EXHIBIT 10.36
PRODUCT DEVELOPMENT AGREEMENT
This Product Development Agreement is made and entered into by and between
Toshiba Corporation, a Japanese corporation with a principal place of business
at 1-1, Xxxxxxxx 0-xxxxx, Xxxxxx-xx, Xxxxx 000-0000, Xxxxx (hereinafter
"Toshiba"), and SanDisk Corporation, a Delaware corporation with a principal
place of business at 000 Xxxxxxx Xxxxx, Xxxxxxxxx, XX 00000, U. S. A.
(hereinafter "SanDisk").
WHEREAS, Toshiba and SanDisk, concurrently with the execution of this Agreement,
are entering into a Master Agreement dated as of May 9, 2000 among Toshiba,
Semiconductor North America, Inc. and SanDisk concerning, among other things,
the development and manufacture of NAND Flash Memory Products (the "Master
Agreement"); and
WHEREAS, Toshiba and SanDisk additionally, and in conjunction with the Master
Agreement, have held discussion regarding the joint development of certain NAND
Flash Memory Products and technologies.
NOW, THEREFORE, in consideration of the mutual covenants and premises contained
herein, the parties agree as follows:
ARTICLE 1. DEFINITIONS
1.1 "Products" shall mean the NAND Flash Memory devices developed hereunder,
including, without limitation, the NAND Flash Memory devices specified in
Exhibit A attached hereto, but excluding Flash Memory Controllers.
1.2 Flash Memory Controller" shall mean any firmware, hardware and/or software
that is necessary to operate a NAND Flash memory device.
1.3 "Developed Products" shall mean Products solely developed by either party
during the term of this Agreement, including without limitation, solely
developed derivatives of Jointly Developed Products, provided however, that
Developed Products shall not include cut-downs of Jointly Developed
Products.
1.4 "Jointly Developed Products" shall mean Products jointly developed by
Toshiba and SanDisk during the term of this Agreement.
1.5 "Toshiba Developed Controller" shall mean a Flash Memory Controller solely
developed by Toshiba during the term of this Agreement, including without
limitation, solely developed derivatives of Jointly Developed Controllers.
1.6 "SanDisk Developed Controller" shall mean a Flash Memory Controller solely
developed by SanDisk during the term of this Agreement, including without
limitation, solely developed derivatives of Jointly Developed Controllers.
1.7 "Jointly Developed Controller" shall mean a Flash Memory Controller
developed by Toshiba and SanDisk during the term of this Agreement.
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
1.8 "Development Project" shall mean all development activities undertaken
pursuant to Article 2.
1.9 "Background Technology" shall mean the Technology which has been or will be
developed by or for either party independently of the Development Projects
and owned or controlled by such party prior to or during the term of this
Agreement, and which shall be deemed reasonably necessary for the other
party to perform the Development Projects. Background Technology may be
either SanDisk Background Technology or Toshiba Background Technology, as
the context requires.
1.10 "Technology" shall mean all developments, ideas, inventions, Test
Technology and other technical information (whether or not patentable)
relating to Products as well as intellectual property rights relating
thereto, including, but not limited to, trade secrets, copyrights and
maskwork rights, but specifically excluding Patents.
1.11 "Developed Technology" shall mean Technology solely developed by either
party in the course of the Development Projects.
1.12 "Jointly Developed Technology" shall mean Technology jointly developed by
Toshiba and SanDisk in the course of the Development Projects.
1.13 "Test Technology" shall mean all developments, ideas, inventions, test
programs. test methods, configured and developed hardware and other
technical information (whether or not patentable) for all stages of product
manufacture, as well as intellectual property rights relating thereto, but
specifically excluding Patents, concerning testing of Products and Flash
Memory Controllers.
1.14 "Controller Technology" shall mean all developments, ideas, inventions and
technical information (whether or not patentable) relating to Flash Memory
Controllers and intellectual property rights relating thereto, including,
but not limited to, trade secrets, copyrights and maskwork rights, but
specifically excluding Patents.
1.15 "Jointly Developed Controller Technology" shall mean Controller Technology
developed by Toshiba and SanDisk during the term of this Agreement.
1.16 "Developed Controller Technology" shall mean Controller Technology solely
developed by either party during the term of this Agreement.
1.17 "SanDisk Controllers" shall mean SanDisk Developed Controllers, Jointly
Developed Controllers, SanDisk Developed Controller Technology, and Jointly
Developed Controller Technology.
1.18 "SanDisk Products and Technology" shall mean SanDisk Developed Products,
SanDisk Background Technology, SanDisk Developed Technology and SanDisk
Controllers.
1.19 "Toshiba Products and Technology" shall mean Toshiba Developed Products,
Toshiba Background Technology, Toshiba Developed Technology, Toshiba
Developed Controller Technology and Toshiba Developed Controllers.
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1.20 "Joint Products and Technology" shall mean Jointly Developed Products and
Jointly Developed Technology.
1.21 "Patents" shall mean all classes of types of patents, utility models
(excluding design patents) and any applications therefor in all countries
of the world, which are, now or hereafter, owned or controlled by either
party hereto.
1.22 "Jointly Developed Patents" shall mean Patents which arise out of the
inventions jointly made by the employees of Toshiba or SanDisk in the
course of the Development Projects.
1.23 "Effective Date" shall be May 9, 2000.
1.24 "Agreement" means this Product Development Agreement together with any
Exhibits, Schedules, Appendices and Attachments hereto and the Rules
Document.
1.25 "Rules Document" shall mean the Definitions, Rules of Construction and
Documentary Conventions, attached as Appendix A.
ARTICLE 2. DEVELOPMENT
2.1 Each party agrees to undertake at Toshiba's or SanDisk's facilities the
Development Projects specified in Exhibit A in accordance with a
development schedule and activity allocations to be determined by the
Coordinating Committee. During the term of this Agreement, the parties will
use reasonable efforts to continually identify and pursue joint development
of new products and Exhibit A may be amended from time to time, in
accordance with the approval of the Coordinating Committee, to reflect such
new Development Projects. Without limiting the foregoing, the parties will
discuss the development of a SmartMedia MLC Controller.
2.2 Each party shall, from time to time during the term of this Agreement and
to the extent reasonably necessary to perform the Development Projects,
provide the other party with technical information relating to its
Background Technology.
2.3 Each party shall, from time to time during the term of this
Agreement, provide the other party with technical information relating
to Jointly Developed Technology and Jointly Developed Controller
Technology.
2.4 A party that is in possession of Jointly Developed Technology, Jointly
Developed Controller Technology or other technical information, including
without limitation the items specified in Exhibit C, shall, upon request of
the other party made at any time during the term of this Agreement or for a
period of one year thereafter, promptly deliver to the other party copies
of such information as requested. When requested by either party, such
exchange of information, shall include, but shall not be limited to, test
flow conditions and related know-how.
2.5 During the term of this Agreement, upon request by either party and subject
to the availability of the other party's engineers, the other party shall
(i) delegate its qualified engineers to advise and consult with such
requesting party at the requesting party's
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facilities or (ii) receive qualified engineers of the requesting party to
train and advise at its own facilities. The details of such delegation or
reception of the engineers shall be decided by the Coordinating Committee
as described in Article 3.
