Exhibit 10.8

 

AMENDED AND RESTATED

INFORMATION TECHNOLOGY SERVICES AGREEMENT

 

THIS AMENDED AND RESTATED INFORMATION TECHNOLOGY SERVICES AGREEMENT (this
“Agreement”), is made and entered into as of December 21, 2005, (the “Amendment
Date”) by and between SPANSION INC., a Delaware corporation (“Spansion”), on
behalf of itself and its Affiliates, and FUJITSU LIMITED, a Japanese corporation
(“Fujitsu”), on behalf of itself and its Affiliates. Spansion and Fujitsu are
hereinafter collectively referred to as the “Parties” and individually as a
“Party.”

 

RECITALS

 

WHEREAS, in connection with the creation of Spansion LLC, Spansion Inc.’s
predecessor, the Parties executed an Information Technology Services Agreement
dated as of June 30, 2003 (the “Effective Date”); and

 

WHEREAS, the Parties hereby desire to amend and restate that Information
Technology Services Agreement.

 

NOW, THEREFORE, in consideration of the mutual representations, covenants and
other terms and conditions contained herein, the Parties hereby amend and
restate that Information Technology Services Agreement and agree as follows:

 

1. DEFINITIONS

 

1.1 Definitions. The defined terms used in this Agreement shall have the
meanings set forth in Exhibit 1 or as defined in the text below.

 

1.2 Interpretation.

 

(a) Certain Terms. The words “hereof,” “herein,” “hereunder” and similar words
refer to this Agreement as a whole and not to any particular provision of this
Agreement. The term “including” is not limited and means “including without
limitation.”

 

(b) Section References; Titles and Subtitles. Unless otherwise noted, all
references to Sections, Schedules and Exhibits herein are to Sections, Schedules
and Exhibits of this Agreement. The titles, captions and headings of this
Agreement are inserted for convenience of reference only and are not intended to
be a part of or to affect the meaning or interpretation of this Agreement.

 

(c) References to Persons, Agreements and Statutes. Unless otherwise expressly
provided herein, (i) references to a person or Entity include its successors and
permitted assigns, (ii) references to agreements (including this Agreement) and
other contractual instruments shall be deemed to include all subsequent
amendments, restatements and other modifications thereto or supplements thereof
and (iii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such statute or regulation. In
addition, any references to

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“either Party” and/or the “other Party,” etc. shall be deemed to refer to
Fujitsu and Spansion, respectively, as the context indicates.

 

2. TERM

 

2.1 Term. The initial term of this Agreement shall commence on the Effective
Date and continue until 23:59 (Pacific Daylight Time) on June 30, 2007, or such
earlier date upon which this Agreement may be terminated in accordance with its
terms (the “Initial Term”).

 

2.2 Extension. The Parties may extend the Initial Term of this Agreement by
mutual written agreement; each such agreed upon extension period shall be
referred to as an “Extension Period.”

 

3. MANAGEMENT, COMMUNICATION, INFORMATION AND ESCALATION RIGHTS

 

3.1 In General. Spansion shall have day-to-day management control over its
receipt of the Services and its implementation of Systems. Subject to the terms
of this Agreement, this will include decisions regarding (a) its information
technology budget, (b) the level of Services it requires, (c) the Systems it
chooses to implement, and (d) the performance of its service providers,
including its response to failures by Fujitsu to provide Services in accordance
with the Service Levels and any material breach by Fujitsu of its obligations
under this Agreement. To administer its receipt and use of these Services and
Systems, Spansion will employ a Spansion Services Manager as described below and
will consult with the Fujitsu Services Advisor and AMD Services Advisor in
Spansion’s reasonable judgment.

