nCompany153s records referred to in Section 5.5 (Records).<\/p>\n<\/td>\n<\/tr>\n

\n

(d)<\/p>\n<\/td>\n

\n

The quorum necessary for any General Meeting of Members shall be those
\nPersons entitled to cast all of the votes held by the Members. A quorum shall be
\ndeemed not to be present at any meeting for which notice was not properly given
\nunder the Articles, unless the Member as to whom such notice was not properly
\ngiven attends such meeting without protesting the lack of notice or duly
\nexecutes and delivers a written waiver of notice or a written consent to the
\nholding of such meeting.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

7<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

4.3<\/p>\n<\/td>\n

\n

Restrictions on Members<\/u>. No Member may, without the prior written
\nconsent of the other Member:<\/p>\n<\/td>\n<\/tr>\n

\n

(a)<\/p>\n<\/td>\n

\n

confess any judgment against the Company;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(b)<\/p>\n<\/td>\n

\n

enter into any agreement on behalf of or otherwise purport to bind the other
\nMember or the Company;<\/p>\n<\/td>\n<\/tr>\n

\n

(c)<\/p>\n<\/td>\n

\n

do any act in contravention of this Agreement;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(d)<\/p>\n<\/td>\n

\n

except as contemplated by Section 11 (Dissolution), dispose of the goodwill
\nor the business of the Company; or<\/p>\n<\/td>\n<\/tr>\n

\n

(e)<\/p>\n<\/td>\n

\n

assign the property of the Company in trust for creditors or on the
\nassignee153s promise to pay any Indebtedness of the Company.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

5. <\/strong><\/p>\n<\/td>\n

\n

Management and Operations of Company<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

5.1<\/p>\n<\/td>\n

\n

Meetings of the Board of Executive Officers<\/u>.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(a)<\/p>\n<\/td>\n

\n

General<\/u>. The Members agree to form a steering committee consisting of
\nexecutive officers nominated by each of the Members (each person so nominated,
\nan “Executive Officer<\/u>“). The Members acknowledge and agree that while
\nunder the Companies Act a limited liability company (godo kaisha<\/em>) does
\nnot have a Board of Executive Officers, for convenience they will in this
\nAgreement (and elsewhere in the FF Operative Documents) refer to such committee
\nas the “Board of Executive Officers” (“yakuin kai<\/em>“). Except as
\notherwise provided herein, as between the Parties the Board of Executive
\nOfficers is vested with complete and exclusive power to direct and control the
\nCompany and to manage the Company as provided by the Articles and this
\nAgreement, as it may be amended from time to time. The Board of Executive
\nOfficers shall have the power to delegate such responsibilities as it may deem
\nappropriate from time to time (including certain day-to-day responsibilities set
\nforth in Section 5.2 (Officers; Employees) and Section 5.3 (Y5 Operating
\nCommittee)). The Members shall cooperate in taking any necessary corporate steps
\nunder the Companies Act to attain the purposes of this Section 5, including
\nwithout limitation, approval by the Executive Officers and General Meeting of
\nMembers with respect to decisions made by the Board of Executive Officers.<\/p>\n<\/td>\n<\/tr>\n

\n

(b)<\/p>\n<\/td>\n

\n

Members of the Board of Executive Officers; Voting; etc.<\/u><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(i)<\/p>\n<\/td>\n

\n

The Board of Executive Officers of the Company shall consist of six (6)
\nExecutive Officers, three (3) of which shall be nominated by Toshiba, and the
\nother three (3) of which shall be nominated by SanDisk; provided that the total
\nnumber of Executive Officers of the Company may be changed by mutual agreement
\nof the Members.<\/p>\n<\/td>\n<\/tr>\n

\n

(ii)<\/p>\n<\/td>\n

\n

Executive Officers shall be elected to serve until complete adjournment of
\nthe annual General Meeting of Members for the Fiscal Year last to end within one
\n(1) year after his or her assumption of the office of Executive Officer, and
\nshall be eligible for re-election.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(iii)<\/p>\n<\/td>\n

\n

Subject to the fiduciary duty of the shokumu shikko sha<\/em> under the
\nCompanies Act, as applicable, each Executive Officer shall serve at the pleasure
\nof the designating Member and may be removed as such, with or without cause, and
\nhis or her successor designated, by the designating Member. Each Member shall
\nhave the right to designate a replacement Executive Officer in the event of any
\nvacancy among such Member153s appointees.<\/p>\n<\/td>\n<\/tr>\n

\n

(iv)<\/p>\n<\/td>\n

\n

Each Member shall bear any cost incurred by any Executive Officer nominated
\nby it to serve on the Board of Executive Officers, and no Executive Officer
\nshall be entitled to compensation from the Company for serving in such capacity.\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

8<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

(v)<\/p>\n<\/td>\n

\n

Each Member shall notify the other Member and the Company of the name,
\nbusiness address and business telephone, e-mail address and facsimile numbers of
\neach Executive Officer that such Member has nominated. Each Member shall
\npromptly notify the other Member and the Company of any change in such Member153s
\nnominated or of any change in any such address or number.<\/p>\n<\/td>\n<\/tr>\n

\n

(vi)<\/p>\n<\/td>\n

\n

For purposes of any approval or action taken by the Board of Executive
\nOfficers, each Executive Officer shall have one vote. Unless otherwise required
\nunder Japanese law, unanimous agreement of all Executive Officers is required
\nfor valid action to be taken by the Board of Executive Officers.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(vii)<\/p>\n<\/td>\n

\n

At any meeting of the Board of Executive Officers, each Executive Officer may
\nexercise his or her vote by proxy; provided, that such proxy shall submit to the
\nCompany, prior to the relevant meeting, a power of attorney duly signed by the
\nExecutive Officer and\/or other document establishing his or her power of
\nrepresentation; and provided, further, that the conferment of the power of proxy
\nfor one meeting of the Board of Executive Officers shall not be deemed to be a
\nconferment of the power of proxy for any subsequent meeting of the Board of
\nExecutive Officers.<\/p>\n<\/td>\n<\/tr>\n

\n

(viii)<\/p>\n<\/td>\n

\n

The quorum necessary for any meeting of the Board of Executive Officers shall
\nbe those Executive Officers entitled to cast all of the votes held by the
\nmembers of the Board of Executive Officers. A quorum shall be deemed not to be
\npresent at any meeting for which notice was not properly given under Section
\n5.1(c) (Meetings, Notices, etc.), unless the Executive Officer or Executive
\nOfficers as to whom such notice was not properly given attend such meeting
\nwithout protesting the lack of notice or duly execute and deliver a written
\nwaiver of notice or a written consent to the holding of such meeting.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n\n
\n

(ix)<\/p>\n<\/td>\n

\n

In the event that, under the Companies Act, an action approved by the Board
\nof Executive Officers requires the approval of each Member in order to be a duly
\nauthorized action of the Company, each Member agrees promptly to provide such
\nfurther evidence of approval as may be required by any third parties with whom
\nthe Company transacts or wishes to transact business.<\/p>\n<\/td>\n<\/tr>\n

\n

(c)<\/p>\n<\/td>\n

\n

Meetings, Notice, etc.<\/u> Meetings of the Board of Executive Officers
\nshall be held at such location or locations as may be selected by the Board of
\nExecutive Officers from time to time.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(i)<\/p>\n<\/td>\n

\n

Regular meetings of the Board of Executive Officers shall be held on such
\ndates and at such times as shall be determined by the Board of Executive
\nOfficers and shall be held at least on a quarterly basis, unless otherwise
\nagreed by the Executive Officers.<\/p>\n<\/td>\n<\/tr>\n

\n

(ii)<\/p>\n<\/td>\n

\n

Notice of any regular meeting or special meeting pursuant to Section
\n5.1(c)(iii) shall be given to each Executive Officer at least ten (10) Business
\nDays prior to such meeting in the case of a meeting in person or at least five
\n(5) Business Days prior to such meeting in the case of a meeting by conference
\ntelephone or similar communications equipment pursuant to Section 5.1(c)(vii),
\nwhich notice shall state the purpose or purposes for which such meeting is being
\ncalled and include any supporting documentation relating to any action to be
\ntaken at such meeting.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(iii)<\/p>\n<\/td>\n

\n

Special meetings of the Board of Executive Officers may be called by any
\nExecutive Officer by notice given in accordance with the notice requirements set
\nforth in Section 5.1(c)(ii); provided that the Executive Officers appointed by
\nthe Member that is not represented by the Executive Officer calling such special
\nmeeting shall be entitled to select a convenient location for the meeting and to
\nsuggest an alternative time or times if the designated time is not convenient
\nfor them. No action may be taken and no business may be transacted at such
\nspecial meeting which is not identified in such notice unless (A) such action or
\nbusiness is incidental to the action or business for which the special meeting
\nis called or (B) such action or business does not materially adversely affect
\nany Member or the Company.<\/p>\n<\/td>\n<\/tr>\n

\n

(iv)<\/p>\n<\/td>\n

\n

Each Member may invite a reasonable number of observers to all meetings of
\nthe Board of Executive Officers.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

9<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

(v)<\/p>\n<\/td>\n

\n

The minutes of each meeting of the Board of Executive Officers shall be
\ndelivered to all Executive Officers within twenty (20) calendar days after such
\nmeeting. Material to be presented at a Board of Executive Officers meeting shall
\nbe delivered to all Executive Officers ten (10) Business Days prior to such
\nmeeting if feasible in light of the circumstances giving rise to the need for
\nsuch meeting, or in any event a minimum of five (5) Business Days prior to such
\nmeeting.<\/p>\n<\/td>\n<\/tr>\n

