3D COLLABORATION AGREEMENT

EXHIBIT 10.1
FOIA Confidential Treatment Requested
Execution Version

This 3D COLLABORATION AGREEMENT, dated as of June ___, 2008, (“ Effective Date ”) is made and entered into by and between Toshiba Corporation, a Japanese corporation with a principal place of business at 1-1, Shibaura 1-chome, Minato-ku, Tokyo 105-8001, Japan (“ Toshiba ”) and SanDisk Corporation, a Delaware corporation, with a principal place of business at 601 McCarthy Boulevard, Milpitas, CA 95035, U. S. A. (“ SanDisk ”). Toshiba and SanDisk are each referred to as a “ Party ” and collectively as the “ Parties ”.

WHEREAS, Toshiba, SanDisk and SanDisk (Ireland) Limited have entered into the Flash Alliance Master Agreement, dated as of July 7, 2006 (“ FA Master Agreement ,” and together with the agreements contemplated thereby, the “ FA Agreements ”);

WHEREAS, pursuant to the FA Agreements, the Parties have an existing collaboration with respect to, among other things, the manufacturing of NAND Flash Memory Products;

WHEREAS, the Parties have entered into a memorandum of understanding dated as of February 19, 2008, to expand such collaboration through the construction by Toshiba of a new semiconductor fabrication facility in Japan (“ Fab 5 Facility ”) at which [***] * (“ Fab 5 MOU ”);

WHEREAS, the Parties intend to enter into various agreements implementing the terms of the Fab 5 MOU (“ Fab 5 Agreements ”), including a Fab 5 Master Agreement (“ Fab 5 Master Agreement ”);

[***]*

WHEREAS, the Parties desire to further expand their collaboration through a project for the joint development of and other technical collaboration on 3D Memory (as defined below) technology (“ 3D Project ”);

NOW, THEREFORE, the Parties agree as follows:

Article 1. DEFINITIONS

               Unless otherwise indicated, capitalized terms used in this Agreement without definition have the meanings given to them in the [***]* or in the [***]*.

          1.1 “ 3D CMOS ” shall mean [***]*.

          1.2 “ 3D Development ” shall mean all research and development related to 3D Memory.

          1.3 “ 3D Memory ” shall mean a memory technology [***]*.

          1.4 “ 3D Memory Products ” shall mean: [***] * . All 3D Memory Products are governed by this Agreement, unless otherwise mutually agreed in writing by the Parties.

          1.5 “ 3D R/W Project ” shall mean the joint development of 3D Memory technology related to R/W (as defined below).

          1.6 “ Agreement ” shall mean this 3D Collaboration Agreement together with any Exhibits, Schedules, Appendices and Attachments hereto.

          1.7 “ Authorized Recipients ” is defined in Section 10.3.

          1.8 “ Basic Process Technology ” shall mean all unit process steps that are not 3D Memory specific including, but not limited to, resist ashing, wet clean, metal depositions, photo lithography steps, oxide depositions or any other unit process step that can be adapted for use by or with 3D Memory Products.

          1.9 “ CMOS Logic ” shall mean [***]*, as discussed and mutually agreed, in writing, by the Parties as part of the 3D Project.

          1.10 “ Confidential Information ” is defined in Section 10.1.

          1.11 “ Disclosing Party ” is defined in Section 10.2.

          1.12 “ Excluded Memory Product ” is defined in Section 2.6.

          1.13 “ First Anniversary Date ” is defined in Exhibit A .

          1.14 “ ICC ” is defined in Section 12.6.

          1.15 “ Jointly Developed Inventions ” shall mean inventions jointly made by the employees of Toshiba and SanDisk or their respective Subsidiaries during the performance of joint research and development relating to the 3D Project.

          1.16 “ Jointly Developed Patents ” shall mean Patents (excluding design patents) that arise out of the Jointly Developed Inventions.

          1.17 “ Memory Integrated Circuit ” shall mean [***]*.