 

3.2 Spansion Services Manager. Spansion shall employ an individual reasonably
knowledgeable about the provision of information technology services similar to
those provided by Fujitsu under this Agreement (the “Spansion Services
Manager”). The Spansion Services Manager shall (a) have overall responsibility
for managing and coordinating the performance of Spansion’s obligations under
this Agreement and for monitoring the performance of obligations by Fujitsu
under this Agreement, (b) be authorized to act for and on behalf of Spansion
with respect to all matters relating to this Agreement, and (c) shall be the
primary contact with the Fujitsu Services Advisor and AMD Services Advisor. The
Spansion Services Manager will report to and be supervised by a member of the
senior management of Spansion.

 

3.3 Fujitsu Services Advisor. Fujitsu shall appoint at Fujitsu’s expense an
individual (the “Fujitsu Services Advisor”) who will serve as the primary
Fujitsu representative under this Agreement. The Fujitsu Services Advisor shall
(a) have overall responsibility for managing and coordinating the performance of
Fujitsu’s obligations under this Agreement and (b) be authorized to act for and
on behalf of Fujitsu with respect to all matters relating to this Agreement, and
(c) shall be the primary contact with the Spansion Services Manager and AMD
Services Advisor.

 

3.4 AMD Services Advisor. AMD shall appoint at AMD’s expense an individual (the
“AMD Services Advisor”) who will serve as the primary AMD representative to
Spansion regarding Spansion’s receipt of the Services. The AMD Services Advisor
will serve in an advisory capacity to Spansion only and will not have
independent veto rights or other day-to-day decision-making authority over
Spansion’s receipt, use and oversight of the Services. The AMD

 

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Services Advisor will act in the best interests of Spansion, not AMD. Spansion
shall make available to the AMD Services Advisor office space and facilities
upon the AMD Services Advisor’s reasonable request as and when reasonably
required by the AMD Services Advisor to enable the AMD Services Advisor to
perform his or her responsibilities hereunder. In the event that AMD’s Aggregate
Ownership Interest falls below ten percent (10%) and AMD no longer provides
services to Spansion that are similar to the Services, either Spansion or AMD
may, but shall not be required to, by written notice to the other and Fujitsu,
terminate the role of the AMD Services Advisor, and, upon such termination, the
AMD Services Advisor shall have no further rights or obligations hereunder.

 

3.5 Information Exchange and Information Rights. Spansion shall keep Fujitsu
informed about those aspects of Spansion’s business that could reasonably be
expected to have an effect on the demand for, or provision of, the Services.
Fujitsu will provide to the AMD Services Advisor copies of all reports and other
written information relating specifically to the Services that Fujitsu provides
Spansion herein, at the same time Fujitsu provides such reports and information
to Spansion, including a copy of the monthly service reports provided Spansion
under Section 4.8. At any time, upon the AMD Services Advisor’s reasonable
request, the Spansion Services Manager shall provide the AMD Services Advisor
additional information regarding the performance of the Services and the
associated Fees. Fujitsu and Spansion, through the Fujitsu Services Advisor and
the Spansion Services Manager, will give notice, and otherwise keep the AMD
Services Advisor informed, of all proposals and discussions between the Spansion
Services Manager and the Fujitsu Services Advisor, or their respective
supervisors, relating to material aspects of this Agreement and the provision of
the Services herein, including all Changes proposed under the Change Control
Procedures set forth in Section 3.9, any Special Projects proposed pursuant to
Section 5, all audits conducted by Spansion, and all budget meetings relating to
the Services or Systems. Such notice shall be given by the Parties promptly upon
initiation of such discussions. In addition, Fujitsu and Spansion will, upon the
AMD Service Advisor’s request and subject to applicable confidentiality
restrictions, grant access to the AMD Service Advisor to any meeting, whether
telephonic or in-person, between the Spansion Services Manager and the Fujitsu
Services Advisor regarding performance of the Services, the Fees, and any
proposed Special Projects or Changes.