2.6 This Agreement shall not encompass or include products or technology
developed jointly or solely by the parties, utilizing or based on Toshiba
NOR flash technology or other Toshiba non-NAND Flash technologies, or
SanDisk NOR flash technology or other SanDisk non-NAND flash technologies.
2.7 Either party may propose to disclose (the "proposing party") Jointly
Developed Controller Technology to any Qualified Design House under a
written agreement of confidentiality and non-use, for a period of
restriction generally to be discussed and agreed upon by the Coordinating
Committee, but if not so discussed or agreed upon, then for a period of at
least seven years, for the purpose of engaging such Qualified Design House
to design a solely developed Flash Memory Controller for the account of the
proposing party to be manufactured and sold by the proposing party. Prior
to making such disclosure to a Qualified Design House, the proposing party
shall give the other party to this Agreement (the "reviewing party") the
opportunity to jointly develop such product with the proposing party. The
opportunity should be presented in detail at a meeting of the Coordinating
Committee and the reviewing party will be given a reasonable amount of time
to consider the proposal. If the reviewing party accepts the opportunity to
enter into such joint development, the proposing party shall not make the
disclosure to the Qualified Design House. For the purpose of this section,
"Qualified Design House" shall mean a company which offers services to
design devices similar to Flash Memory Controllers but which does not make
or sell flash memory devices or flash cards.
ARTICLE 3. COORDINATING COMMITTEE
3.1 Immediately after the Effective Date, the parties shall jointly establish
the "Coordinating Committee" which shall be comprised of six (6)
representatives; three (3) of which shall be appointed by Toshiba and three
(3) of which shall be appointed by SanDisk, which appointments shall have
been approved by each of the parties, provided that such approval shall not
be unreasonably withheld.
3.2 The Coordinating Committee shall be responsible for:
(a) Determining new Products and Flash Memory Controllers to be jointly
developed, including product design and manufacturing specifications.
All Product development projects, including Flash Memory Controller
development projects, and projects considered by either party for sole
development, shall be disclosed to the Coordinating Committee prior to
the start of development;
(b) Reviewing the progress of the Development Projects against the
development schedule and evaluating the Development Projects;
(c) Discussing necessary changes to the scope or the schedules of the
Development Projects and actions to be taken;
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(d) Resolving any differences in opinions between the parties which may
arise during the course of the Development Projects;
(e) Allocation of wafer processing costs as specified in Article 5;
(f) Discussing inventorship of patents conceived by the parties as a
result of any joint development activity hereunder; and
(g) Any other matters as agreed upon by both parties.
All decisions by the Coordinating Committee, including without
limitation, any decision to jointly develop Products or Flash Memory
Controllers, shall be made unanimously and shall be set forth in
writing. If any matter is not determined by unanimous consent of the
Coordinating Committee, such matter shall be referred to Management
Committee (as defined in the Master Agreement executed concurrently
herewith) for its final decision. In connection with discussing
inventorship of patents pursuant to Section 3.2(f), the parties agree
to notify the Coordinating Committee as soon as possible, but not
later than three months after such party's knowledge of the filing
date of the particular patent.
3.3 The Coordinating Committee shall have periodical meetings which shall be
led by the Technical Coordinator of both parties on a quarterly basis, or
at such other intervals, alternatively in the United States and in Japan or
such other places as mutually agreed upon by the Technical Coordinators of
each party. Either party may invite other of its employees to attend such
meetings.
ARTICLE 4. TECHNICAL COORDINATORS
Each party shall designate from time to time its Technical Coordinator from
its two members of the Coordinating Committee to be appointed in accordance with
Article 3.1. The Technical Coordinator shall be responsible for supervision of
transmittal and receipt of technical information hereunder, coordinating the
site visits by engineers and coordination of the training and consultation to be
performed hereunder. The initial Technical Coordinators for each party are as
follows:
For Toshiba: Xxxxxxx Xxxxxxx
For SanDisk: Xxx Xxxx
ARTICLE 5. COST
Each party shall bear all costs and expenses incurred by such party in
performing the Development Projects which will include without limitation the
salaries of its engineers involved in joint development projects hereunder.
Notwithstanding the foregoing, in order to balance each party's cost for Jointly
Developed Products and Jointly Developed Flash Memory Controllers, SanDisk shall
share Toshiba's direct costs of processing certain wafers to be made for the
purpose of such Product design verification (including mask costs) and other
material costs relating thereto such as subcontractor fees for packaging and
analysis in a manner as set
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forth in Exhibit B. Similarly, Toshiba shall share the direct costs of
processing certain wafers to be made for the purpose of Flash Memory Controller
verification (including mask costs) and other material costs relating thereto,
such as subcontractor fees for packaging and analysis, in a manner as determined
by the Coordinating Committee but conceptually similar to the nature of the
expenses shared by SanDisk for Products.
ARTICLE 6. OWNERSHIP
6.1 Toshiba Products and Technology shall be and remain the exclusive property
of Toshiba, subject to the license granted in accordance with Article 7.1
hereof. From time to time, upon request of SanDisk, Toshiba shall offer
SanDisk, based upon reasonable terms, a non-exclusive, worldwide,
non-transferable license, without right to sublicense, to develop, have
developed, make, have made, use, sell, modify and otherwise dispose of all
or a portion of the Toshiba Products and Technology.
6.2 Toshiba Patents shall be and remain the exclusive property of Toshiba,
subject to the licenses granted in accordance with the Patent Cross License
Agreement between SanDisk Corporation and Toshiba Corporation, including
any amendments thereto (as so amended, the "Patent Agreement").
6.3 SanDisk Products and Technology shall be and remain the exclusive property
of SanDisk, subject to the licenses granted in accordance with Article 7.2
and 7.3 hereof. From time to time, upon request of Toshiba, SanDisk shall
offer Toshiba, based upon reasonable terms, a non-exclusive, worldwide,
non-transferable license, without right to sublicense, to develop, have
developed, make, have made, use, sell, modify and otherwise dispose of all
or a portion of the SanDisk Products and Technology.
6.4 SanDisk Patents shall be and remain the exclusive property of SanDisk,
subject to the licenses granted in accordance with the Patent Agreement.
6.5 Any right, title and interest in and to Joint Products and Technology shall
be jointly owned by Toshiba and SanDisk. With the exception that neither
party may sublicense or transfer Joint Products and Technology without the
prior written consent of the other party, Toshiba and SanDisk each has the
right to use, fully exploit, disclose or otherwise dispose of such Joint
Products and Technology for any purpose without consent of nor accounting
to the other party.