\n

(vi)<\/p>\n<\/td>\n

\n

The actions taken by the Board of Executive Officers at any meeting, however
\ncalled and noticed, shall be as valid as though taken at a meeting duly held
\nafter regular call and notice if (but not until), either before, at or after the
\nmeeting, each Executive Officer as to whom such meeting was improperly held duly
\nexecutes and delivers a written waiver of notice or a written consent to the
\nholding of such meeting; provided, however, any Executive Officer who is present
\nat a meeting and does not protest the failure of notice shall be deemed to have
\nreceived adequate notice thereof. A vote of the Board of Executive Officers may
\nbe taken only (A) at a meeting of the members thereof duly called and held or
\n(B) without a meeting by the execution by the Executive Officers eligible to
\ncast all the votes on the Board of Executive Officers of a consent setting forth
\nthe action so taken, and identified as a unanimous written consent of the
\nExecutive Officers.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(vii)<\/p>\n<\/td>\n

\n

Upon the consent of both the President and the Executive Vice President,
\nmeetings of the Board of Executive Officers may be held by conference telephone
\nor similar communications equipment by means of which all Executive Officers
\nparticipating in the meeting can be heard by all other participants; provided
\nthat such communications equipment continues to be operational throughout the
\nmeeting. Any Executive Officer may elect to participate in a meeting by
\nconference telephone or similar communications equipment upon sufficient advance
\nnotice to permit arrangements therefor to be made.<\/p>\n<\/td>\n<\/tr>\n

\n

(viii)<\/p>\n<\/td>\n

\n

At each meeting, the Board of Executive Officers shall consider (A) any of
\nthe items set forth in Section 5.1(d) (Matters Requiring the Approval of the
\nBoard of Executive Officers) that may require the Board of Executive Officers153
\nattention, (B) any items added to the Board of Executive Officers153 agenda for
\ndiscussion by any Member and (C) such other matters as the Board of Executive
\nOfficers decides to review; provided<\/em>, however<\/em>, that the
\nExecutive Officers shall not be required to vote or take other action (other
\nthan carrying on discussions) on matters that were not placed on the meeting
\nagenda at least five (5) Business Days in advance of the time set for the
\nmeeting unless such action or business is incidental to the action or business
\nwhich was otherwise properly on the agenda and considered at such meeting.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(ix)<\/p>\n<\/td>\n

\n

The Board of Executive Officers shall, from time to time, elect one of its
\nmembers to preside at its meetings. The Board of Executive Officers may
\nestablish reasonable rules and regulations to (A) require Executive Officers to
\ncall meetings and perform other administrative duties, (B) limit the number and
\nparticipation of observers, if any, and require them to observe confidentiality
\nobligations and (C) otherwise provide for the keeping and distribution of
\nminutes and other internal Board of Executive Officers governance matters not
\ninconsistent with the terms of this Agreement.<\/p>\n<\/td>\n<\/tr>\n

\n

(x)<\/p>\n<\/td>\n

\n

The Board of Executive Officers shall have the authority to establish
\nsubcommittees and to delegate to any such subcommittee any of the Board of
\nExecutive Officers153 responsibilities; provided, however, the power of the Board
\nof Executive Officers to approve the matters set forth in Section 5.1(d)
\n(Matters Requiring the Approval of the Board of Executive Officers) may not be
\ndelegated to a subcommittee.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

10<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n\n
\n

(d)<\/p>\n<\/td>\n

\n

Matters Requiring the Approval of the Board of Executive Officers<\/u>.
\nNotwithstanding any provision of the Articles to the contrary, no action may be
\ntaken by or on behalf of the Company in connection with any of the following
\nmatters without the unanimous written approval of the Board of Executive
\nOfficers:<\/p>\n<\/td>\n<\/tr>\n

\n

(i)<\/p>\n<\/td>\n

\n

any sale, lease, pledge, assignment or other disposition of assets of the
\nCompany in an amount (in terms of consideration to be received by the Company)
\nin excess of \u00a51,000,000 in one transaction or a series of related transactions,
\nother than as set forth in the most recently approved Business Plan;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(ii)<\/p>\n<\/td>\n

\n

the approval of any transaction or agreement between the Company and any
\nMember or any of their respective Affiliates (other than transactions or
\nagreements expressly provided for or authorized by an FF Operative Document or
\nthe most recently approved Business Plan) or any amendment thereto (including
\nthe waiver of any material term thereof), other than any such transaction,
\nagreement or amendment that contains generally available, arm153s length
\ncommercial terms and is in an amount (in terms of payments to be made or the
\nvalue of services or products to be provided or delivered) less than \u00a51,000,000
\nfor any single transaction or agreement or for substantially identical
\ntransactions within a twenty-four (24) month period (or a waiver that does not
\nmaterially adversely affect the rights and benefits of the Company), other than
\nas set forth in the most recently approved Business Plan;<\/p>\n<\/td>\n<\/tr>\n

\n

(iii)<\/p>\n<\/td>\n

\n

the purchase, lease, license or other acquisition of (A) personal property or
\nservices or (B) any list of capital equipment approved by the Members, in each
\ncase in an amount (in terms of payments to be made or the value of services of
\nproducts to be provided or delivered) exceeding \u00a51,000,000 in any one
\ntransaction or a series of related transactions, other than as provided for in
\nthe most recently approved Business Plan;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(iv)<\/p>\n<\/td>\n

\n

the selection of attorneys, accountants, auditors and financial advisors;<\/p>\n<\/td>\n<\/tr>\n

\n

(v)<\/p>\n<\/td>\n

\n

the adoption of accounting and tax policies, procedures and principles;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(vi)<\/p>\n<\/td>\n

\n

incurring any Indebtedness;<\/p>\n<\/td>\n<\/tr>\n

\n

(vii)<\/p>\n<\/td>\n

\n

the hiring or termination of any employees referenced in Section 5.2(a)
\n(Officers; Employees) who are not members of the SanDisk Team, if any;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(viii)<\/p>\n<\/td>\n

\n

the adoption of or changes to the forms of confidentiality, assignment or
\ndisclosure of intellectual property or employment agreements to be entered into
\nbetween the Company and its employees;<\/p>\n<\/td>\n<\/tr>\n

\n

(ix)<\/p>\n<\/td>\n

\n

the adoption of or changes to any employee benefit plan, including any
\nincentive compensation plan;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(x)<\/p>\n<\/td>\n

\n

the amount and timing of any distributions;<\/p>\n<\/td>\n<\/tr>\n

\n

(xi)<\/p>\n<\/td>\n

\n

the commencement or settlement of litigation by or against the Company;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(xii)<\/p>\n<\/td>\n

\n

the purchase, sale or lease (as lessor or lessee) of any real property;<\/p>\n<\/td>\n<\/tr>\n

\n

(xiii)<\/p>\n<\/td>\n

\n

any acquisition of securities or any other ownership interest in any entity;\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(xiv)<\/p>\n<\/td>\n

\n

the making of any public announcements by or on behalf of the Company;
\nprovided, that in any case any such public announcements must otherwise comply
\nwith the requirements of Section 5.2 (Public Announcements) of the Master
\nAgreement, if applicable;<\/p>\n<\/td>\n<\/tr>\n

\n

(xv)<\/p>\n<\/td>\n

\n

the entry into or amendment of any collective bargaining arrangements or the
\nwaiver of any material provision or requirement thereof;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

11<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

(xvi)<\/p>\n<\/td>\n

\n

the approval of a proposed Business Plan, or the amendment to the most
\nrecently approved Business Plan, in each case including the operating budget
\ncontained therein;<\/p>\n<\/td>\n<\/tr>\n

\n

(xvii)<\/p>\n<\/td>\n

\n

the incurrence of capital expenditures in excess of those provided for in the
\nmost recently approved Business Plan or the commitment of the Company to any
\ndevelopment projects other than as provided for in the most recently approved
\nBusiness Plan;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(xviii)<\/p>\n<\/td>\n

\n

subject to Section 5.1(c)(x), the establishment of any subcommittees or
\ndelegation of authority of the Board of Executive Officers;<\/p>\n<\/td>\n<\/tr>\n

\n

(xix)<\/p>\n<\/td>\n

\n

the authorization and approval of any filing with, public comments to, or
\nnegotiation\/discussion with, any Governmental Authority (excluding regular
\noperating filings and other routine administrative matters);<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(xx)<\/p>\n<\/td>\n

\n

the approval of Unique Activities to be performed by the Company at the
\nrequest of any Member, in connection with which the Board of Executive Officers
\nshall be satisfied that such Member has reached agreement with the Company as to
\nthe payment by such Member of all costs incurred in connection with such Unique
\nActivities and that adequate provision has been made by such Member for the
\nfunding of any additional required capital expenditures required in conjunction
\nwith such Unique Activities;<\/p>\n<\/td>\n<\/tr>\n

\n

(xxi)<\/p>\n<\/td>\n

\n

the decision of the Company to negotiate external sources of additional wafer
\nfabrication capacity for NAND Flash Memory Products;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(xxii)<\/p>\n<\/td>\n

\n

any dispute referred to the Board of Executive Officers by the Y5 Operating
\nCommittee pursuant to Section 5.3(b); and<\/p>\n<\/td>\n<\/tr>\n

\n

(xxiii)<\/p>\n<\/td>\n

\n

such other matters as the Board of Executive Officers decides, in its sole
\ndiscretion, to review.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