 

3.6 Services Advisor Escalation Rights. If at any time, the AMD Services Advisor
believes in good faith that (a) the Services being provided to Spansion under
this Agreement are not being provided in accordance with the applicable Service
Levels, (b) Fujitsu is in material breach under this Agreement, (c) an audit
pursuant to Section 10.12 should be conducted, or (d) Spansion is not being
charged fairly for the Services it is receiving under this Agreement, then the
AMD Services Advisor will notify the Spansion Services Manager in writing. If
after a reasonable period of time the AMD Services Advisor does not believe that
the concern raised has been adequately addressed, the AMD Services Advisor shall
be entitled to notify Spansion’s Board of Directors (the “Board of Directors”)
of the AMD Service Advisor’s concerns. Any such notice shall be in writing and
shall be provided to all Board members simultaneously, with a copy also provided
simultaneously to Spansion’s chief financial officer and the Fujitsu Services
Advisor. The Board of Directors shall consider the AMD Service Advisor’s
concerns in good faith and may take any action it deems reasonable in the
circumstances.

 

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3.7 Contract Amendments.

 

(a) Spansion and Fujitsu may only amend this Agreement upon the approval of the
Board of Directors. The Board of Directors may delegate its decision-making
authority to Spansion management as it deems appropriate; provided, however,
that any Special Project, or Systems or Services purchase of greater than Five
Hundred Thousand Dollars ($500,000) payable in any Contract Year will require
specific approval from the Board of Directors.

 

(b) For so long as AMD maintains at least a ten percent (10%) Aggregate
Ownership Interest, Fujitsu and Spansion may not amend this Agreement without
the prior written consent of AMD (such consent not to be unreasonably
conditioned, delayed or withheld) to the extent an amendment: (i) reduces the
rights of the AMD Services Advisor; (ii) reduces AMD’s right to consent to
amendments set forth in this Section; (iii) establishes a basis for charging
Spansion for the Services which is different than Fujitsu’s reasonable, good
faith estimates of actual costs plus five percent (5%), as set forth in Section
10.7, or materially alters the cost allocation methodologies described in
Section 10.7; (iv) eliminates or reduces Fujitsu’s obligation to treat Spansion
on par with other Fujitsu divisions and Affiliates (taking into account that
this Agreement provides for a cost plus allocation budgeting structure that may
not apply to other Fujitsu divisions or Affiliates); or (v) materially affects
Spansion’s rights under this Agreement (e.g., eliminates the requirement that
all Changes require Spansion’s consent). Notwithstanding any of the foregoing,
changes to Fees or Services resulting from the Change Order Procedures, the
Annual Budget Process or the Fee reconciliation process described in Section
10.9 do not constitute amendments of the Agreement for purposes of this Section
3.7.

 

3.8 Approvals. Spansion shall reasonably cooperate with Fujitsu by making
available, as requested by Fujitsu, management decisions, information, approvals
or disapprovals, and acceptances or rejections in a reasonably timely manner so
that Fujitsu may fulfill its obligations under this Agreement.

 

3.9 Change Control Procedures. The Parties shall use the following procedures
(the “Change Control Procedures”) to implement Changes.

 

(a) General.

 

(i) Changes. Changes shall be implemented only by mutual agreement of the
Parties through these Change Control Procedures, except as may be necessary on
an emergency, temporary basis to maintain the continuity of the Services. The
Parties acknowledge and agree that the implementation of a Change does not
necessarily require an increase in the Fees or other fees payable by Spansion or
a reduction in the scope of Services or in Service Levels provided hereunder,
and that any change in the Fees or other amounts payable by Spansion as a result
of a Change will be an adjustment in accordance with the provisions of Section
10. All decisions regarding Changes are subject to the approval by the Board of
Directors, which may delegate its decision-making authority to Spansion
management as it deems appropriate. The Parties acknowledge and agree that not
all modifications to the Services or Systems may constitute Changes; as part of
the routine operation of Spansion and Fujitsu, modifications that are not
material or significant, as determined by Fujitsu in its reasonable judgment,
may be conducted without recourse to the Change Control Procedures; provided
that

 

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the Spansion Services Manager is notified — on a regular basis consistent with
Fujitsu’s internal processes — of the modifications being implemented on
Spansion’s behalf or that affect Spansion Systems, with a copy of such report
provided to the AMD Services Advisor.