6.6 Any right, title and interest in and to Jointly Developed Patents shall be
jointly owned by Toshiba and SanDisk. Each party shall be free to use such
Jointly Developed Patents for any purpose and shall have the right to grant
non-exclusive licenses to any third party without the consent of nor
accounting to the other party, except as required by Paragraph 18 of the
Amendment to Patent Cross License Agreement. Both parties shall promptly
agree on which of them shall file and prosecute the first patent
application and which countries' corresponding applications shall be filed
and by whom. All expenses incurred in obtaining and maintaining such
patents shall be shared equally by the parties; provided that if one party
elects not to seek or maintain such patents in any particular country or
not to share equally in the expense thereof, the other party shall have the
right to seek or
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maintain such patents in said country at its own expense and shall have
full control over the prosecution and maintenance thereof even though title
to any patent issuing thereon shall be joint. The party electing not to
seek or maintain such patents shall give the other party any necessary
assistance required for the preparation and prosecution of such patents
filed or maintained by the other party. Jointly Developed Patents shall not
be considered "SanDisk Licensed Patents" or "Toshiba Licensed Patents" as
defined in the Patent Agreement.
ARTICLE 7. LICENSE
7.1 Subject to the terms and conditions of this Agreement, Toshiba hereby
grants to SanDisk a non-exclusive, non-transferable, worldwide and
royalty-free license, without the right to sublicense, to use Toshiba
Background Technology provided to SanDisk hereunder to develop, have
developed, make, have made, use, sell, modify and otherwise dispose of
Products, SanDisk Controllers and any other controller products designed by
or for SanDisk.
7.2 Subject to the terms and conditions of this Agreement, SanDisk hereby
grants to Toshiba a non-exclusive, non-transferable, worldwide and
royalty-free license, without the right to sublicense, to use SanDisk
Background Technology provided to Toshiba hereunder to develop, have
developed, make, have made, use, sell, modify and otherwise dispose of
Products, Toshiba Developed Controllers and other controller products not
designed or used for file storage.
7.3 Subject to the terms and conditions of this Agreement, SanDisk hereby
grants to Toshiba a non-exclusive, non-transferable, worldwide and
royalty-free license, without the right to sublicense, to make, have made,
use, sell, modify and otherwise dispose of any Jointly Developed
Controllers.
7.4 It is understood that SanDisk has the right to use, fully exploit,
disclose, sublicense, transfer or otherwise dispose of SanDisk Controllers
and any other controller product designed by or for SanDisk without consent
from or accounting to Toshiba, even if such SanDisk Controllers or other
controller products incorporate any Toshiba Background Technology.
ARTICLE 8. WARRANTY
8.1 Toshiba and SanDisk each provides to the other party its Background and
Developed Technology on an "as-is" basis only, and neither makes any
warranty or representation with respect to the Background Technology or
Developed Technology for any purpose.
8.2 Nothing contained in this Agreement shall be construed as:
(a) a warranty or representation that the manufacture, use, sale or other
disposal of semiconductor products by the other party using any
technical information received under this Agreement will be free from
infringement of patents or any other intellectual property rights of
third party;
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(b) conferring to the other party any right to use in advertising,
publicity or otherwise any trademark, trade name or names, any
contraction, abbreviation or simulations thereof of either party;
(c) conferring to the other party, by implication, estoppel or otherwise,
any license or other right except for the licenses and rights
expressly granted hereunder; or
(d) an obligation to furnish any technical information or know-how except
as otherwise specifically provided herein.
ARTICLE 9. LIMITATION OF LIABILITY
Neither party shall be responsible to the other party in respect of any
action taken or reliance upon any information furnished to the other party under
this Agreement, except to the extent of any breach of the warranties or
agreements set forth in this Agreement. IN NO EVENT SHALL EITHER PARTY BE LIABLE
TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGE
OF ANY KIND, (INCLUDING WITHOUT LIMITATION LOSS OF PROFIT OR DATA) WHETHER OR
NOT ADVISED OF THE POSSIBILITY OF SUCH LOSS.
ARTICLE 10. CONFIDENTIALITY
10.1 As used in this Agreement, the term "Confidential Information" shall mean
any information disclosed by one party to other party pursuant to this
Agreement which is in written, graphic, machine readable or other tangible
form and is marked Confidential, Proprietary or in some other manner to
indicate its confidential nature. Confidential Information may also include
oral information disclosed by one party to the other party pursuant to this
Agreement; provided that such information is designated in a manner to
indicate its confidential nature at the time of disclosure and reduced to a
written summary by the disclosing party within thirty (30) days after its
oral disclosure.
10.2 During the ten (10) year period following receipt of such information, the
receiving party shall keep, and cause its Subsidiaries, its sublicensees
and subcontractors who have access to Confidential Information as permitted
in this Agreement to keep any Confidential Information, including but not
limited to Background Technology and Developed Technology provided by the
disclosing party hereunder, in strict confidence, and shall not disclose
such Confidential Information to any third party without the prior written
consent of the disclosing party. The receiving party shall maintain the
Confidential Information with at least the same degree of care that the
receiving party uses to protect its own strictly confidential information,
but no less than a reasonable degree of care under the circumstances.
Further, the receiving party shall not use the Confidential Information for
any purpose other than for the Development Projects, except as otherwise
provided herein.
10.3 Each party shall not disclose the terms and conditions of this Agreement to
any third party without the prior written consent of the other party.
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10.4 The confidentiality obligation set forth in Articles 10.2 and 10.3 above
shall not apply to any information which:
(a) is already known by the receiving party at the time of disclosure;
(b) is or becomes publicly known through no fault of the receiving party;
(c) is rightfully received by the receiving party from a third party
without any restriction on disclosure;
(d) is independently developed by the receiving party;
(e) is disclosed with the prior written consent of the disclosing party
hereto; or
(f) is disclosed pursuant to applicable laws, regulations or court order,
provided that the receiving party shall give the disclosing party
prompt notice of such request so that the disclosing party has an
opportunity to defend, limit or protect such disclosure.
10.5 Each party understands that disclosure or dissemination of the other
party's Confidential Information, specifically Toshiba Background
Technology provided to SanDisk in connection with the Development Projects,
not expressly authorized hereunder would cause irreparable injury to such
other party, for which monetary damages would not be an adequate remedy and
said other party shall be entitled to equitable relief in addition to any
remedies the other party may have hereunder or at law. In the event SanDisk
is to enter into any joint development work with any third party, SanDisk
warrants that Toshiba Background Technology provided to SanDisk in
connection with the Development Projects shall neither be used for such
joint development work nor be disclosed to any third party unless expressly
otherwise provided hereunder.
10.6 The Technical Coordinator of each party shall ensure that the other party's
Technical Coordinator are informed of and receive in sufficient detail and
completeness the Background and Developed Technology that are exchanged
under Article 2 hereof. Each Technical Coordinator shall also monitor
within their company the distribution of Confidential Information received
from the other party only to those who have a need to know and, further, to
assist in preventing the unauthorized disclosure of the Confidential
Information to personnel within the company who do not have a need to know,
or to third parties. The Technical Coordinator for each party shall
maintain pertinent records and the like, and acknowledge the receipt from
the other party of all Confidential Information.
ARTICLE 11. TERM AND TERMINATION
11.1 This Agreement shall become effective on the Effective Date and continue in
full force and effect until the termination of the Master Agreement, unless
earlier terminated as hereinafter provided. The term of this Agreement may
be extended by mutual agreement of both parties.