5.2<\/p>\n<\/td>\n

\n

Officers; Employees<\/u>.<\/p>\n<\/td>\n<\/tr>\n

\n

(a)<\/p>\n<\/td>\n

\n

Unless otherwise mutually agreed by the Members, the Executive Officers of
\nthe Company with specific titles shall be designated as: the President\/Chief
\nExecutive Officer (“President<\/u>“) and the Executive Vice President
\n(“Executive Vice President<\/u>“). The President and Executive Vice President
\nshall be elected by the Board of Executive Officers and serve three successive
\none-year terms, with the first such set of terms ending at complete adjournment
\nof the annual meeting of Members for the Fiscal Year last to end within one (1)
\nyear after his or her assumption of the officership. Toshiba shall have the
\nright to nominate the first President and SanDisk shall have the right to
\nnominate the first Executive Vice President, and then the Members will then
\nalternate such nominating rights for each three year term for such positions.
\nThe President or Executive Vice President, as applicable, nominated by a Member,
\nshall be designated by such Member as a shokumu shikko sha<\/em> of the
\nCompany on behalf of such Member for purposes of the Companies Act. Each nominee
\nfor the President and for the Executive Vice President shall be subject to the
\nconsent of the non-nominating Member, which consent shall not unreasonably be
\nwithheld. In addition to the President and Executive Vice President, the Board
\nof Executive Officers may appoint such other officers from time to time as it
\ndeems necessary or advisable in the conduct of the business and affairs of the
\nCompany. Any individual may hold more than one office.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(b)<\/p>\n<\/td>\n

\n

The President shall have the authority to retain other senior management of
\nthe Company, subject to the prior approval of the Board of Executive Officers.\n<\/p>\n<\/td>\n<\/tr>\n

\n

(c)<\/p>\n<\/td>\n

\n

The Company shall have agreements with and policies applicable to each of its
\nofficers, employees and consultants who are not members of the SanDisk Team, in
\nforms acceptable to each Member, and shall also have appropriate arrangements
\nwith its members of the SanDisk Team, in each case with respect to (i)
\nprotection of confidential information, (ii) patent and copyright assignment,
\n(iii) invention disclosure (including improvements and advances) and assignments
\nthereof and (iv) in respect of certain employees who are not members of the
\nSanDisk Team, non-competition.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

12<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

5.3<\/p>\n<\/td>\n

\n

Y5 Representatives; Y5 Operating Committee<\/u>.<\/p>\n<\/td>\n<\/tr>\n

\n

(a)<\/p>\n<\/td>\n

\n

The Company shall have an Operating Committee for Y5 Facility operations (the
\n“Y5 Operating Committee<\/u>“) consisting of a senior executive designated by
\neach of SanDisk and Toshiba (each such individual the “SanDisk
\nRepresentative<\/u>” and the “Toshiba Representative<\/u>,” respectively) each
\nof whom shall represent the designating Party on a day-to-day basis at the Y5
\nFacility. Each Member shall notify the other Member in advance of any
\nreplacement of its representative. If a Member requests in good faith that the
\nother Member153s representative be replaced with another person from the other
\nMember153s organization, the other Member shall consider and discuss in good faith
\nwith the requesting Member such request, provided that such replacement, if any,
\nshall be determined solely by such other Member. ****<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(b)<\/p>\n<\/td>\n

\n

The Y5 Operating Committee shall work together and endeavor to make the Y5
\nFacility the most advanced and competitive memory fabrication facility in the
\nworld. The Y5 Operating Committee shall have the authority to determine all
\nmatters concerning the day-to-day operations of the Company and the Y5 Facility
\n(including staffing matters as provided in Section 6.10(a)(iii) of the Master
\nAgreement), subject to those matters reserved herein to the Board of Executive
\nOfficers or the Members as well as to the requirements of this Agreement, the
\nArticles and the Companies Act. The Y5 Operating Committee shall communicate on
\na day-to-day basis with respect to the status of Y5 Facility operations and any
\nother issues that may arise, and shall meet in person no less than two (2) times
\nper week, or such other times and frequency as may be agreed upon by all members
\nof such committee. If the members of the Y5 Operating Committee are unable to
\nagree on any issue after thirty (30) days, they shall submit such matter
\ntogether with their respective recommendations to the Board of Executive
\nOfficers, which shall endeavor to immediately resolve the issue. If the Board of
\nExecutive Officers is unable to agree on any such issue after ten (10) days,
\nsuch issue shall be submitted to the Management Representatives for final
\nresolution.<\/p>\n<\/td>\n<\/tr>\n

\n

(c)<\/p>\n<\/td>\n

\n

The Y5 Operating Committee shall hold a monthly review meeting in English at
\nthe Yokkaichi Facility on **** of each calendar month, unless otherwise agreed
\nby the Members or the Y5 Operating Committee. The Y5 Operating Committee shall
\nprepare and distribute to each Member (at least three (3) Business Days in
\nadvance of the monthly review meetings) monthly reports in English with respect
\nto the engineering activities, operations and financial affairs of the Company
\nand the Y5 Facility.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(d)<\/p>\n<\/td>\n

\n

Upon the request of either Member, the Y5 Operating Committee shall provide
\nthe Members with (i) any management or operation reports of the Company related
\nto the Y5 Facility (which neither Member shall have an obligation to translate)
\nand (ii) simultaneously in Japanese and English, those management and operating
\nreports identified on Schedule 5.3 as mutually agreed upon from time to time by
\nthe Parties. Upon reasonable request from SanDisk, Toshiba employees shall
\nexplain such reports to SanDisk153s employees and respond to questions from
\nSanDisk153s employees; provided, however that SanDisk acknowledges and agrees that
\nToshiba shall not be responsible for SanDisk153s failure to understand any such
\nreports.<\/p>\n<\/td>\n<\/tr>\n

\n

5.4<\/p>\n<\/td>\n

\n

Insurance<\/u>. The Company shall maintain insurance against such
\nliabilities and other risks associated with the conduct by the Company of its
\nbusiness and in such amounts and against such risks as agreed by the Members,
\nand in any event as is generally maintained by companies engaged in a business
\nsimilar to that of the Company.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

13<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

5.5<\/p>\n<\/td>\n

\n

Records<\/u>. The Company shall maintain the following records at its
\nprincipal office:<\/p>\n<\/td>\n<\/tr>\n

\n

(a)<\/p>\n<\/td>\n

\n

a current list of the full name set forth in alphabetical order and last
\nknown business address of each Member and Executive Officer;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(b)<\/p>\n<\/td>\n

\n

a copy of the Articles, and all articles of amendment thereto;<\/p>\n<\/td>\n<\/tr>\n

\n

(c)<\/p>\n<\/td>\n

\n

a copy of this Agreement and all amendments hereto;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(d)<\/p>\n<\/td>\n

\n

a copy of all financial statements of the Company for the three most recent
\nFiscal Years;<\/p>\n<\/td>\n<\/tr>\n

\n

(e)<\/p>\n<\/td>\n

\n

a copy of the Company153s income tax or information returns and reports, if
\nany, for the three most recent years;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(f)<\/p>\n<\/td>\n

\n

a copy of all indentures, loan agreements, lease agreements, guarantees,
\nsecurity agreements, promissory notes, licensing or other intellectual property
\nagreements, agreements that relate to the payment or receipt by the Company of
\namounts in excess of \u00a55,000,000 or that are not terminable by the Company upon
\nninety (90) days notice, documents, if any, evidencing employee compensation
\narrangements, employee pension or other benefit arrangements, and similar
\ndocuments and instruments executed and delivered by the Company;<\/p>\n<\/td>\n<\/tr>\n

\n

(g)<\/p>\n<\/td>\n

\n

a list of all contributions made to the Company by the Members; and<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(h)<\/p>\n<\/td>\n

\n

a record of all distributions by the Company to each Member.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Members and\/or the Executive Officers and\/or their respective designees
\n(which shall be limited to its employees or professional advisers subject to
\nappropriate confidentiality obligations) shall have reasonable access to the
\nrecords of the Company during normal business hours upon reasonable request.
\nCopies of records shall be made available and delivered to the Members and\/or
\nthe Executive Officers promptly after reasonable request for same, provided the
\nrequesting party pays for copy and delivery charges.<\/p>\n<\/p>\n\n\n\n\n
\n

6. <\/strong><\/p>\n<\/td>\n

\n

Capital Contributions; Distributions<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

6.1<\/p>\n<\/td>\n

\n

Capital Contributions<\/u>.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(a)<\/p>\n<\/td>\n

\n

The Members shall be deemed to have made Capital Contributions to the Company
\nin the amounts set forth opposite their respective names on Schedule 6.1.<\/p>\n<\/td>\n<\/tr>\n

\n

(b)<\/p>\n<\/td>\n

\n

No Member shall be obligated to make any additional Capital Contributions to
\nthe Company, unless otherwise mutually agreed upon by the Members in writing, in
\nwhich case such additional Capital Contributions shall be made in proportion to
\nthe Members153 respective Percentages as of the date of such additional Capital
\nContribution.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

14<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

6.2<\/p>\n<\/td>\n

\n

Distributions<\/u>.<\/p>\n<\/td>\n<\/tr>\n

\n

(a)<\/p>\n<\/td>\n

\n

General<\/u>. Notwithstanding any provision of the Articles to the
\ncontrary, and subject to Section 11.8 (Liquidation Proceeds), unless otherwise
\nagreed by the Members, no distributions of cash (or in the case of Section 11.8,
\nother property) shall be made by the Company to the Members for a period of
\nthree (3) years from the date of this Agreement, and thereafter all
\ndistributions of cash (or, in the case of Section 11.8, other property) by the
\nCompany to the Members shall be made in Japanese Yen at the times and in the
\namounts determined by the Board of Executive Officers. Except as provided in
\nSection 11.8, each distribution to the Members shall be made on a pro rata basis
\nbased upon the respective Percentages of the Members as of the date of such
\ndistribution.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(b)<\/p>\n<\/td>\n