          1.18 “ Net Sales Price ” shall mean

               (a) For sales or transfers of 3D Memory Products to any person or entity that is [***]*; or

               (b) For sales or transfers of 3D Memory Products to any person or entity that is [***]*.

          1.19 “ [***]* Intellectual Property Rights ” shall mean [***]*.

          1.20 “ OTP ” shall mean [***]*.

          1.21 “ Patent Family ” means all worldwide patents and patent applications, including all continuations, continuations-in-part, divisions, reexaminations, and reissues thereof, that claim priority to one or more common patent applications.

          1.22 “ Patents ” shall mean all U.S. and foreign rights in and to all patents, patent applications and utility models, including all divisions, substitutions, continuations, continuation-in-part applications, and reissues, re-examinations and extensions thereof.

          1.23 “ R/W ” shall mean a 3D Memory Product on which data can be written, erased and rewritten.

          1.24 “ R/W Termination Option ” is defined in Section 6.1(c).

          1.25 “ Receiving Party ” is defined in Section 10.2.

          1.26 “ Residuals ” shall mean that Confidential Information which may be unintentionally retained in the memories of personnel of either Party who have been assigned by such Party to the 3D Project and who have had rightful access to the other Party’s confidential information including ideas, concepts, know-how or techniques contained therein.

          1.27 “ SanDisk Background IP ” is defined in Section 3.2.

          1.28 “ SanDisk Contributions ” is defined in Section 2.1.

          1.29 “ Solely Developed Inventions ” shall mean inventions made solely by the employees of either Party or such Party’s Subsidiaries during the performance of joint research and development among the Parties relating to the 3D Project.

          1.30 “ Subsidiaries ” shall mean any corporation, company or other entity (other than any joint venture formed by the Parties so long as such entity remains a joint venture):

               (a) more than fifty percent (50%) of whose outstanding shares or stocks entitled to vote for the election of directors (other than any shares or stocks whose voting rights are subject to restriction) is now or hereafter owned or controlled by SanDisk or Toshiba, as applicable, directly or indirectly, but such corporation, company or other entity shall be deemed to be a Subsidiary only so long as such ownership or control exists; or

               (b) which does not have outstanding shares or securities, as may be the case in a partnership, joint venture or unincorporated association, but more than fifty percent (50%) of whose ownership interest representing the right to make the decisions for such corporation, company or other entity is now or hereafter, owned or controlled, directly or indirectly, by SanDisk or Toshiba, as applicable , but such corporation, company or other entity shall be deemed to be a Subsidiary only so long as such ownership or control exists. SanDisk 3D LLC, a Delaware limited liability company, with a principal place of business at 601 McCarthy Boulevard, Milpitas, CA 95035, U.S.A., which owns or controls all intellectual property rights that had been owned or controlled by Matrix Semiconductor, Inc., as of the date of its acquisition by SanDisk, shall be considered SanDisk’s Subsidiary.

          1.31 “ Toshiba Background IP ” is defined in Section 3.1.

          1.32 “ Toshiba Contributions ” is defined in Section 2.2.

Article 2. CONTRIBUTIONS, DEVELOPMENT & PRODUCTION

          2.1 SanDisk Contributions . SanDisk will disclose all of its existing and future (subject to Section 2.3 below) knowledge, know how and research (to the extent permitted under applicable contracts) related to 3D Memory, 3D Memory Products and 3D CMOS for use by the Parties in the Parties’ applicable joint venture(s) or other facilities as permitted according to [***] * and the 3D Project (collectively, “ SanDisk Contributions ”) part of which details are described in Exhibit B attached hereto.

          2.2 Toshiba Contributions . Toshiba will disclose all of its existing and future (subject to Section 2.3 below) knowledge, know how and research (to the extent permitted under applicable contracts) related to 3D Memory, 3D Memory Products and 3D CMOS, including, but not limited to, Basic Process Technology, for use by the Parties in the Parties’ applicable joint venture(s) or other facilities as permitted according to [***]* and in the 3D Project (collectively, “ Toshiba Contributions ”). If mutually agreed by the Parties, Toshiba will further contribute CMOS Logic to [***]* in order for the Parties to make such CMOS Logic available to [***]*, provided , however, that compensation to Toshiba for such contribution shall be subject to mutual agreement between the Parties to be made at the time of its contribution, [***]*. At the time of such disclosure of the CMOS Logic by Toshiba, any such contribution shall be deemed to be a Toshiba Contribution.