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11.2 If either party fails to perform or breaches any of its material
obligations under this Agreement, then, upon sixty (60) days advanced
written notice specifying such failure or breach, the non-defaulting party
shall have the right to terminate this Agreement forthwith, unless the
failure or breach specified in the notice has been cured during the sixty
(60) day period. Termination of this Agreement pursuant to this Article
11.2 shall not relieve the breaching party from any liability arising from
any breach of this Agreement and such termination shall be without
prejudice to any other rights and remedies of the non-breaching party
provided at law or in equity, in addition to the rights and remedies set
forth in this Agreement.
11.3 Either party shall have the right to terminate this Agreement by giving
written notice to the other party upon the occurrence of any of the
following events:
(a) the filing by the other party of a voluntary petition in bankruptcy or
insolvency;
(b) any adjudication that such other party is bankrupt or insolvent;
(c) the filing by such other party of any legal action or document seeking
reorganization, readjustment or arrangement of its business under any
law relating to bankruptcy or insolvency;
(d) the appointment of a receiver for all or substantially all of the
property of such other party; or
(e) the making by such other party of any assignment of whole or
substantial assets for the benefit of creditors.
This Agreement shall terminate on the thirtieth (30th) day after such notice of
termination is given.
11.4 In the event of termination or expiration of this Agreement, the rights and
licenses granted to each party specified in Article 7 shall survive such
termination or expiration, except that if this Agreement is terminated by
either party for any of the events specified in Articles 11.2 and 11.3
above, then the licenses granted to the defaulting party or the
non-terminating party, as the case may be, shall thereupon terminate. The
provisions of Articles 6, 8, 9, 10, 11 and 12 shall survive any termination
or expiration of this Agreement.
ARTICLE 12. GENERAL PROVISIONS
12.1 All notices required or permitted to be given hereunder shall be in writing
and shall be delivered by prepaid air express or registered airmail,
postage prepaid or by telefax, if confirmed or acknowledged, to the
following or to such changed address as may have been previously specified
in writing by the addressed party:
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If to Toshiba:
(For general contract matters)
Toshiba Corporation
1-1, Xxxxxxxx 0-xxxxx
Xxxxxx-xx, Xxxxx 000-0000
Xxxxx
Telephone: 000 00 00000 0000
Facsimile: 011 81 45890 2793
Attention: Senior Manager Flash Memory Engineering
If to SanDisk
(For general contract matters)
SanDisk Corporation
000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: President and CEO
With a copy to:
SanDisk Corporation
000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Vice President and General Counsel
12.2 Neither party is required to disclose any information of which disclosure
is prohibited by laws of the country of such party.
12.3 In the event that the parties will, after the Effective Date, make
announcement regarding this transaction and their business relationship,
such announcement shall be in a mutually agreeable form and at a mutually
agreeable time, provided that any information to be disclosed and/or
announced by either party shall be identified through consultation with the
other party and be agreed upon between the parties before the disclosure
and announcement.
12.4 Neither party shall export or re-export, directly or indirectly, any
technical information disclosed hereunder or direct product thereof to any
destination prohibited or restricted by the export control regulations of
Japan and the United States, including the U.S. Export Administration
Regulations, without the prior authorization from the appropriate
governmental authorities. SanDisk hereby certifies that SanDisk will not
use technical
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information supplied by Toshiba hereunder for any purpose to develop or
manufacture nuclear, chemical, biological weapons or missiles (hereafter
"weapons of mass destruction"). SanDisk further certifies that it will not
sell any products manufactured using Toshiba's technical information to any
party if it knows that the end-user of the products will use them for the
development and/or manufacture of the weapons of mass destruction.
12.5 The rules of construction and documentary conventions set forth in the
Rules Document shall apply to, and are hereby incorporated in, this
Agreement.
IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to be
executed in duplicate, as of the date written below, by their respective duly
authorized officers or representatives.
Toshiba Corporation SanDisk Corporation
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxx Xxxxxx
------------------ --------------
Name: Xxxxx Xxxxxxxx Name: Xxx Xxxxxx
Title: Corporate Senior Vice President Title: President and CEO
and Director President and
CEO Semiconductor Company
Date: May 9, 2000 Date: May 9, 2000
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EXHIBIT A
JOINTLY DEVELOPED PRODUCTS AND JOINTLY DEVELOPED FLASH MEMORY CONTROLLERS
1. 256 M NAND Flash Memory {For 0.16 micron or smaller technologies}
2. 512 M NAND Flash Memory {For 0.16 micron or smaller technologies}
3. 1 G NAND Flash Memory
4. 2 G NAND Flash Memory
5. *
6. *
7. * NAND controllers as decided by the Coordinating Committee.
8. Other NAND memory products as decided by the Coordinating Committee.
Note 1: The Coordinating Committee will determine (i) the best process
technology to utilize for all products to be jointly developed pursuant to this
Agreement (e.g. 0.16 micron, 0.13 micron or other feature size), (ii) whether
such products shall use * or * and (iii) detail product specifications, such as,
but not limited to, voltage operating range * .
Note 2: The Coordinating Committee shall be responsible for determining
development responsibilities of each party with respect to jointly developed
products.
Note 3: All Products and Flash memory Controllers jointly developed hereunder
shall include the development of wafer test products. A `wafer test product' is
a test system used to test semiconductor wafers.
* INDICATES THAT CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO RULE 24b-2. CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
EXHIBIT B
SHARING OF WAFER PROCESSING COSTS -
(FOR JOINTLY DEVELOPED PRODUCTS AND JOINTLY DEVELOPED CONTROLLERS)
JOINTLY DEVELOPED PRODUCTS
SANDISK TOSHIBA
(1) 1H/2000 * *
(2) 2H/2000 * *
(3) 1H/2001 and beyond * *
JOINTLY DEVELOPED CONTROLLERS
(1) Wafer processing cost associated with Jointly Developed Controllers
will be shared by the parties as determined by the Coordinating Committee in
accordance with Article 3.2.
Note 1: All costs charged pursuant to this Exhibit B are direct costs and have
been referred to by the parties as Direct R&D charges. Original back-up
information and financial detail of all such charges shall be made available to
the party paying the shared expense, and all such charges are subject to
financial audit by the external auditors of the party paying the charge. The
party receiving payment shall cooperate with all reasonable requests to view and
make copies of financial back-up and financial detail material associated with
the charges.
Note 2: Payments specified above shall be made within sixty (60) days after
receipt of invoice issued at the end of each calendar half year.
* INDICATES THAT CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION PURSUANT TO RULE 24b-2. CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
EXHIBIT C
Technical Information to be Exchanged by the Parties In Connection with
Jointly Developed Technology and Jointly Developed Controller Technology1
(Non-exclusive List)
1. Device Specifications
2. Process Specifications
3. Design Specifications
4. Product Specifications
5. Process Flow
6. Design Schematics
7. Simulation Results
8. Test Flow
9. Test Conditions
10. Product Data Base
11. Reliability Data
12. Product Qualification Procedures
13. Yield Information
14. Failure Analysis
15. Controller Firmware
16. Controller Software
--------
1 All such information shall be provided in English.
APPENDIX A
DEFINITIONS, RULES OF CONSTRUCTION AND
DOCUMENTARY CONVENTIONS
In any agreement or instrument that incorporates the definitions set forth
in this Appendix and states that the rules of construction and documentary
conventions set forth herein shall apply to such agreement or instrument, then,
unless such agreement or instrument otherwise requires:
ARTICLE I
DEFINITIONS
The following terms shall have the specified meanings:
"Accountants" means such firm of nationally recognized independent
certified public accountants for the Company as is appointed pursuant to the
Operating Agreement from time to time. Initially, the Accountants shall be
Deloitte & Touche LLP.