 

(ii) Schedule. Unless otherwise agreed by Spansion, with respect to all Changes,
Fujitsu shall (a) schedule Changes so as not to unreasonably interrupt
Spansion’s business operations, other than those Changes made on a emergency
basis to maintain the continuity of the Services, (b) prepare and deliver to
Spansion each month a rolling schedule for ongoing and planned agreed upon
Changes for the next thirty (30) day period, and (c) monitor the status of
Changes against the applicable schedule. Fujitsu shall implement and maintain a
continuously updated, electronic log of such emergency Changes that will be
accessible to the Spansion Services Manager and the AMD Services Advisor at all
times.

 

(iii) Meetings. The Fujitsu Services Advisor and the Spansion Services Manager
shall meet on a mutually agreed schedule (no less frequently than each quarter)
for the purpose of reviewing Change requests submitted by either Party in
accordance with these Change Control Procedures. The Spansion Services Manager
will provide the AMD Services Advisor written notice of this meeting and the AMD
Services Advisor may attend.

 

(b) Requests for Changes. Requests for Changes shall be submitted for review in
accordance with the Change Control Procedures, and shall include a reasonably
detailed description of the requested Change together with the basis for such
Change. All requests for Changes by Spansion shall be communicated to Fujitsu
through the Spansion Services Manager, his or her supervisor, or his or her
authorized designee.

 

(i) Changes Initiated by Spansion. Within ten (10) business days after Fujitsu
receives a request from Spansion for a Change, either Fujitsu or a joint project
team working on the Service to be impacted, as appropriate, shall prepare and
provide to Spansion an initial written proposal for the Change (a “Change
Proposal”), which proposal will include Fujitsu’s initial proposals regarding
(A) the Services and the applicable schedule for performing the Services,
including but not limited to Spansion’s related obligations, to effect the
Change, (B) the applicable Service Levels resulting from the Change, (C) the
resources required to perform Services effecting the Change and resulting from
the Change, (D) the Fees for Services, and (E) any additional Systems or areas
that are reasonably likely to be impacted by the proposed Change. The Change
Proposal shall also contain a description of any other anticipated costs that
Spansion will incur as a result of the Change that it would otherwise not have
incurred. Fujitsu will also indicate the areas of the Change Proposal where
additional analysis may be required to complete the Change Proposal. On a
schedule to be agreed upon by the Parties in the circumstances, but presumed not
to exceed thirty (30) days after receipt of Spansion’s request, Fujitsu will
deliver to Spansion a completed Change Proposal. Within ten (10) business days
after receiving such Change Proposal, Spansion shall either approve the Change
Proposal, notify Fujitsu that Spansion desires to discuss the Change Proposal
further, or withdraw the request for such Change. Spansion’s failure to approve
the Change Proposal or notify Fujitsu that Spansion desires to discuss the
Change Proposal further within this ten (10) business day period shall be deemed
a rejection of the Change Proposal, and the Change shall not be implemented.

 

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(ii) Changes Initiated by Fujitsu. Concurrent with the submission of a request
for a Change by Fujitsu, either Fujitsu or a joint project team working on the
impacted Service, as appropriate, shall provide to Spansion a Change Proposal
containing the information specified in subparagraph (i) above. Within ten (10)
business days after receiving such proposal, Spansion shall either approve the
Change Proposal, notify Fujitsu that Spansion desires to discuss the Change
Proposal further, or reject the requested Change. Spansion’s failure to approve
the Change Proposal or notify Fujitsu that Spansion desires to discuss the
Change Proposal further within this ten (10) business day period shall be deemed
a rejection of such request, and the Change shall not be implemented. If
Spansion rejects the request or does not respond to the request, then the
Fujitsu Services Advisor may notify all members of the Board of Directors by
simultaneous notice, with a copy to the Spansion chief financial officer (or
other officer who supervises the Spansion Services Manager, if applicable) and
to the AMD Services Advisor, of the rejection of the Change Proposal and may
request that the Board of Directors determine whether the Change should be made
by or for Spansion.