\n

Distribution for Taxes<\/u>. Notwithstanding Section 6.2(a), subject to the
\nCompanies Act and other applicable law, the Company shall make, in respect of
\neach Fiscal Year in which SanDisk or its Affiliates must recognize taxable
\nincome of the Company in SanDisk153s tax returns, including, but not limited to,
\nits US federal, state and local income (including withholding tax) and franchise
\ntax returns, a distribution to SanDisk to the extent necessary to meet SanDisk153s
\naggregate US tax liability with respect to such taxable income, with such
\nliability calculated at the highest US, state and local corporate tax rates as
\nmay be then applicable to SanDisk. SanDisk will make a request upon the Company
\nfor such distribution as soon as is practicable after the filing of SanDisk
\nCorporation153s applicable US tax returns. Following receipt of such request, the
\nCompany shall make the requested distribution on the next date on which the
\nCompany is permitted to make distributions pursuant to the Companies Act.
\nSimultaneously therewith, the Company shall also make a distribution to Toshiba
\nin an amount equal to the amount of the per Interest distribution made to
\nSanDisk pursuant to this Section 6.2(b). Any such prior distributions shall be
\ntaken into account upon any purchase and sale of Interests under Section 10
\n(Certain Agreements of the Members) or dissolution of the Company under Section
\n11 (Dissolution) hereof. If necessary, the Board of Executive Officers shall
\nconsider capital reductions to the extent that any such capital reduction will
\nnot adversely affect the Y5 Facility153s operations.<\/p>\n<\/td>\n<\/tr>\n

\n

6.3<\/p>\n<\/td>\n

\n

No Interest<\/u>. No interest shall be payable to the Members on their
\nCapital Contributions or otherwise in respect of the capital of the Company.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

6.4<\/p>\n<\/td>\n

\n

Return of Capital Contributions<\/u>. Except as expressly provided herein,
\nno Member shall be entitled to the return of any part of such Member153s Capital
\nContributions.<\/p>\n<\/td>\n<\/tr>\n

\n

7. <\/strong><\/p>\n<\/td>\n

\n

Additional Contributions<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

No Member shall be obligated under this Agreement or the Articles to
\ncontribute any additional amounts to the Company or otherwise to be liable for
\nthe debts and obligations of the Company.<\/p>\n<\/p>\n\n\n\n\n
\n

8. <\/strong><\/p>\n<\/td>\n

\n

Accounting and Taxation<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

8.1<\/p>\n<\/td>\n

\n

Financial Accounting Conventions<\/u>.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(a)<\/p>\n<\/td>\n

\n

The Company shall adopt and follow Japanese GAAP.<\/p>\n<\/td>\n<\/tr>\n

\n

(b)<\/p>\n<\/td>\n

\n

Notwithstanding anything to the contrary in Appendix A<\/u>, the first
\nFiscal Year shall begin on the date of formation of the Company and end on March
\n31, 2011.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(c)<\/p>\n<\/td>\n

\n

The Company shall in principle (but subject to applicable Law) utilize a
\nfive-year straight line depreciation method for manufacturing equipment.<\/p>\n<\/td>\n<\/tr>\n

\n

8.2<\/p>\n<\/td>\n

\n

Maintenance of Books of Account<\/u>. The Company shall keep or cause to be
\nkept at its principal office, or such other location as the Board of Executive
\nOfficers shall designate, full and complete books of account. The books of
\naccount shall be maintained in a manner that provides sufficient assurance that
\ntransactions of the Company are recorded so as to comply with all applicable
\nlaws and to permit (a) the preparation of the Company153s consolidated financial
\nstatements in accordance with Japanese GAAP and (b) the Members to account for
\ntheir interest in the Company in accordance with Japanese GAAP.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

15<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

8.3<\/p>\n<\/td>\n

\n

Financial Statements<\/u>.<\/p>\n<\/td>\n<\/tr>\n

\n

(a)<\/p>\n<\/td>\n

\n

Annual Statements<\/u>. As soon as practicable following the end of each
\nFiscal Year (and in any event not later than fifty-two (52) days after the end
\nof such Fiscal Year), the Company shall prepare and deliver to each Member and
\neach Executive Officer, audited consolidated and consolidating balance sheets of
\nthe Company as of the end of such Fiscal Year and the related audited
\nconsolidated and consolidating statements of operations, the Members153 capital
\naccounts and cash flows of the Company for such Fiscal Year (or similar
\nstatements if such statements change as the result of changes in Japanese GAAP),
\ntogether with appropriate notes to such consolidated financial statements, and
\nin each case setting forth in comparative form the corresponding figures for the
\npreceding Fiscal Year and for the budget for the Fiscal Year just completed.
\nSuch financial statements shall be accompanied by (i) the report of the
\nAccountants to the effect that such financial statements (except for the
\ncomparison to the budget) have been prepared in conformity with Japanese GAAP
\n(except as otherwise specified in such report) and that the audit of such
\nfinancial statements has been performed in accordance with Japanese GAAP and
\n(ii) a report as to all transactions (including the nature, type and amount)
\nbetween the Company and each Member and their respective Affiliates. The Company
\nshall conduct its business such that the report of the Accountants shall not
\ncontain any qualifications as to the scope of the audit or with respect to the
\nCompany153s compliance with Japanese GAAP, except for changes in methods of
\naccounting in which such Accountants concur and except that the foregoing shall
\nnot be deemed to obligate any Member to contribute any capital to the Company.
\nThe Company shall also provide SanDisk with an English version of such report,
\nwhich shall contain sufficient data to enable SanDisk to prepare a
\nreconciliation of the Company153s financial reports from Japanese GAAP to United
\nStates GAAP. The Company shall deliver to SanDisk, at SanDisk153s request and
\nexpense, any other financial information related to the Company that is
\nreasonably requested by SanDisk for tax purposes, including, but not limited to,
\nUS Federal, state, and local income (including withholding tax) or franchise tax
\npurposes.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n\n
\n

(b)<\/p>\n<\/td>\n

\n

Quarterly Statements<\/u>.<\/p>\n<\/td>\n<\/tr>\n

\n

(i)<\/p>\n<\/td>\n

\n

As soon as practicable following the end of each Fiscal Quarter (and in any
\nevent not later than ten (10) days after the end of such Fiscal Quarter), the
\nCompany shall prepare and deliver to each Member and each Executive Officer
\nunaudited consolidated and consolidating balance sheets of the Company as of the
\nend of such Fiscal Quarter and the related unaudited consolidated and
\nconsolidating statements of operations, the Members153 capital accounts and cash
\nflows of the Company for such Fiscal Quarter and for the Fiscal Year to date (or
\nsimilar statements if such statements change as the result of changes in
\nJapanese GAAP), in each case setting forth in comparative form the corresponding
\nfigures for the preceding Fiscal Quarter, for the corresponding Fiscal Quarter
\nof the preceding Fiscal Year and for the budget for the Fiscal Quarter just
\ncompleted and for the Fiscal Year to date.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(ii)<\/p>\n<\/td>\n

\n

The financial statements for such Fiscal Quarter shall be accompanied by a
\ncertificate of the principal accounting or financial officer of the Company to
\nthe effect that such financial statements have been prepared under such
\nofficer153s supervision and that, although such financial statements do not
\ncontain the footnotes and other disclosures required to be presented in interim
\nfinancial statements by Japanese GAAP, such financial statements, in such
\nofficer153s judgment, fairly present the financial condition and results of
\noperations of the Company as of the date and for the periods indicated, subject
\nto normal recurring year-end audit adjustments. The Company shall deliver to
\nSanDisk, at SanDisk153s request and expense and, except as otherwise provided
\nherein, in the same manner as is delivered in connection with the Operating
\nAgreement of Flash Alliance, Ltd. dated as of July 7, 2006, by and between
\nToshiba and SanDisk (Ireland) Ltd., any other financial information related to
\nthe Company (including an English translation thereof), that is reasonably
\nrequested by SanDisk for US financial reporting or Federal, state, and local
\nincome (including withholding tax) or franchise tax purposes.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

16<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

(c)<\/p>\n<\/td>\n

\n

The Company shall obtain a professional tax audit from a qualified accountant
\ncomplying with Japanese GAAP by May 22 of each year (including an English
\ntranslation thereof). As part of its engagement of its auditors, the Company
\nshall cause its auditors to provide such English language financial statements,
\naudit reports, US GAAP reconciliations and consents as are required (or
\nreasonably requested by SanDisk) in connection with SanDisk Corporation153s
\nfilings with the United States Securities and Exchange Commission;
\nprovided<\/em> that SanDisk shall pay for all the costs relating to such
\nauditors153 work. SanDisk may also request that the Company provide SanDisk with
\n“comfort letters” in the manner customary for Japanese auditors in connection
\nwith public offerings in the United States, at SanDisk153s own expense.<\/p>\n<\/td>\n<\/tr>\n

\n

(d)<\/p>\n<\/td>\n

\n

Monthly Reports<\/u>. Each month, the Company shall prepare and deliver to
\neach Member and each Executive Officer the reports and other information set
\nforth on Schedule 8.3<\/u>. Such reports and other information will become
\navailable at the respective times set forth on Schedule 8.3<\/u>.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(e)<\/p>\n<\/td>\n

\n

Business Plan<\/u>. Subject to Sections 10.3(c), (e) and (f), and provided
\nthat the most recently approved Business Plan does not provide for the next
\nFiscal Year, the Company shall, not later than **** prior to the commencement of
\neach Fiscal Year, deliver to each Member a copy of the Business Plan, including
\nthe Company153s monthly budgets, for the upcoming Fiscal Year, as approved by the
\nBoard of Executive Officers.<\/p>\n<\/td>\n<\/tr>\n

\n

(f)<\/p>\n<\/td>\n

\n

Legal Proceedings<\/u>. The Company shall promptly inform each Member and
\neach Executive Officer with regard to litigation, governmental investigations,
\nmaterial government notices and threatened legal proceedings.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