          2.3 Separately Developed Contributions . Each Party will disclose all knowledge, know how and research (to the extent permitted under applicable contracts) related to 3D Memory Products for use by the Parties [***]* and in the 3D Project even if such knowledge, know how and research was developed without the other Party, provided , however, [***]*.

          2.4 Development of 3D Memory and 3D Memory Products .

               (a) The Parties agree that equal partnership is important and the Parties will form teams and begin work on the development of 3D Memory and 3D Memory Products (except for OTP) immediately in accordance with the guidelines set forth in the [***]*. [***]* the roadmap of the 3D Project and will be responsible for the Parties’ implementation and execution of such roadmap.

               (b) The [***]* to start immediately in accordance with the guidelines set forth [***]*.

               (c) The Parties will establish an optimized 3D CMOS technology in the [***]*, as mutually agreed by the Parties.

               (d) Unless otherwise mutually agreed by the Parties, all development work performed to exclusively benefit [***]* product with a [***]* will each be done by SanDisk [***]*. SanDisk will use reasonable efforts not to interfere with the standard operation of the other production lines at the [***]* and Toshiba will reasonably assist with the above, with process and module integration, and with supply of Basic Process

Technology that will be applied to 3D Memory and 3D Memory Products and will use commercially reasonable efforts to support [***] * .

          2.5 Non-3D Memory .

               (a) With respect to 3D memory technology not within the definition of 3D Memory, each Party shall offer such technology to the Parties’ joint ventures, provided that any compensation to the other Party shall be subject to mutual agreement between the Parties.

               (b) When one Party offers any specific 3D Memory for joint development and the other Party declines such offer after good faith discussion, then such 3D Memory shall no longer be deemed 3D Memory, and products based thereon shall not be deemed a 3D Memory Product.

          2.6 Production of 3D Memory Products . The Parties agree that all [***]* or other SanDisk facilities, [***]*, except as otherwise mutually agreed by the Parties); provided , however, that [***]*. The first priority for production of these products (except for OTP) shall be on an equal basis. If one Party is not willing to support production of such products on an equal basis within the joint ventures, then the other Party [***]* unless otherwise provided for in the [***]*; provided , that if the Parties after good faith discussion decide to not jointly manufacture any specific 3D Memory Products (an “ Excluded Memory Product ”), the [***]* will set forth further detailed provisions which will include any applicable terms and conditions regarding the production of such Excluded Memory Product, including, but not limited to, provisions relating [***]*, each as applicable.

Article 3. OWNERSHIP

          3.1 Toshiba Background IP . During and after the term of this Agreement, Toshiba will exclusively retain all right, title and interest in and to all intellectual property rights created, conceived, owned or developed by or for Toshiba and its Subsidiaries: (a) on or before the Effective Date, (b) which result from activities that are independent from but concurrent with the 3D Project during the term of the Agreement, or (c) which result from Toshiba’s Solely Developed Inventions (collectively, “ Toshiba Background IP ”).

          3.2 SanDisk Background IP . During and after the term of this Agreement, SanDisk will exclusively retain all right, title and interest in and to all intellectual property rights created, conceived, owned or developed by or for SanDisk and its Subsidiaries: (a) on or before the Effective Date, (b) which result from activities that are independent from but concurrent with the 3D Project during the term of the Agreement, or (c) which result from SanDisk’s Solely Developed Inventions (collectively, “ SanDisk Background IP ”).