 

(c) Further Discussion of Changes. If within ten (10) business days after
receipt of a Change Proposal, Spansion notifies Fujitsu that Spansion desires to
discuss the proposed Change further, the Spansion Services Manager and Fujitsu
Services Advisor will promptly consider the Change Proposal in person or by
telephone and will attempt in good faith to develop a mutually acceptable Change
Proposal. The Spansion Services Manager will notify the AMD Services Advisor of
the proposed meeting and the AMD Services Advisor may attend any such meeting.

 

(d) Outside Bids. Notwithstanding any discussions regarding Change Proposals,
Spansion shall have the right to request, evaluate and accept proposals from
third parties regarding Changes; provided that such Changes do not relate to
Fujitsu-proprietary Software or Systems, do not affect the provision of
Services, and would not result in the breach of an obligation that Fujitsu may
have with a third party. Spansion will notify Fujitsu when Spansion is
considering seeking proposals from third parties regarding Changes and provide
Fujitsu the first opportunity to perform the Change. In the event Fujitsu
rejects such Change Proposal, and the Parties, after reasonable negotiations,
fail to come to an agreement in connection therewith, Spansion shall have the
right to escalate the issue to the Board of Directors.

 

(e) Implementation of Changes. All Changes are subject to the written approval
of the Parties. Only following receipt of each Party’s written approval may
Fujitsu begin to implement the approved Change. Costs and fees for performance
of additional work to implement the Change, if any, will be invoiced and paid in
accordance with the schedule set forth in the agreed-upon Change Proposal;
however, any Fee adjustments resulting from the Change will be implemented as
part of the quarterly budget reconciliation process set forth in Section 10.9.

 

(f) Emergency Changes. If a Service Level failure, reasonable safety concern,
Governmental Authority or change in Applicable Law, requires an immediate Change
to a System or Service, then Fujitsu may implement such Change immediately upon
notice to Spansion, with a copy to the AMD Services Advisor. Any change in Fees,
any System purchases for which Fujitsu seeks reimbursement from Spansion, or any
long-term, material

 

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degradation in Service Levels resulting from such Change, unless such
degradation is unavoidably required in the circumstances (in which event Fujitsu
shall use all reasonable efforts to mitigate the impact of such degradation),
shall be subject to the Change Control Procedures.

 

4. SERVICES

 

4.1 Services; Parity. Fujitsu, either itself or through its Affiliates or
subcontractors (subject to Section 4.6), shall provide the Systems and perform
the services, functions, and responsibilities for Spansion identified in Exhibit
4.1 (the “Services”). Exhibit 4.1 may be updated by the Parties from time to
time upon mutual agreement pursuant to the Change Control Procedures or the
annual review of the Spansion IT budget and the Services described in Section
10.8 (the “Annual Budget Process”). Fujitsu will provide Spansion the Services
under terms (including those related to charges, cost allocation, service levels
and technology) that are at least as favorable as those it provides any other
Fujitsu business unit, division or Fujitsu Affiliate receiving similar services
from Fujitsu (or a Fujitsu subcontractor), subject to any deviations agreed to
by the Parties to address Spansion’s specific requirements as communicated to
Fujitsu and taking into account that this Agreement provides for a cost plus
allocation budgeting structure that may not apply to other Fujitsu divisions or
Affiliates. The Services (including any new Services or Systems added pursuant
to mutual agreement by the Parties) will evolve and be supplemented, modified,
enhanced or replaced, reduced or eliminated over time as agreed upon by the
Parties pursuant to the Change Control Procedures or as part of the Annual
Budget Process. Fees are subject to the quarterly budget reconciliation process
described in Section 10.9.