"Act" means the Virginia Limited Liability Company Act, as in effect from
time to time.
"Affiliate" of any Person means any other Person which directly or
indirectly controls, is controlled by or is under common control with, such
Person; PROVIDED, HOWEVER, that the term Affiliate, (a) when used in relation to
the Company, shall not include either Member or any of its Affiliates, and (b)
when used in relation to a Member or any of its Affiliates, shall not include
the Company or any of its Subsidiaries.
"Articles" means the Articles of Organization of the Company.
"Bankruptcy Event" means, with respect to any Person, the occurrence or
existence of any of the following events or conditions: such Person (1) is
dissolved; (2) becomes insolvent or fails or is unable or admits in writing its
inability generally to pay its debts as they become due; (3) makes a general
assignment, arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors' rights, or a petition is
presented for its winding up or liquidation and, in the case of any such
proceeding or petition instituted or presented against it, such proceeding or
petition (A) results in a judgment of insolvency or bankruptcy or the entry of
an order for relief or the making of an order for its winding up or liquidation
or (B) is not dismissed, discharged, stayed or restrained in each case within 60
days of the institution or presentation thereof; (5) has a resolution passed by
its governing body for its winding-up or liquidation; (6) seeks or becomes
subject to the appointment of an
administrator, receiver, trustee, custodian or other similar official for it or
for all or substantially all its assets (regardless of how brief such
appointment may be, or whether any obligations are promptly assumed by another
entity or whether any other event described in this clause (6) has occurred and
is continuing); (7) experiences any event which, under the applicable laws of
any jurisdiction, has an analogous effect to any of the events specified in
clauses (1) through (6) above; or (8) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the foregoing
acts.
"Burdensome Condition" means, with respect to any proposed transaction, any
action taken, or credibly threatened, by any Governmental Authority or (except
if such action or threat is frivolous) other Person to challenge the legality of
such proposed transaction, including (i) the pendency of a governmental
investigation (formal or informal) in contemplation of the possible actions
described in clauses (ii)(A), (ii)(B) or (ii)(C) below, (ii) the institution of
a suit or the written threat thereof (A) seeking to restrain, enjoin or prohibit
the consummation of such transaction or material part thereof, to place any
material condition or limitation upon such consummation or to invalidate,
suspend or require modification of any material provision of any Operative
Document, (B) challenging the acquisition by either Member of its interest in
the Company or (C) seeking to impose limitations on the ability of either Member
effectively to exercise full rights as a Member in the Company, including the
right to act on all matters properly presented to the Members pursuant to the
Operating Agreement, or (iii) an order by a court of competent jurisdiction
having any of the consequences described in (ii)(A), (ii)(B) or (ii)(C) above,
or placing any conditions or limitations upon such consummation that are
unreasonably burdensome in the reasonable judgment of the applicable Person.
"Business Day" means any day (other than a day which is a Saturday, Sunday
or legal holiday in the State of California, the Commonwealth of Virginia or
Japan) on which banks are open for business in California, Virginia, and Tokyo,
Japan.
"Business Plan" means the Initial Business Plan and each subsequent
business plan, including budgets and projections for the Company for each
relevant period, adopted in accordance with Section 3.04(c) of the Operating
Agreement and complying with Section 3.04(b) of the Operating Agreement.
"Capital Contribution" means each capital contribution to be made by each
Member pursuant to Schedule 6.01 to the Operating Agreement.
"Capital Transaction" means a disposition by the Company of property which
is or has been property of a character subject to the allowance for depreciation
provided in Section 167 of the Code if such disposition results in the
recognition of gain or loss by the Company. In addition, if the value of
property is adjusted pursuant to Section 7.01(B) of the Operating Agreement, the
amount of such adjustment shall be treated as an item of gain from a Capital
Transaction (if the adjustment is a positive adjustment) or an item of loss from
a Capital Transaction (if the adjustment is a negative adjustment).
2
"Change of Control" with respect to a Person means a transaction or series
of related transactions as a result of which (i) more than 50% of the beneficial
ownership of the outstanding common stock or other ownership interests of such
Person (representing the right to vote for the Board of Directors or similar
organization of such Person) is acquired by another Person or affiliated group
of Persons, whether by reason of stock acquisition, merger, consolidation,
reorganization or otherwise or (ii) the sale or disposition of all or
substantially all of a Person's assets to another Person or affiliated group of
Persons.
"Closing" means the closing of the transactions described in Section 3.01
of the Master Agreement.
"Closing Date" means the date mutually agreed for the Closing by the
parties to the Master Agreement; PROVIDED, HOWEVER, that in no event will the
Closing Date be later than September 1, 2000, without the written agreement of
both Parents.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute. ANY reference to a particular provision of the
Code or a Treasury Regulation promulgated pursuant to the Code means, where
appropriate, the corresponding provision of any successor statute or regulation.
"Company" means FlashVision, L.L.C., a limited liability company formed by
the Members under the laws of thE Commonwealth of Virginia.
The term "control" (including its correlative meanings "controlled by" and
"under common control with") means possession, directly or indirectly, of power
to direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by contract
or otherwise).
"DSC" means Dominion Semiconductor Company, L.L.C.
"DSC Foundry Agreement" means the Foundry Agreement between DSC and the
Company.
"Event of Default" means, with respect to a Member, the occurrence or
existence of any of the following events or conditions which remains uncured for
sixty (60) days following receipt of written notice thereof:
(a) a Bankruptcy Event of such Member or its Parent or any Person of which
such Member is a Subsidiary;
(b) the failure of such Member to make any required Capital Contribution
within forty-five (45) Business Days after receipt of written notice from the
Company or the other Member that such Capital Contribution was not made when due
under the Operating Agreement; or
3
(c) the breach by such Member of its covenant in Section 9.01 of the
Operating Agreement or the breach by the Parent of such Member of its covenant
in Section 6.01(c) of the Master Agreement, provided that a Change of Control of
Member or of a Parent shall not be deemed a event of default.
"Fiscal Quarter" means, unless changed by the Operating Committee, a
calendar quarter.
"Fiscal Year" means, unless otherwise required by the Code or applicable
Treasury Regulations, the one year period commencing on April 1 of each year.
"Foundry Agreements" means, collectively, the DSC Foundry Agreement and the
Yokkaichi Foundry Agreement.
"GAAP" means generally accepted accounting principles in the United States
as in effect from time to time, consistently applied.
"GAAS" means generally accepted auditing standards in the United States as
in effect from time to time.
"Governmental Action" means any authorization, consent, approval, order,
waiver, exception, variance, franchise, permission, permit or license of, or any
registration, filing or declaration with, by or in respect of, any Governmental
Authority.
"Governmental Authority" means any United States or Japanese federal,
state, local or other political subdivision or foreign governmental Person,
authority, agency, court, regulatory commission or other governmental body,
including the Internal Revenue Service and the Secretary of State of any State.