8.4<\/p>\n<\/td>\n

\n

Other Reports and Inspection<\/u>. The Company shall furnish promptly to
\neach Member such other reports, financial data and information relating to the
\nCompany as such Member may reasonably request and shall require the Accountants
\nto provide to each Member copies of any document related to the Company in the
\npossession of the Accountants as such Member may reasonably request. The Company
\nshall, upon reasonable prior notice and during normal business hours, make
\navailable to each Member and their respective professional advisors, from time
\nto time as requested by such Member, all properties, assets, books of account,
\ncorporate records, contracts and documentation, if any, relating to employee
\nbenefits of the Company, and any other material requested by such Member for
\ninspection and, in the case of books of account, corporate records, contracts
\nand documentation, if any, relating to employee benefits, copying, and shall use
\nreasonable efforts to make available to such Member the Accountants and the key
\nemployees of the Company for interviews to verify any information furnished or
\nto enable such Member otherwise to review the Company and its operations. The
\nCompany may condition such availability upon the entering into of reasonable and
\nappropriate confidentiality agreements. Notwithstanding the foregoing, the
\nCompany will not make available to any Member information provided to the
\nCompany on a confidential basis by any other Member without the consent of such
\nother Member.<\/p>\n<\/td>\n<\/tr>\n

\n

8.5<\/p>\n<\/td>\n

\n

Deposit of Funds<\/u>. All funds of the Company and its Subsidiaries not
\notherwise employed shall be deposited from time to time to its credit in such
\nbanks, trust companies or other depositories, or invested in such other
\ninvestments held as cash equivalents, as the Board of Executive Officers shall
\nauthorize. The funds of the Company and its Subsidiaries shall not be commingled
\nwith the funds of any Member or any of their respective Affiliates.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

17<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

9. <\/strong><\/p>\n<\/td>\n

\n

Share of Contribution; Disposition of Interests<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

9.1<\/p>\n<\/td>\n

\n

Restrictions on Transfer of Interests<\/u>.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(a)<\/p>\n<\/td>\n

\n

No Member (nor any permitted transferees of any Member) may Transfer any
\ninterest in the Company, including any of such Member153s Interests, to any
\nPerson, except by a Change of Control; provided, that any Member may Transfer
\nall of its interest in the Company, including all of its Interests, subject to
\nthe Companies Act, to any one (1) of their respective Affiliates, with the prior
\nwritten consent of every other Member, which consent shall not be unreasonably
\nwithheld; and provided, further, that (i) the transferee agrees in writing to
\nbecome a party hereto and assumes all the obligations of the transferring Member
\nhereunder and under each other FF Operative Document to which the transferring
\nMember is a party (except to the extent the express terms of the Patent
\nIndemnification Agreement condition its transferability on the consent of the
\nnon-transferring Member and such Member has not consented to Transfer thereof),
\nand (ii) immediately after giving effect to such Transfer, no Event of Default
\nor an event or condition that with the giving of notice or lapse of time or both
\nwould constitute an Event of Default with respect to the transferee Member shall
\nexist. Following the effectiveness of any such Transfer, the transferring Member
\nshall no longer have the transferred right, title or interest in the Company or
\nany rights under this Agreement and the transferee shall be substituted as a
\nMember for all purposes of this Agreement. The transferring Member shall,
\nhowever, remain responsible for all obligations under this Agreement and the
\nother FF Operative Documents for any transferee which is an Affiliate of the
\ntransferring Member and shall not be released or discharged from any existing
\nliability or obligation to any Person. Any subsequent Transfer of an ownership
\ninterest in such Affiliate by the transferring Member shall be deemed to
\nconstitute a Transfer of Interests requiring compliance with this Section 9.1.\n<\/p>\n<\/td>\n<\/tr>\n

\n

(b)<\/p>\n<\/td>\n

\n

If a Member Transfers its entire interest in the Company pursuant to Section
\n9.1(a), the transferee shall succeed to all the rights and obligations of such
\nMember under this Agreement.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n\n
\n

(c)<\/p>\n<\/td>\n

\n

Any Member may agree to pay amounts equal to distributions received by such
\nMember from the Company to a third party in its sole discretion pursuant to a
\nPermissible Assignment Agreement. “Permissible Assignment Agreement<\/u>”
\nmeans an agreement between a Member and another Person (the “Permissible
\nAssignee<\/u>“) which:<\/p>\n<\/td>\n<\/tr>\n

\n

(i)<\/p>\n<\/td>\n

\n

provides for the grant by such Member to the Permissible Assignee of the
\nright to receive amounts equal to distributions received by such Member from the
\nCompany pursuant to Section 6 or 11 of this Agreement, but does not give the
\nPermissible Assignee any Interests or any other rights whatsoever with respect
\nto the Company;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(ii)<\/p>\n<\/td>\n

\n

provides that under no circumstances (including any Bankruptcy Event in
\nrespect of such Member) may any claim be made by the Permissible Assignee
\nagainst the Company or any such Member or any Affiliate of any such Member or
\nany of their respective assets, under or in connection with such agreement, even
\nif such Member defaults in performance thereunder;<\/p>\n<\/td>\n<\/tr>\n

\n

(iii)<\/p>\n<\/td>\n

\n

provides that the rights of the Permissible Assignee under such agreement may
\nnot be transferred without the prior written consent of each Member and that any
\nsuch Transfer without such consents shall be null and void;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(iv)<\/p>\n<\/td>\n

\n

may not be amended, nor any provision thereof waived, in a manner that would
\ncause it not to be a Permissible Assignment Agreement, without the prior written
\nconsent of the non-assigning Member;<\/p>\n<\/td>\n<\/tr>\n

\n

(v)<\/p>\n<\/td>\n

\n

provides that the assigning Member is authorized to Transfer its entire
\ninterest in the Company pursuant to Section 9.1(a) free and clear of any
\ninterest of the Permissible Assignee and without any liability on the part of
\nthe transferee thereunder to the Permissible Assignee; and<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(vi)<\/p>\n<\/td>\n

\n

contains an express acknowledgment by the Permissible Assignee, for the
\nbenefit of the non-assigning Member and the Company, to the effect of clauses
\n(i)-(v) above.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The assigning Member shall ensure that any payment due to a Permissible
\nAssignee pursuant to or in connection with a Permissible Assignment Agreement
\nshall be made in full to such Permissible Assignee when due.<\/p>\n<\/p>\n

18<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

9.2<\/p>\n<\/td>\n

\n

Admission of New Members<\/u>. No Person shall have the right to become a
\nMember unless and until all the following conditions are satisfied:<\/p>\n<\/td>\n<\/tr>\n

\n

(a)<\/p>\n<\/td>\n

\n

except in the case of a Transfer of all of a Member153s Interests of such
\nMember in accordance with Section 9.1(a) (Restrictions on Transfer of
\nInterests), such Person, the terms and conditions of such Person153s admission as
\na Member and the rights appurtenant to the Interests to be granted or
\nTransferred, as applicable, to such Person are approved by all existing Members
\nand, if applicable, the creation of any new class or group of Interests in the
\nCompany having different rights, powers and duties is reflected in amendments to
\nthe Articles and to this Agreement;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(b)<\/p>\n<\/td>\n

\n

such Person executes a counterpart of this Agreement and such other
\ninstrument or instruments as the Company and a non-transferring Member may
\nreasonably deem appropriate to affirm that the representations and warranties
\ncontained in the Master Agreement are true and correct with respect to such
\nPerson and that such Person agrees to be bound as a Member by this Agreement and
\nall of the covenants and agreements herein; and<\/p>\n<\/td>\n<\/tr>\n

\n

(c)<\/p>\n<\/td>\n

\n

if requested by the Company, an opinion of counsel, a purchaser
\nrepresentation letter or other appropriate documentation is furnished to the
\nCompany establishing that the grant or Transfer, as applicable, of Interests to
\nthe new Member will comply with the Companies Act.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Except to the extent required by law, the Company shall have no obligation to
\nrecognize or to furnish information or make distributions to any new Member or
\nany transferee of a Member who does not become a Member in accordance with
\nSection 9.1 (Restrictions on Transfer of Interests) or this Section 9.2.<\/p>\n<\/p>\n\n\n\n\n
\n

9.3<\/p>\n<\/td>\n

\n

Withdrawal Prohibited<\/u>. Except as otherwise expressly permitted by this
\nAgreement or the Master Agreement, (i) no Member may withdraw from the Company
\nand (ii) no Member may effect or cause a termination or dissolution of the
\nCompany without the prior written consent of all other Members (which consent
\nmay be withheld in such other Member153s sole discretion).<\/p>\n<\/td>\n<\/tr>\n

\n

9.4<\/p>\n<\/td>\n

\n

Purchase of Additional Interest<\/u>. At any time during the term of this
\nAgreement and so long as SanDisk is a Member, SanDisk shall have the right to
\npurchase from Toshiba 0.1% of the total Interests then outstanding in the event
\nthat (i) Toshiba153s patent umbrella does not adequately protect the Company or
\n(ii) dissolution of the Company is commenced pursuant to Section 11 hereof. The
\npurchase price of such Interests shall equal **** as of the date of such
\ntransaction.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

19<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

10. <\/strong><\/p>\n<\/td>\n

\n

Certain Agreements of the Members<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

10.1<\/p>\n<\/td>\n

\n

Taxes and Charges; Governmental Rules<\/u>. Each Member and the Company
\nshall (a) promptly pay all applicable Taxes and other governmental charges
\nimposed against such Member and the Company except to the extent any such Taxes
\nor other charges are being contested in good faith by appropriate proceedings
\nand (b) comply with all applicable Governmental Rules, in each case except to
\nthe extent that nonpayment or noncompliance will not have a material adverse
\neffect on the Company.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