 

4.2 Compliance with Fujitsu Infrastructure. Exhibit 4.2 contains a list of any
necessary telecommunications systems, software and hardware requirements,
including existing and currently-planned and approved upgrades to any of the
foregoing, that must be implemented in any Spansion Systems to make such systems
compatible with the Fujitsu Infrastructure as of the Effective Date (to the
extent such compatibility is necessary for Spansion to receive the Services).
Any implementations required under Exhibit 4.2 to the extent necessary for
Spansion to receive the Services shall be provided at Spansion’s cost (including
Fujitsu’s mark-up as applicable) and such costs shall be set forth in Exhibit 10
hereto. Spansion acknowledges that for it to receive the benefits intended under
this Agreement, including lower costs, it must undertake such implementations.
Once such implementations have been completed, any unilateral change by Spansion
of its systems which results in a material failure to be compliant with the
Fujitsu Infrastructure will excuse any Fujitsu failure to perform the affected
Service, solely to the extent such failure is caused by such non-compliance,
until Spansion restores its compliance, and may result in additional charges to
Spansion for Fujitsu to assist Spansion’s return to compliance. Fujitsu agrees
to notify Spansion upon Fujitsu’s discovery of any such non-compliance and will
continue to provide all Services to the extent unaffected by such
non-compliance. Fujitsu will provide Spansion advance notice of any Fujitsu
Infrastructure changes, including technology upgrades, that may require Spansion
to make changes to its own technical architecture.

 

4.3 Governmental Approvals. Fujitsu shall obtain and maintain all Governmental
Approvals required for Fujitsu to deliver the Services under this Agreement.
Spansion shall obtain and maintain all Governmental Approvals required for
Spansion to use the Services under

 

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this Agreement. Upon request by either Party, the other Party shall provide to
the requesting Party reasonable cooperation and assistance in obtaining
Governmental Approvals hereunder.

 

4.4 Changes in Law. If either Party becomes aware of any changes in Law that
relate to Fujitsu’s delivery of the Services or Spansion’s use of the Services,
then such Party will notify the other Party of such changes in Law. With respect
to any changes related to Fujitsu’s delivery of Services, Fujitsu and Spansion
shall work together pursuant to the Change Control Procedures to identify the
impact of such changes on Fujitsu’s delivery of the Services, and any changes in
the fees charged to Spansion, as a result and shall work together to implement
any necessary modifications to the Services prior to the deadline imposed by the
Governmental Authority having jurisdiction for such requirement or change.
Fujitsu will use reasonable efforts to minimize the incremental cost to Spansion
of compliance with such Laws.

 

4.5 Compliance With Laws. Fujitsu shall comply with all Laws governing the
provision of the Services and the performance of its obligations, including
identifying and procuring permits, certificates, approvals and inspections
required under such Laws. If a charge of non-compliance by Fujitsu with any such
Laws occurs, Fujitsu shall promptly notify Spansion of such charge in writing
and Fujitsu shall promptly remedy such non-compliance in accordance with Law.

 

4.6 Subcontractors. Spansion acknowledges that Fujitsu may outsource to a third
party or third parties the performance of some or all of the Services that
Fujitsu is obligated to provide under this Agreement; provided however, that in
the event such outsourcing will lead to any Change in such Services, such
outsourcing shall be subject to the Change Control Procedures. Nothing in this
Agreement shall be construed as requiring Fujitsu to perform any Services
outside of Japan and to the extent that Services will be performed outside
Japan, Fujitsu may engage an Affiliate, subsidiary or subcontractor to perform
such Services (subject to the Change Control Procedures in accordance with the
foregoing). No subcontracting shall release Fujitsu from its responsibility for
its obligations under this Agreement. Fujitsu shall be responsible for the work
and activities of each of the Fujitsu Agents, including compliance with the
terms of this Agreement. Fujitsu shall be responsible for all payments to its
subcontractors unless the Parties agree that Spansion will pay directly to a
Fujitsu Affiliate providing Services to Spansion.