"Governmental Rule" means any statute, law, treaty, rule, code, ordinance,
regulation, license, permit, certificate or order of any Governmental Authority
or any judgment, decree, injunction, writ, order or like action of any court or
other judicial or arbitration tribunal.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976
and the rules and regulations promulgated thereunder.
"Indebtedness" of any Person means, without duplication:
(a) all obligations (whether present or future, contingent or otherwise, as
principal or surety or otherwise) of such Person in respect of borrowed money or
in respect of deposits or advances of any kind;
(b) all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments;
4
(c) all obligations of such Person upon which interest charges are
customarily paid, except for trade payables;
(d) all obligations of such Person under conditional sale or other title
retention Agreements relating to property or assets purchased by such Person;
(e) all obligations of such Person issued or assumed as the deferred
purchase price of property or services (other than with respect to the purchase
of personal property under standard commercial terms);
(f) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed;
(g) all guarantees by such Person of Indebtedness of others;
(h) all obligations of such Person to pay rent or other amounts under any
lease of (or other arrangement conveying the right to use) real or personal
property (or a combination thereof), which obligations would be required to be
classified and accounted for as capital leases on a balance sheet of such Person
prepared in accordance with GAAP;
(i) all obligations of such Person (whether absolute or contingent) in
respect of interest rate swap or protection agreements, foreign currency
exchange agreements or other interest or exchange rate hedging arrangements; and
(j) all obligations of such Person as an account party in respect of
letters of credit and bankers' acceptances.
The Indebtedness of any Person shall include the Indebtedness of any
partnership in which such Person is a general partner.
"Initial Business Plan" means the initial business plan of the Company as
agreed to and adopted by the members concurrently with the execution of the
Master Agreement.
"License Agreement" means the Patent Cross License Agreement dated July 30,
1997 by and between Toshiba and SanDisk.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, encumbrance, charge OR security interest in or on such asset, (b)
the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement relating to such asset and (c) in the
case of securities, any purchase option, call or similar right with respect to
such securities.
5
Any reference to any event, change or effect being "material" with respect
to any Person means an event, change or effect which is or, insofar as
reasonably can be foreseen, will be material to the condition (financial or
otherwise), properties, assets, liabilities, capitalization, licenses,
businesses, operations or prospects of such Person and, in the case of the
Company, the capital accounts of the members or the ability of the Company to
carry out its then current Business Plan.
"Master Agreement" means the Master Agreement dated as of May 9, 2000 by
and among Toshiba, SENA and SanDisK.
"Member" means, in the case of the Company, each of SENA and SanDisk, and
any other Person who becomes a member in the Company in accordance with the
terms of the Operating Agreement.
"Membership Interest" means a Member's aggregate rights in the Company,
including the Member's right to a share of the profits and losses of the
Company, the right to receive distributions from the Company and the right to
vote and participate in the management of the Company.
"Member Representative" means, with respect to the Company, a member of the
Operating Committee appointed pursuant to Section 5.01(b) of the Operating
Agreement.
"Net Book Value" means, with respect to any Person, the total assets of
such Person less the total liabilities of such Person, in each case as
determined in accordance with GAAP.
"Net Profits" and "Net Losses" means, subject to Section 7.02 of the
Operating Agreement, the taxable income and tax loss of the Company for Federal
income tax purposes for a given Fiscal Year, increased by the amount of any tax
exempt income of the Company during such Fiscal Year and decreased by the amount
of any Code Section 705(a)(2)(B) expenditures (within the meaning of Treasury
Regulation Section 1.704-1(b)(2)(iv)(i)) of the Company during such Fiscal Year;
PROVIDED, HOWEVER, that, in the case of Section 704(c) Property, depreciation
for each Fiscal Year shall be an amount equal to (I) the basis recovered for
such Fiscal Year under the rules prescribed by Regulation Section 1.704-3(d) if
the remedial method is adopted with respect to such Section 704(c) Property and
(II) in all other cases, (x) the depreciation for Federal income tax purposes
with respect to such Section 704(c) Property for such Fiscal Year multiplied by
(y) a fraction (i) the numerator of which is the fair market value of such
Section 704(c) Property on the date of contribution or revaluation and (ii) the
denominator of which is the basis of such Section 704(c) Property on the date of
contribution or revaluation for Federal income tax purposes; and PROVIDED
FURTHER, HOWEVER, that if the basis of such Section 704(c) Property for Federal
income tax purposes is zero, depreciation for each Fiscal Year shall be computed
under any reasonable method in accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(G)(3) that is approved by both Members.
6
To the extent an adjustment to the adjusted tax basis of any Partnership asset
pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to
Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in
determining Capital Accounts as a result of a distribution other than in
complete liquidation of a Member's interest, the amount of such adjustment shall
be treated as an item of gain (if the adjustment increases the basis of the
asset) or loss (if the adjustment decreases the basis of the asset) from the
disposition of the asset and shall be taken into account for purposes of
computing Net Profits or Net Losses.
"Operating Agreement" means the Operating Agreement dated as of the Closing
Date between SanDisk and SENA.
"Operating Committee" means the management committee of the Company
established pursuant to Section 5.01(a) OF the Operating Agreement.
"Operative Documents" means the Operating Agreement, the Master Agreement,
the Amendment to Patent License Agreement, the Articles, the Yokkaichi Foundry
Agreement, the Environmental Indemnity Agreement, the Common R&D and
Participation Agreement, the Product Development Agreement and, when executed,
the DSC Foundry Agreement.
"Parent" means Toshiba and SanDisk and each of them.
"Percentage" means, with respect to SENA, 50.1%, and with respect to
SanDisk, 49.9%; PROVIDED, HOWEVER, if either Member transfers its entire
Membership Interest to any Affiliate in accordance with the Operating Agreement,
its Percentage shall be 0% and such Affiliate transferee shall receive the
entire Percentage of the transferring Member.
"Permitted Liens" means (a) the rights and interests of the Company, either
Member or any Affiliate of any such Person as provided in the Operative
Documents; and (b) Liens for Taxes which are not due and payable or which may
after contest be paid without penalty or which are being contested in good faith
and by appropriate proceedings and so long as such proceedings shall not involve
any substantial risk of the sale, forfeiture or loss of any part of any relevant
asset or title thereto or any interest therein.
"Person" means any individual, firm, company, corporation, limited
liability company, unincorporated association, partnership, trust, joint
venture, Governmental Authority or other entity, and shall include any successor
(by merger or otherwise) of such entity.
"Purchase and Supply Agreement" means that certain Purchase and Supply
Agreement to be entered into in connection with the Master Agreement, by and
among the Company, SENA and SanDisk.
"SanDisk" means SanDisk Corporation, a Delaware corporation.
7
"Seconded Employee" means an individual who was originally an employee of a
Member or any of its Affiliates and who was assigned to the Company or any of
its Subsidiaries by such Member or such Affiliate at the request of such Member
as contemplated by Section 7.07 of the Master Agreement.