10.2<\/p>\n<\/td>\n

\n

Further Assurances<\/u>. Following the Closing, each Member shall, and
\nshall cause its Affiliates and the Company to take all reasonable actions
\nnecessary or appropriate to effectuate the transactions contemplated by this
\nAgreement, and to obtain (and cooperate with the other Member in obtaining) any
\nGovernmental Action or third party consent required to be obtained or made by it
\nin connection with the transactions contemplated by this Agreement; provided,
\nthat no Burdensome Condition shall be made to exist with respect to such Member
\nor any of its Affiliates in connection therewith.<\/p>\n<\/td>\n<\/tr>\n

\n

10.3<\/p>\n<\/td>\n

\n

Dispute Resolution; Deadlock<\/u>.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(a)<\/p>\n<\/td>\n

\n

The Members shall endeavor to settle, through their respective designees to
\nthe Board of Executive Officers, any disputes which may arise between them,
\nincluding without limitation, failure by the Board of Executive Officers to
\nreach agreement (or failure to take a vote) on any matter requiring Executive
\nOfficers approval pursuant to Section 5.1(d) (Matters Requiring the Approval of
\nthe Board of Executive Officers). The Members shall attempt to resolve the issue
\nor proposed action in question, to the extent practicable, in a manner
\nconsistent with the Company153s most recently approved Business Plan, unless the
\nissue in dispute is the adoption of a new Business Plan, in which case, except
\nas provided for in Section 6.3 of the Master Agreement, the provisions of
\nSections 10.3(c), (e) and (f) shall apply.<\/p>\n<\/td>\n<\/tr>\n

\n

(b)<\/p>\n<\/td>\n

\n

If (i) the Members are unable to agree on any matter requiring the approval
\nof the Members pursuant to Section 4.1(a) (Matters Requiring the Approval of the
\nMembers), (ii) the Board of Executive Officers is unable to agree on any matter
\nrequiring the approval of the Board of Executive Officers pursuant to Section
\n5.1(d) (Matters Requiring the Approval of the Board of Executive Officers)
\n(other than the approval of any Business Plan, with respect to which the failure
\nto agree shall be governed by Sections 10.3(c), (e) and (f)) or (iii) the
\nMembers or the Board of Executive Officers are otherwise unable to resolve a
\ndispute on any other item (other than the approval of any Business Plan, with
\nrespect to which the failure to agree shall be governed by Sections 10.3(c), (e)
\nand (f)), then any Member may bring the matter to the attention of the General
\nManager Memory Division, Semiconductor Company of Toshiba, and the Chief
\nOperating Officer of SanDisk (the “Designated Individuals<\/u>“), who will
\nattempt to find a resolution. If the matter has not been resolved within thirty
\n(30) days of referral to the Designated Individuals, the matter will be referred
\nto the Management Representatives for a final decision, which decision will be
\nfinal and binding on the Company and the Members with respect to any matter
\nspecified in Sections 10.3(b)(i) and (ii) above. If an agreement is reached by
\nthe Management Representatives, the mutually agreed resolution shall be
\nimplemented by the Company. Should no solution be agreed upon within thirty (30)
\ndays after submission of the matter to the Management Representatives with
\nrespect to the matters specified in (iii) above, such matter shall be submitted
\nto arbitration in accordance with Section 2.5 of the Appendix A. Should no
\nsolution be agreed upon within sixty (60) days after submission of the matter to
\nthe Management Representatives with respect to the matters specified in Sections
\n10.3(b)(i) and (ii) above, then the action for which approval was requested will
\nnot occur, unless it is already included in the most recently approved Business
\nPlan, subject to Section 6.5 of the Master Agreement.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(c)<\/p>\n<\/td>\n

\n

Except as provided below and subject to Section 6.3 of the Master Agreement,
\nif by **** of any calendar year during the term of this Agreement, commencing
\n****, the Board of Executive Officers and the Members have not approved and
\nagreed upon a Business Plan for the upcoming Fiscal Year, then any Member may
\nrefer the dispute to the Management Representatives for a decision, which
\ndecision shall be final and binding on the Company and the Members. If a
\ndecision is reached by agreement of the Management Representatives, such
\ndecision shall be implemented by the Company. Should no decision be reached
\nwithin ninety (90) days after submission of the matter to the Management
\nRepresentatives, and unless the Members have agreed to continue operations under
\nthe most recently approved Business Plan until a new Business Plan is approved,
\nthen within ten (10) Business Days thereafter any Member may elect by written
\nnotice to all other Members to declare a deadlock (“Deadlock<\/u>“), except
\nwith respect to any issue where the Master Agreement expressly prohibits
\ndeclaration of a Deadlock.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

20<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

(d)<\/p>\n<\/td>\n

\n

If demand for both Members153 NAND Flash Memory Products is significantly below
\nexpectations, they shall address the matter as contemplated in Section
\n6.6(b)(ii) of the Master Agreement.<\/p>\n<\/td>\n<\/tr>\n

\n

(e)<\/p>\n<\/td>\n

\n

Within thirty (30) days after a Member has notified the other Member of a
\nDeadlock, either Member (the “Initiating Member<\/u>“) may submit to the other
\nMember (the “Responding Member<\/u>“) a written irrevocable notice (the
\n“Deadlock Dissolution Notice<\/u>“) to the effect that the Initiating Member
\noffers to sell to the Responding Member or its designee the Initiating Member153s
\nInterests for a cash payment, by wire transfer of immediately available Japanese
\nYen, in an amount equal to the **** as of the date of such transaction
\nmultiplied by the Initiating Member153s Percentage as of such date.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(f)<\/p>\n<\/td>\n

\n

The Responding Member may accept such offer by written response to the
\nInitiating Member within forty-five (45) days of receipt of the Deadlock
\nDissolution Notice indicating that the Responding Member elects to purchase the
\nInterests of the Initiating Member. If the Responding Member declines to
\nexercise its right to purchase the Interests of the Initiating Member pursuant
\nto this Section 10.3 or fails to respond to such Deadlock Dissolution Notice (or
\nif both Members submit Deadlock Dissolution Notices), the Company shall be
\ndissolved pursuant to Section 11.1(d) (Events of Dissolution), at the end of a
\none-year period for the wind-down of operations commencing with the receipt of
\nthe Deadlock Dissolution Notice by the Responding Member. During such one-year
\nperiod, the Company153s business shall be conducted in accordance with the most
\nrecently approved Business Plan except that additional capital expenditures will
\nnot be made except as required for line maintenance.<\/p>\n<\/td>\n<\/tr>\n

\n

10.4<\/p>\n<\/td>\n

\n

Remedies Upon Event of Default; Termination on Breach<\/u>. If there has
\noccurred and is continuing an Event of Default with respect to a Member (upon
\nsuch occurrence, such Member is referred to herein as the “Defaulting
\nMember<\/u>“) in addition to all other remedies available to the Company or the
\nother Member (the “Nondefaulting Member<\/u>“), whether under any of the FF
\nOperative Documents or other agreements or by law, the Nondefaulting Member
\nshall have the option to take one or more of the following actions:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(a)<\/p>\n<\/td>\n

\n

give written notice to the Defaulting Member of its intention to acquire all
\nof the Interests of the Defaulting Member for a cash payment, by wire transfer
\nof immediately available Japanese Yen, in an amount equal to the **** as of the
\ndate of such transaction multiplied by the Defaulting Member153s Percentage as of
\nsuch date; and\/or<\/p>\n<\/td>\n<\/tr>\n

\n

(b)<\/p>\n<\/td>\n

\n

elect to dissolve the Company pursuant to Section 11.3 (Dissolution Upon
\nEvent of Default), in which case the affairs of the Company shall be wound up
\nand the Company shall be dissolved in accordance with Section 11 (Dissolution).\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

10.5<\/p>\n<\/td>\n

\n

Mechanics of Sale<\/u>.<\/p>\n<\/td>\n<\/tr>\n

\n

(a)<\/p>\n<\/td>\n

\n

The closing of any purchase and sale of Interests pursuant to Section 10.3
\n(Dispute Resolution; Deadlock), 10.4 (Remedies Upon Event of Default;
\nTermination on Breach) or 11.5 (Dissolution Upon Notice) shall take place not
\nlater than the thirtieth (30th) Business Day after notice of the purchase is
\ngiven, as the case may be, except that such period shall be extended as
\nnecessary in order to comply with any Governmental Rule. The purchasing Member
\nshall pay for the Interests being acquired by wire transfer of immediately
\navailable funds in Japanese Yen to an account specified by the selling Member.
\nThe selling Member shall execute all documents necessary to effect the
\nconveyance of its Interests, free and clear of all Liens, to the purchasing
\nMember. In addition, the Members shall enter into an indemnity and release
\nagreement, in a form reasonably satisfactory to each Member, indemnifying and
\nholding harmless the selling Member and its Affiliates for liabilities or claims
\nmade after the date of the purchase and sale under any guarantees or other
\nagreements supporting the obligations of the Company which may have been
\nextended by the selling Member or any of its Affiliates. The Members shall also
\nreach agreement on a reasonable transition plan of up to six (6) months in
\nconnection with services provided to the Company by members of the SanDisk Team
\nassigned to the Company by the Selling Member.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(b)<\/p>\n<\/td>\n

\n

If a Member elects to acquire all of the Interests of the other Member
\npursuant to Section 10.3 (Dispute Resolution; Deadlock), 10.4 (Remedies Upon
\nEvent of Default; Termination on Breach) or 11.5 (Dissolution Upon Notice), such
\nMember shall be obligated to take all actions required of it to consummate the
\napplicable purchase and sale on the date determined pursuant to this Section
\n10.5 (Mechanics of Sale). If any Member has the right to purchase the Interests
\nof any other Member, such Member shall have the right to assign such right to
\npurchase to any other Person.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