 

4.7 Spansion Agents. Fujitsu will coordinate and cooperate in good faith with
Spansion Agents hired by Spansion from time to time to the extent reasonably
required by Spansion and with AMD to the extent that AMD supplies similar or
complementary services to Spansion. Fujitsu will promptly notify Spansion if an
AMD or any Spansion Agent act or omission will cause, or has caused, a problem
or delay in providing the Services. Fujitsu will be excused from failure to meet
a Service Level or otherwise perform its obligations under this Agreement only
to the extent that a failure to meet such Service Level or otherwise perform its
obligations was caused by the interference of a Spansion Agent or AMD; provided
such interference was not at the direction of Fujitsu; and provided that Fujitsu
continues to use reasonable efforts to perform despite such interference and
works with Spansion to resolve the problem and resume conformance with the
Service Levels and performance of Fujitsu’s obligations under this Agreement as
soon as practicable.

 

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4.8 Fujitsu Monitoring and Reporting; Monitoring Tools. In accordance with the
schedules set forth in Exhibit 6.1, or if not specified therein, when Fujitsu
generates the reports for itself, but no less frequently than quarterly, Fujitsu
shall measure and report to Spansion, with a copy to the AMD Services Advisor,
Fujitsu’s performance of the Services against the applicable Service Levels.
Such measurement and monitoring shall permit reporting at a level of detail
reasonably sufficient to verify Fujitsu’s compliance with the Service Levels;
unless otherwise agreed by the Parties, Fujitsu may determine the format and
level of detail contained in any such reports (provided such detail is
sufficient in accordance with the foregoing). If Fujitsu makes available
additional services monitoring reports and/or tools to other Fujitsu business
units or Fujitsu Affiliates to monitor and/or report on services similar to the
Services, Fujitsu agrees to make such tools and reports available to Spansion.
Spansion acknowledges, unless it rejects the offer for such tools and reports,
that it will pay any applicable fees or allocated portion of fees to use such
additional monitoring tools or obtain such additional reports.

 

4.9 Spansion Benchmarking. In addition to receiving Fujitsu’s Service Level
performance report pursuant to Section 4.8, Spansion may also independently
analyze Fujitsu’s compliance with the Service Levels and provide Fujitsu
feedback regarding Fujitsu’s performance. If as part of that benchmarking,
Spansion in good faith determines that the pricing it is charged for the
Services is not within a reasonable range, Spansion may notify Fujitsu and the
Parties will consider whether changes are appropriate to the Services to enable
the Parties to enjoy better pricing. Any such benchmarking shall be subject to
the confidentiality restriction set forth in Section 13. If Spansion requests
Fujitsu’s participation in the benchmarking process and such participation
results in incremental work to be performed by Fujitsu that was not otherwise
included in the budget, then Fujitsu will be entitled to charge Spansion at the
Spansion T&M Rates or other mutually-agreed rates for Fujitsu’s participation in
the benchmarking process.

 

5. SPECIAL PROJECTS

 

5.1 Special Projects. Spansion may from time to time during the Term request
that Fujitsu perform Special Projects. Upon receipt of such a request from
Spansion, Fujitsu shall provide Spansion with a written proposal for such
Special Project which shall include:

 

(a) a description of the services, functions and responsibilities Fujitsu
anticipates performing in connection with such Special Project;

 

(b) any impact on Service Levels, Spansion Systems, or the Services, if any,
associated with such Special Project;

 

(c) a description of obligations of Spansion, if any, required for Fujitsu to
perform such Special Project;

 

(d) a schedule for commencing and completing such Special Project;

 

(e) Fujitsu’s prospective Fees for such Special Project, either on a fixed fee
or time and materials basis; and

 

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(f) when appropriate, a description of any new software or equipment required in
connection with such Special Project.