"Section 704(c) Property" means any property contributed to the Company
that has a tax basis for Federal income tax purposes on the date of its
contribution that differs from its fair market value on such date and any
Company property that is revalued pursuant to Section 7.01(b) of the Operating
Agreement. For purposes of calculating Net Profits or Net Losses arising from
any Capital Transaction involving Section 704(c) Property, the basis of such
Section 704(c) Property shall be deemed to be its fair market value on the date
of contribution or revaluation less the accumulated depreciation (calculated in
accordance with the provisos to the definition of Net Profits and Net Losses)
arising after that date with respect to such Section 704(c) Property.
"SENA" means Semiconductor North America, Inc., a Delaware corporation.
"Subsidiary" of any Person means any other Person:
(i) more than 50% of whose outstanding shares or securities (representing
the right to vote for the election of directors or other managing authority)
are, or
(ii) which does not have outstanding shares or securities (as may be the
case in a partnership, joint venture or unincorporated association), but more
than 50% of whose ownership interest representing the right to make decisions
(equivalent to those generally reserved for the board of directors of a
corporation) for such other Person is,
now or hereafter owned or controlled, directly or indirectly, by such Person,
but such other Person shall be deemed to be a Subsidiary only so long as such
ownership or control exists; PROVIDED, HOWEVER, that the term Subsidiary as used
in any Operative Document, when used in relation to a Member or any of its
Affiliates, shall not include the Company or any of its Subsidiaries.
"Tax" or "Taxes" means all United States or Japanese Federal, state, local
or other political subdivision and foreign taxes, assessments and other
governmental charges, including (a) taxes based upon or measured by gross
receipts, income, profits, sales, use or occupation and (b) value added, ad
valorem, transfer, franchise, withholding, payroll, employment, excise or
property taxes, together with (c) all interest, penalties and additions imposed
with respect to such amounts and (d) any obligations under any agreements or
arrangements with any other Person with respect to such amounts.
"Toshiba" means Toshiba Corporation, a Japanese corporation.
8
"Transfer" means any transfer, sale, assignment, conveyance, creation
(whether or not voluntary) of any Lien (other than a Permitted Lien), or other
disposal or delivery, including by dividend or distribution, whether made
directly or indirectly, voluntarily or involuntarily, absolutely or
conditionally, or by operation of law or otherwise.
"Unique Activities" means production activities of the Company at the
request of either Member to (i) implement changes in the manufacturing processes
to be employed for Products to be manufactured for such Member (or its
Affiliates) that are not agreed to by the other Member, (ii) commence
manufacturing other Products for the requesting Member (or its Affiliates) that
the other Member does not desire to have manufactured for it and which require a
change in manufacturing processes or in the utilization of the Facility or
production resources, or (iii) implement any other change in its operations in
order to manufacture Products specifically for the requesting Member (or its
Affiliates).
"Yokkaichi" means Toshiba's manufacturing facility located at Yokkaichi,
Japan.
"Yokkaichi Foundry Agreement" means the Foundry Agreement dated as of May
9, 2000 between Toshiba and SanDisk Limited (Japan).
ARTICLE II
RULES OF CONSTRUCTION AND DOCUMENTARY CONVENTIONS
SECTION 2.01 AMENDMENT AND WAIVER. (a) No amendment to or waiver of any
agreement or instrument incorporating these Rules of Construction and
Documentary Conventions shall be effective unless it shall be in writing,
identify with specificity the provisions of the applicable agreement or
instrument that are thereby amended or waived and be signed by each party
thereto. Any failure of a party to comply with any obligation, covenant,
agreement or condition contained in such agreement or instrument may be waived
by the party entitled to the benefits thereof only by a written instrument duly
executed and delivered by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure of compliance.
SECTION 2.02 SEVERABILITY. If any provision of any agreement or instrument
incorporating these Rules of Construction and Documentary Conventions or the
application of any such provision is invalid, illegal or unenforceable in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision of such agreement or instrument (except as may be expressly
provided in such agreement or instrument) or invalidate or render unenforceable
such provision in any other jurisdiction. To the extent permitted by applicable
law, the parties waive any provision of law that renders any provision of such
agreement or instrument invalid, illegal or unenforceable in any respect. The
parties shall, to the extent lawful and practicable, use their reasonable
efforts to enter into arrangements to reinstate the intended benefits, net of
the intended burdens, of any such provision held invalid,
9
illegal or unenforceable. If the intent of the parties for entering into the
Operative Documents, considered as a single transaction, cannot be preserved,
the Operative Documents shall either be renegotiated or terminated.
SECTION 2.03 SURVIVAL. Except as may otherwise be specifically provided in
any agreement or instrument incorporating these Rules of Construction and
Documentary conventions, all covenants, agreements, representations and
warranties of the parties made in or pursuant to such agreement or instrument
shall survive the execution and delivery of such agreement or instrument and the
closing of the transactions contemplated thereby, notwithstanding any
investigation by or on behalf of any party. Further, the provisions set forth in
Article II hereof shall survive and shall apply with respect to any terminated
agreement which incorporated these Rules of Construction and Documentary
Conventions.
SECTION 2.04 ASSIGNMENT. Except as may otherwise be specifically provided
in any agreement or instrument incorporating these Rules of Construction and
Documentary Conventions, a party thereto shall not transfer, or grant or permit
to exist any Lien (except Permitted Liens) on, such agreement or instrument or
any of its rights thereunder (except for any transfer to an Affiliate or in
connection with a merger, consolidation or sale of all or substantially all the
assets or the outstanding securities of such party, which transfer shall not
require any consent of the other parties) without the prior written consent of
each other party thereto (which consent may be withheld in each such other
party's sole discretion), and any such purported transfer or Lien without such
consent shall be void.
SECTION 2.05 REMEDIES; FORCE MAJEURE. In no event will any party to
any agreement or instrument incorporating these Rules of Construction and
Documentary Conventions (except as may be otherwise expressly provided therein)
be liable to another party thereto for special, indirect, punitive or incidental
damages, lost profits, lost savings or any other consequential damages, even if
such party has been advised of the possibility of such damages, resulting from
the breach by it of any of its obligations thereunder or breach by it or any of
its Affiliates of any of their respective obligations under any other Operative
Document or from the use of any confidential or other information.
(a) Except as may otherwise be specifically provided in any agreement or
instrument incorporating these Rules of Construction and Documentary
Conventions, the rights and remedies of the parties under such agreement or
instrument are cumulative and are not exclusive of any rights or remedies which
the parties would otherwise have. Equitable relief, including the remedies of
specific performance and injunction, shall be available with respect to any
actual or attempted breach of such agreement or instrument; PROVIDED, HOWEVER,
in the absence of exigent circumstances,
10
the parties shall refrain from commencing any lawsuit or seeking judicial relief
in connection with such actual or attempted breach that is contemplated to be
addressed by the dispute resolution process set forth in Section 10.03 of the
Master Agreement until the parties have attempted to resolve the subject dispute
by following said dispute resolution process to its conclusion.
(b) If the due date for any amount required to be paid under an Operative
Document incorporating these Rules of Construction and Documentary Conventions
is not a Business Day, such amount shall be payable on the next succeeding
Business Day; provided that if payment cannot be made due to the existence of a
banking crisis or international payment embargo, such amount may be paid within
the following 30 days. If due to the occurrence of an act of God, any party is
prevented from providing training, technical assistance or other similar support
required to be provided to the Company pursuant to any Operative Document
incorporating these Rules of Construction and Documentary Conventions, such
party shall have an additional 30 day period to make alternative arrangements to
provide such support.