21<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

11. <\/strong><\/p>\n<\/td>\n

\n

Dissolution<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

11.1<\/p>\n<\/td>\n

\n

Events of Dissolution<\/u>. The Company shall be dissolved and shall
\ncommence winding up its affairs upon the first to occur of the following. The
\nMembers shall cooperate in taking any necessary corporate steps under the
\nCompanies Act to attain the purpose of this Section 11:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(a)<\/p>\n<\/td>\n

\n

the expiration of the term of the Company pursuant to Section 2.4 (Term;
\nExtension);<\/p>\n<\/td>\n<\/tr>\n

\n

(b)<\/p>\n<\/td>\n

\n

the agreement of the Members to dissolve the Company pursuant to Section 11.2
\n(Dissolution by Agreement);<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(c)<\/p>\n<\/td>\n

\n

the election of the Nondefaulting Member pursuant to Section 11.3
\n(Dissolution Upon Event of Default);<\/p>\n<\/td>\n<\/tr>\n

\n

(d)<\/p>\n<\/td>\n

\n

the first anniversary of the receipt by either Member of a Deadlock
\nDissolution Notice submitted with respect to a failure of the Members to approve
\nand agree upon a Business Plan pursuant to Section 10.3 (Dispute Resolution;
\nDeadlock) if either (i) the Responding Member declines to exercise its right to
\npurchase the Interests of the Initiating Member or fails to respond to such
\nDeadlock Dissolution Notice, or (ii) both Members submit Deadlock Dissolution
\nNotices with respect to such failure to agree;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(e)<\/p>\n<\/td>\n

\n

[<\/strong>Intentionally omitted.]<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

(f)<\/p>\n<\/td>\n

\n

the bankruptcy, dissolution, expulsion or incapacity of a Member or the
\noccurrence of any other event which terminates the membership of a Member in the
\nCompany (“Bankruptcy Event<\/u>“); or<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(g)<\/p>\n<\/td>\n

\n

the election of the Notifying Party to dissolve the Company pursuant to
\nSection 11.5 (Dissolution Upon Notice) unless the Notified Party elects to
\npurchase the Interests of the Notifying Party pursuant to Section 11.5
\n(Dissolution Upon Notice).<\/p>\n<\/td>\n<\/tr>\n

\n

11.2<\/p>\n<\/td>\n

\n

Dissolution by Agreement<\/u>. The Company may be dissolved at any time by
\nthe unanimous written consent of the Members.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

11.3<\/p>\n<\/td>\n

\n

Dissolution Upon Event of Default<\/u>. During the occurrence and
\ncontinuation of an Event of Default (other than a Bankruptcy Event) with respect
\nto a Member, the Nondefaulting Member may elect, by written notice to the
\nDefaulting Member, to dissolve the Company, in which event the Company shall be
\ndissolved and the Members shall take all actions necessary to wind up the
\naffairs of the Company in accordance with Section 11.7 (Winding Up). This
\nSection 11.3 shall not be construed to limit the rights of the Nondefaulting
\nMember under Section 10.4 (Remedies Upon Event of Default) or to seek damages
\nfrom the Defaulting Member or any other Person for the breach of its obligations
\nunder any of the FF Operative Documents.<\/p>\n<\/td>\n<\/tr>\n

\n

11.4<\/p>\n<\/td>\n

\n

[<\/strong>Intentionally omitted.]<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

11.5<\/p>\n<\/td>\n

\n

Dissolution upon Notice<\/u>. At any time between April 1, 2017 and March
\n31, 2018, any Member (the “Notifying Party<\/u>“) may elect, by giving notice
\nto all other Members (the “Notified Party<\/u>“), to dissolve the Company, in
\nwhich event the Company will be dissolved and, within the one (1) year period
\nfollowing the giving of such notice, the Members shall mutually agree upon a
\nplan for winding up the affairs of the Company in accordance with Section 11.7
\n(Winding Up), unless the Notified Party, directly or through any of its
\nAffiliates, elects in writing within three (3) months of receiving such notice,
\nto purchase from the Notifying Party all of its Interests for a cash payment, by
\nwire transfer of immediately available Japanese Yen, in an amount equal to the
\n**** as of the date of such transaction multiplied by the Notifying Party153s
\nPercentage as of such date.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

22<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

11.6<\/p>\n<\/td>\n

\n

Financing Defaults<\/u>.<\/p>\n<\/td>\n<\/tr>\n

\n

(a)<\/p>\n<\/td>\n

\n

If pursuant to Section 6.3(a)(i) of the Master Agreement either Party, as the
\nInvesting Party, exercises its election to terminate this Agreement, the Members
\nshall cooperate in good faith to effect the purchase by Toshiba (or its
\ndesignated Affiliate) and sale by SanDisk of all of SanDisk153s Interests, at a
\nprice equal to SanDisk153s percentage Interest of the outstanding Interests in the
\nCompany multiplied by the **** as of the date such transaction is closed (with
\nestimated **** as agreed by the Members in good faith paid on the closing of
\nsuch transaction and any true-up payment made by the appropriate Party promptly
\nafter determination of the actual **** as of the closing of such purchase and
\nsale transaction).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(b)<\/p>\n<\/td>\n

\n

****<\/p>\n<\/td>\n<\/tr>\n

\n

(c)<\/p>\n<\/td>\n

\n

If pursuant to Section 6.12(d)(ii) of the Master Agreement either Party, as
\nthe Non-Defaulting Party, exercises its election to terminate this Agreement,
\nthe Non-Defaulting Party shall have the same rights as provided in Section
\n11.6(a) and the Members shall cooperate in good faith to effect the purchase by
\nthe Non-Defaulting Party (or its designated Affiliate) and sale by the
\nDefaulting Party of all of the Defaulting Party153s Interests.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

11.7<\/p>\n<\/td>\n

\n

Winding Up<\/u>.<\/p>\n<\/td>\n<\/tr>\n

\n

(a)<\/p>\n<\/td>\n

\n

Upon the dissolution of the Company, the Members shall proceed as promptly as
\npracticable to (i) wind-up the affairs of the Company and cause the Company to
\nsatisfy the Company153s liabilities, (ii) dispose of the Company153s assets as
\nquickly as possible consistent with obtaining the full fair market value of the
\nCompany, preferably, to the extent it is commercially practicable to do so, by
\nselling the Company as a going concern (provided, however, no Member shall be
\nunder any obligation to extend the terms of any FF Operative Document or to
\noffer to enter into any other agreement with a prospective purchaser of the
\nCompany for the purchase or sale of goods or services or the use of facilities
\nor any other business arrangement), and (iii) distribute any net proceeds to the
\nMembers in accordance with Section 11.8 hereof and applicable Law. In connection
\nwith a sale of the Company153s assets under clause (ii), each Member or any of
\ntheir respective Affiliates shall have a right of first offer to acquire the
\nCompany153s tangible personal property in the liquidation process and may also
\nacquire such property through participation at auction except in the event of a
\ndissolution pursuant to Section 11.3 (Dissolution Upon Event of Default), in
\nwhich event the Defaulting Member and its Affiliates shall not have such right
\nof first offer to acquire the Company153s tangible personal property. Each of the
\nMembers shall be furnished with a statement setting forth the assets and
\nliabilities of the Company as of the date of the complete liquidation of the
\nCompany. The Accountants shall review the final accounting and shall render
\ntheir opinion with respect thereto.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(b)<\/p>\n<\/td>\n

\n

During the period of winding-up, the Company shall continue to operate and
\nall the provisions of this Agreement shall remain in effect, except as otherwise
\nexpressly provided herein. The Company shall notify all known creditors and
\nclaimants of the dissolution of the Company in accordance with applicable law.\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

23<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

11.8<\/p>\n<\/td>\n

\n

Liquidation Proceeds<\/u>.<\/p>\n<\/td>\n<\/tr>\n

\n

(a)<\/p>\n<\/td>\n

\n

In the case of the dissolution and liquidation of the Company, the Company
\nmay make a distribution in kind. Any cash and all distributions in kind that are
\nto be distributed shall be distributed to the Members, on a pro rata basis based
\nupon the respective Percentages of the Members as of the date of such
\ndistribution.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n\n
\n

(b)<\/p>\n<\/td>\n

\n

Unless otherwise agreed by the Members, and to the extent permitted under any
\nagreements with third parties, all assets to be distributed upon the dissolution
\nand liquidation of the Company shall be distributed as follows:<\/p>\n<\/td>\n<\/tr>\n

\n

(i)<\/p>\n<\/td>\n

\n

first, to creditors, including Members who are creditors, to the extent
\npermitted by law, in satisfaction of liabilities of the Company, other than for
\ndistributions to Members pursuant to Section 6.2 (Distributions); and<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(ii)<\/p>\n<\/td>\n

\n

second, to the Members on a pro rata basis based upon the respective
\nPercentages of the Members as of the date of such distribution.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

For purposes of this Section 11.8, instruments of transfer and other
\ndocuments reasonably requested by the distributee shall be executed by the
\nCompany or the other Member, or both.<\/p>\n<\/p>\n\n\n\n\n
\n

(c)<\/p>\n<\/td>\n

\n

Any distribution made pursuant to this Section 11.8 shall be made as soon as
\npracticable under and in accordance with applicable Japanese law.<\/p>\n<\/td>\n<\/tr>\n

\n

12. <\/strong><\/p>\n<\/td>\n

\n

Indemnification and Insurance<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