          3.3 Jointly Developed IP .

               (a) Any right, title and interest in, to and under Jointly Developed Inventions and Jointly Developed Patents shall be jointly owned by Toshiba and SanDisk. Both Parties shall promptly agree on which of them shall file and prosecute the first patent application and in which countries corresponding applications shall be filed and by whom. All expenses incurred in obtaining and maintaining such patents shall be equally shared by

the Parties; provided that if one Party elects not to seek or maintain such patents in any particular country or not to share equally in the expense thereof, the other Party shall have the right to seek or maintain such patents in said country at its own expense and shall have full control over the prosecution and maintenance thereof even though title to any patent issuing thereon shall be joint. The Party electing not 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.

               (b) Each Party shall be free to use such Jointly Developed Inventions and Jointly Developed Patents for any purpose and, each Party shall have the right to grant non-exclusive licenses to any [***] * ; and, provided further, that [***]*.

Article 4. LICENSES

          4.1 Toshiba 3D License . Toshiba hereby grants to SanDisk and its Subsidiaries a non-exclusive, non-sublicensable, non-transferable, world wide, [***]* license, under the [***]* Intellectual Property Rights of Toshiba and its Subsidiaries, to use Toshiba’s Contributions to develop, have developed, make, have made, use, sell, offer for sale, import and otherwise dispose of any of SanDisk’s 3D Memory Products, any other SanDisk semiconductor products and SanDisk integrated circuit memory system containing 3D Memory Products.

          4.2 SanDisk 3D License . Subject to Toshiba’s payment as set forth in Article 6 herein, SanDisk hereby grants to Toshiba and its Subsidiaries a non-exclusive, non-sublicensable, non-transferable, world wide, [***]* (except as otherwise set forth herein) license, under the [***]* Intellectual Property Rights of SanDisk and its Subsidiaries, to use SanDisk’s Contributions to develop, have developed, make, have made, use, sell, offer for sale, import and otherwise dispose of any of Toshiba’s 3D Memory Products, any other Toshiba semiconductor products and Toshiba integrated circuit memory system containing 3D Memory Products.

          4.3 Notwithstanding anything to the contrary in Section 4.1 and 4.2, neither Party shall disclose the other Party’s contributions described in Sections 2.1 and 2.2, respectively, to any third party without the consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed, and neither Party shall disclose [***]* Intellectual Property Rights to any third party without the consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed, provided , however, that such latter prohibition shall not apply to SanDisk if Toshiba exercises its R/W Termination Option hereunder.

          4.4 Subject to each Party’s obligations under the provisions of Articles 3, 8, 9 and 12, each Party shall be free to use, improve or modify without additional compensation to the other Party, the Residuals, including the use, improvement or modification of such Residuals in the development and manufacture of such Party’s products; provided that this Section, by itself, shall not be deemed to grant to such Party any rights or licenses under any Patents of the other Party nor shall this Section operate to waive such Party’s confidentiality obligations under Article 10. In no event shall such either Party or its Personnel publish or disseminate said Residuals to any third party.

          4.5 License Restrictions .

               (a) Notwithstanding anything to the contrary herein, no license [***] * granted hereunder includes the right for [***]* to have developed, make, have made, use, sell, offer for sale, import or otherwise exploit any:

                    (i) [***]*

                    (ii) [***]*.

Article 5. IP LITIGATION

          5.1 General . If one Party is sued, but not the other, in litigation relating to a claim by a third party that 3D Memory infringes or 3D Memory Products infringe any patent owned by such third party, the Party that is the defendant in the litigation shall take the lead on the defense and the Party not sued shall reasonably assist such Party named as the defendant.

          5.2 Jointly Developed IP; Defense . Toshiba and SanDisk will jointly defend against claims for infringement of third party patents to the extent arising from Jointly Developed Inventions provided that each Party shall have a responsibility to resolve the issue at its own discretion, subject to the consent of the other, which consent shall not be unreasonably withheld, conditioned or delayed. The Parties shall discuss in good faith the respective role of each Party for such joint defense (including who would take the lead on defense) on a case-by-case basis considering various factors such as jurisdiction where litigation has been filed.

          5.3 Jointly Developed IP; Enforcement . [***]*.  In the event that either party desires to litigate such infringement and the other party refuses or fails to do so, [***]*, the party desiri