SECTION 2.06 PARTIES IN INTEREST; LIMITATION ON RIGHTS OF OTHERS. Any
agreement or instrument incorporating these Rules of Construction and
Documentary Conventions shall be binding upon and inure to the benefit of the
parties thereto and their permitted successors and assigns. Nothing in any such
agreement or instrument, whether express or implied, shall give or be construed
to give any Person (other than the parties thereto and their permitted
successors and assigns) any legal or equitable right, remedy or claim under or
in respect of such agreement or instrument, unless such Person is expressly
stated in such agreement or instrument to be entitled to any such right, remedy
or claim.
SECTION 2.07 TABLE OF CONTENTS; HEADINGS. The Table of Contents and Article
and Section headings to any agreement or instrument incorporating these Rules of
Construction and Documentary Conventions are for convenience of reference only
and shall not affect the construction of or be taken into consideration in
interpreting any such agreement or instrument.
SECTION 2.08 COUNTERPARTS; EFFECTIVENESS. Any agreement or instrument
incorporating these Rules of Construction and Documentary Conventions may be
executed by the parties thereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which counterparts shall
together constitute but one and the same contract. Any agreement or instrument
incorporating these Rules of Construction and Documentary Conventions shall not
become effective until one or more counterparts have been executed by each party
thereto and delivered to the other parties thereto.
SECTION 2.09 ENTIRE AGREEMENT. Any agreement or instrument incorporating
these Rules of Construction and Documentary Conventions, together with the other
Operative Documents and the Exhibits, Schedules, Appendices
11
and Attachments thereto, any agreement entered into simultaneously therewith,
the Initial Business Plan constitute the agreement of the parties to the
Operative Documents with respect to the subject matter thereof and supersede all
prior written and oral agreements and understandings with respect to such
subject matter.
SECTION 2.10 CONSTRUCTION. References in any agreement or instrument
incorporating these Rules of Construction and Documentary Conventions to any
gender include references to all genders, and references in any such agreement
or instrument to the singular include references to the plural and vice versa.
Unless the context otherwise requires, the term "party" when used in any such
agreement or instrument means a party to such agreement or instrument.
References in any such agreement or instrument to a party or other Person
include their respective permitted successors and assigns. The words "include",
"includes" and "including", when used in any such agreement or instrument, shall
be deemed to be followed by the phrase "without limitation". Unless the context
otherwise requires, references used in any such agreement or instrument to
Articles, Sections, Exhibits, Schedules, Appendices and Attachments shall be
deemed references to Articles and Sections of, and Exhibits, Schedules,
Appendices and Attachments to, such agreement or instrument. Unless the context
otherwise requires, the words "hereof", "hereby" and "herein" and words of
similar meaning when used in any such agreement or instrument refer to such
agreement or instrument in its entirety and not to any particular Article,
Section or provision of such agreement or instrument. The terms and conditions
of any such agreement or instrument shall be deemed to apply to any Subsidiary
of the Company as though such entity were the Company except where such
application would be manifestly inappropriate. Any reference to an Operative
Document shall include such Operative Document as amended or supplemented from
time to time in accordance with the provisions thereof.
Section 2.11 OFFICIAL LANGUAGE. The official language of any agreement
incorporating these Rules of Construction is the English language only, which
language shall be controlling in all respects, and all versions of any such
agreement in any other language shall not be binding on the parties thereto or
nor shall such other versions be admissible in any legal proceeding, including
arbitration, brought under such agreement. All communications and notices to be
made or given pursuant to any such agreement shall be in the English language.
Section 2.12 GOVERNING LAW. Any agreement incorporating these Rules of
Construction shall be governed and construed as to all matters including
validity, construction and performance by and under the substantive laws of the
State of California.
SECTION 2.13 WAIVER OF JURY TRIAL AND CERTAIN DAMAGES. Each party to any
Operative Document incorporating these Rules of Construction and Documentary
Conventions waives, to the fullest extent permitted by applicable law, (i) any
right it may have to a trial by jury in respect of any action, suit or
proceeding
12
arising out of or relating to any Operative Document and (ii) absent fraud, any
right it may have to receive damages or indemnification from any other party to
any Operative Document in respect of any act, omission or event relating to such
Operative Document or the transactions contemplated by the Operative Documents
based on any theory of liability for any special, indirect, consequential or
punitive damages. Each party to any such agreement or instrument (x) certifies
that no representative, agent or attorney of another party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and (y) acknowledges that it
has been induced to enter into such agreement or instrument by, among other
things, the mutual waivers and certifications set forth above in this Section
2.12
SECTION 2.14 ARBITRATION. Each party to any agreement or instrument
incorporating these Rules of Construction and Documentary Conventions hereby
agrees to adhere to the dispute resolution procedures described in Section 10.03
of the Master Agreement with respect to any disputes, grievances or actions
arising thereunder.
SECTION 2.15 NOTICES. All notices and other communications to be given to
any party under any agreement or instrument incorporating these Rules of
Construction and Documentary Conventions shall be in writing and any notice
shall be deemed received when delivered by hand, courier or overnight delivery
service, or by facsimile (if confirmed within two Business Days by delivery of a
copy by hand, courier or overnight delivery service), or five days after being
mailed by certified or registered mail, return receipt requested, with
appropriate postage prepaid and shall be directed to the address of such party
specified below (or at such other address as such party shall designate by like
notice):
(a) If to SanDisk:
SanDisk Corporation
000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: President and CEO
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With a copy to:
SanDisk Corporation
000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Vice President and General Counsel
(b) If to Toshiba:
Toshiba Corporation
Semiconductor Company
1-1 Xxxxxxxx 0-Xxxxx
Xxxxxx-Xx, Xxxxx 000-0000 Xxxxx
Telephone: 000 00 0 0000 0000
Facsimile: 011 81 3 5444 9339
Attention of President
With a copy to:
Toshiba Corporation
Semiconductor Company
Legal Affairs and Contracts Division
1-1 Xxxxxxxx 0-Xxxxx
Xxxxxx-Xx, Xxxxx 000-0000 Xxxxx
Telephone: 000-00-0-0000-0000
Facsimile: 011-81-3-5444-9342
Attention of General Manager
(c) If to the Company:
FlashVision, L.L.C.
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention of: President
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With a copy to:
SanDisk Corporation
000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Manager, NAND Division
And
Toshiba Corporation
Semiconductor Company
Legal Affairs and Contracts Division
1-1 Xxxxxxxx 0-Xxxxx
Xxxxxx-Xx, Xxxxx 000-0000 Xxxxx
Telephone: 000-00-0-0000-0000
Facsimile: 011-81-3-5444-9342
Attention of General Manager
(d) If to SENA:
Semiconductor of North America, Inc.
0000 Xxxxxx Xxx
X.X. Xxx 00000
Xxxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention of President
SECTION 2.16 DEFINITIONS. The definitions set forth in Article I of this
Appendix A shall apply to this Article II.
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