12.1<\/p>\n<\/td>\n

\n

Indemnification<\/u>.<\/p>\n<\/td>\n<\/tr>\n

\n

(a)<\/p>\n<\/td>\n

\n

Subject to Section 12.1(c), the Company shall indemnify each Person who was
\nor is a party or is threatened to be made a party to any threatened, pending or
\ncompleted action, suit or proceeding, whether civil, criminal, administrative or
\ninvestigative (including an action by or in the right of a Member or the
\nCompany), by reason of the fact that such Person is or was a Member or is or was
\nor has agreed to become an Executive Officer or is or was serving or has agreed
\nto serve at the request of the Company as an Executive Officer, officer,
\nemployee or agent of the Company or of another partnership, corporation, joint
\nventure, trust or other enterprise, arising from any action alleged to have been
\ntaken in any such capacity or by reason of any liability or obligation of the
\nCompany, against any and all losses, damages, liabilities, costs, charges,
\nexpenses (including interest, penalties and reasonable attorneys153 fees and
\nexpenses), judgments, fines and amounts paid in settlement (collectively,
\n“Losses<\/u>“) actually and reasonably incurred by him or on his behalf in
\nconnection with such action, suit or proceeding and any appeal therefrom.
\nWithout limiting the generality of the foregoing, any of such Losses shall be
\ndeemed to arise out of a Company liability or obligation if it arises out of or
\nis based upon the conduct of the business of the Company (or any of its
\nSubsidiaries) or the ownership of the property of the Company (or any of its
\nSubsidiaries).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(b)<\/p>\n<\/td>\n

\n

The indemnification provided under this Section 12.1 shall inure to the
\nbenefit of the successors, heirs and personal representatives of any Person
\nentitled to the benefit of such indemnification. Such indemnification shall be a
\ncontract right and shall include the right to be paid advances of reasonable
\nexpenses incurred by any such Person in connection with such action, suit or
\nproceeding.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

24<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

(c)<\/p>\n<\/td>\n

\n

The indemnification provided under this Section 12.1 shall not inure to the
\nbenefit of any Person in respect of Losses to the extent that such Losses (i)
\narise out of or are based upon the gross negligence or willful misconduct of
\nsuch Person or (ii) constitute a tax, levy or similar governmental charge not
\nimposed upon the Company (or any of its Subsidiaries) or on their respective
\nproperties. The indemnification provided under this Section 12.1 shall also not
\nbe available to any Person in respect of any Losses if a judgment or other final
\nadjudication adverse to such Person establishes (x) that such Person153s acts were
\ncommitted in bad faith or were the result of active and deliberate dishonesty
\nand were material to the cause of action so adjudicated or (y) that such Person
\ngained in fact a financial profit or other advantage to which such Person was
\nnot legally entitled. It is understood and agreed that, for the purposes of this
\nSection 12.1, Losses shall be deemed not to arise out of or be based upon the
\ngross negligence or willful misconduct of a Person solely because it arises out
\nof or is based upon the gross negligence, willful misconduct, bad faith or
\nactive and deliberate dishonesty of an Executive Officer, officer or employee of
\nsuch Person if at the time of such gross negligence, willful misconduct, bad
\nfaith or active and deliberate dishonesty, such Executive Officer, officer or
\nemployee was also a member of the SanDisk Team or an Executive Officer acting in
\nhis capacity as such.<\/p>\n<\/td>\n<\/tr>\n

\n

(d)<\/p>\n<\/td>\n

\n

The termination of any action, suit or proceeding by judgment, order,
\nsettlement, conviction or upon a plea of nolo contendere or its equivalent shall
\nnot, of itself, create a presumption that the indemnified Person did not meet
\nthe standard set forth in Section 12.1(c) (Indemnification).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

12.2<\/p>\n<\/td>\n

\n

Insurance<\/u>. The Company may, to the fullest extent permitted by law,
\npurchase and maintain insurance against any liability that may be asserted
\nagainst any Person entitled to indemnity pursuant to Section 12.1.<\/p>\n<\/td>\n<\/tr>\n

\n

12.3<\/p>\n<\/td>\n

\n

Indemnification by the Members<\/u>.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(a)<\/p>\n<\/td>\n

\n

Each Member agrees to, and does hereby, indemnify and hold harmless the
\nCompany and the other Member from and against any and all Losses arising out of,
\nor based upon, the gross negligence or willful misconduct of such Member under
\nthis Agreement or such Member exceeding its authority under this Agreement.<\/p>\n<\/td>\n<\/tr>\n

\n

(b)<\/p>\n<\/td>\n

\n

The provisions of this Section 12.3 shall survive each of the termination of
\nthis Agreement, the dissolution of the Company and the withdrawal of any Member.\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

12.4<\/p>\n<\/td>\n

\n

Assertion of Claims<\/u>.<\/p>\n<\/td>\n<\/tr>\n

\n

(a)<\/p>\n<\/td>\n

\n

In the event that a Person (the “Indemnified Party<\/u>“) desires to assert
\nits right to indemnification from a Person (an “Indemnifying Party<\/u>“)
\nrequired to indemnify such Indemnified Party under this Section 12, the
\nIndemnified Party will give the Indemnifying Party prompt notice of the claim
\ngiving rise thereto (a “Claim<\/u>“), and the Indemnifying Party shall
\nundertake the defense thereof (unless the Claim is asserted against or related
\nto or results from any action or failure to take action by such Indemnifying
\nParty). The failure to promptly notify the Indemnifying Party hereunder shall
\nnot relieve the Indemnifying Party of its obligations hereunder, except to the
\nextent that the Indemnifying Party is actually prejudiced by the failure to so
\nnotify promptly.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n
\n

(b)<\/p>\n<\/td>\n

\n

The Indemnified Party shall not settle or compromise any Claim without the
\nwritten consent of the Indemnifying Party unless the Indemnified Party agrees in
\nwriting to forego any and all claims for indemnification from the Indemnifying
\nParty with respect to such Claim. However, if the Indemnifying Party, within a
\nreasonable time after notice of any such Claim, fails to defend such Claim, the
\nIndemnified Party shall have the right to undertake the defense, compromise or
\nsettlement of such Claim on behalf of and for the account and risk of the
\nIndemnifying Party, subject to the right of the Indemnifying Party to assume the
\ndefense of such Claim at any time prior to settlement, compromise or final
\ndetermination thereof.<\/p>\n<\/td>\n<\/tr>\n

\n

(c)<\/p>\n<\/td>\n

\n

IF THE INDEMNIFYING PARTY HAS UNDERTAKEN THE DEFENSE OF A CLAIM AND (I) IF
\nTHERE IS A REASONABLE EXPECTATION THAT (X) A CLAIM MAY MATERIALLY AND ADVERSELY
\nAFFECT THE INDEMNIFIED PARTY OTHER THAN AS A RESULT OF MONEY DAMAGES OR OTHER
\nMONEY PAYMENTS OR (Y) THE INDEMNIFIED PARTY OR MEMBERS MAY HAVE LEGAL DEFENSES
\nAVAILABLE TO IT OR THEM THAT ARE DIFFERENT FROM OR ADDITIONAL TO THE DEFENSES
\nAVAILABLE TO THE INDEMNIFYING PARTY, OR (II) IF THE INDEMNIFYING PARTY SHALL NOT
\nHAVE EMPLOYED COUNSEL REASONABLY SATISFACTORY TO THE INDEMNIFIED PARTY, THE
\nINDEMNIFIED PARTY SHALL NEVERTHELESS HAVE THE RIGHT, AT THE INDEMNIFYING PARTY153S
\nCOST AND EXPENSE, TO DEFEND SUCH CLAIM.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

25<\/p>\n

\n

\n<\/p>\n

\n<\/p>\n

\n\n\n\n\n
\n

13. <\/strong><\/p>\n<\/td>\n

\n

Miscellaneous<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

13.1<\/p>\n<\/td>\n

\n

Governing Law<\/u>. Notwithstanding anything to the contrary in Appendix A,
\nthis Agreement shall in all respects be governed by and construed in accordance
\nwith the laws of Japan, without regard to the conflict of laws principles.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

13.2<\/p>\n<\/td>\n

\n

Effectiveness<\/u>. This Agreement shall be effective as of the date first
\nwritten above and shall remain in effect until the Termination Date. Sections 1,
\n7, 11.7, 11.8 and 13 shall survive the termination of this Agreement.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

26<\/p>\n

\n

\n<\/p>\n

IN WITNESS WHEREOF, this Agreement has been executed and delivered each party
\nas of the date first above written.<\/p>\n<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n\n

TOSHIBA CORPORATION<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

By:<\/p>\n<\/td>\n

\n

\/s\/ Kiyoshi Kobayashi<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Name:<\/p>\n<\/td>\n

\n

Kiyoshi Kobayashi<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Title:<\/p>\n<\/td>\n

\n

President and CEO<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Semiconductor Company<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Corporate Senior Vice President<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n\n

SANDISK FLASH B.V.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

By:<\/p>\n<\/td>\n

\n

\/s\/ Sanjay Mehrotra<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Name:<\/p>\n<\/td>\n

\n

Sanjay Mehrotra<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Title:<\/p>\n<\/td>\n

\n

Director<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

[<\/strong>Signature Page to Flash Forward Operating
\nAgreement]<\/strong><\/p>\n

\n

\n<\/p>\n

Schedule 5.3<\/p>\n

\n

Management and Operating Reports<\/u><\/p>\n

\n

****<\/p>\n

\n

1<\/p>\n

\n

\n<\/p>\n

Schedule 6.1<\/p>\n

\n

Capital Contributions<\/u><\/p>\n

\n

****<\/p>\n

\n

2<\/p>\n

\n

\n<\/p>\n

Schedule 8.3<\/p>\n

\n<\/p>\n

Monthly Reports<\/u><\/p>\n

\n

****<\/p>\n

\n

3<\/p>\n

\n

\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p><\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8752],"corporate_contracts_industries":[9508],"corporate_contracts_types":[9613,9617],"class_list":["post-42400","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-sandisk-corp","corporate_contracts_industries-technology__hardware","corporate_contracts_types-operations","corporate_contracts_types-operations__jv"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42400","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42400"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42400"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42400"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42400"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}