 

Fujitsu shall not begin performing any Special Project until the Parties have
agreed in writing upon the specifications, requirements, schedule and Fees for
such Special Project pursuant to the Change Control Procedures. If Fujitsu
reasonably believes that a proposed Special Project would negatively affect the
Services, any Fujitsu-proprietary Software or Fujitsu’s implementation of third
party Software, either by reducing its performance or functionality, or
increasing the cost to Fujitsu, and Spansion still desires to continue with the
Special Project despite Fujitsu’s objections, the Fujitsu Services Advisor may
submit the matter to the Board of Directors for resolution; provided that any
such notice to the Board of Directors must be in writing, must be submitted to
all members of the Board of Directors simultaneously, and must also be provided
to the Spansion chief financial officer (or other officer supervising the
Spansion Services Manager, if applicable) and to the AMD Services Advisor.

 

5.2 Third Party Services. Spansion shall have the right to contract with a third
party to perform any Special Project, provided that the Special Project does not
relate to Fujitsu-proprietary Software or Systems, does not affect the provision
of Services, and would not result in the breach of an obligation that Fujitsu
may have with a third party. Spansion will notify Fujitsu of any proposal that
Spansion wants to make to a third party to perform a Special Project instead of
having Fujitsu perform that Special Project. If the Parties do not agree upon
terms by which Fujitsu will perform a Special Project, or if Fujitsu objects to
Spansion retaining a third party to perform the Special Project because Fujitsu
reasonably believes in good faith that such Special Project, or the third
party’s performance of that Special Project, will negatively affect the
Services, any Fujitsu-proprietary Software or Fujitsu’s implementation of third
party Software, either by reducing its performance or functionality, or
increasing the cost to Fujitsu, or by causing Fujitsu to breach an obligation to
a third party, each Party shall have the right to escalate the issue to the
Board of Directors, and the Parties shall in good faith negotiate a
mutually-acceptable resolution to the matter. If Spansion does retain a third
party to perform a Special Project hereunder, then Fujitsu and Spansion will
agree in writing upon any changes to the Services, Service Levels, Fees or
Spansion Systems that result from Spansion retaining the third party and
commissioning the Special Project.

 

6. SERVICE LEVELS

 

6.1 Service Levels. Commencing upon the applicable date identified in Exhibit
4.1 (the “Service Level Effective Date”), Fujitsu shall perform the Services at
a minimum in conformance with the Service Levels identified on Exhibit 6.1 (the
“Service Levels”).

 

6.2 Adjustment of Service Levels. The Parties shall review the Service Levels
for the preceding twelve (12) months during the meeting described in Section
10.8, and, (a) with respect to any Service Levels that require periodic
adjustment pursuant to this Agreement or are no longer appropriate because of an
increase, decrease or change to the Services, shall by mutual agreement adjust
the Service Levels for the subsequent Contract Year, and (b) with respect to all
other Service Levels, may adjust by mutual agreement the Service Levels for the
subsequent Contract Year. In addition, either Party may, at any time upon
written notice to the other Party, with a copy to the AMD Services Advisor,
initiate negotiations to review and adjust any Service

 

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Level at any time pursuant to the Change Control Procedures. Any adjustment to
the Service Levels made pursuant to this Section 6.2 shall not be considered an
amendment to this Agreement for purposes of Section 3.7. If the Parties cannot
reach Agreement, then the Service Levels agreed upon for the preceding Contract
Year shall continue to apply.

 

6.3 Root-Cause Analysis. With respect to any (a) Fujitsu failure to provide the
Services in accordance with the applicable Service Levels that gives rise to a
Severity Level 1 failure (as defined in Exhibit 6.4), or (b) Fujitsu failure to
provide the Services in accordance with the applicable Service Levels that gives
rise to a repeated Severity Level 2 failure (as defined in Exhibit 6.4), Fujitsu
shall, as soon as reasonably practicable, (x) perform a root-cause analysis to
identify the cause of such failure or incident, (y) provide Spansion with a
report detailing the cause of, and procedure for correcting, such failure or
incident, and (z) implement such procedure for correcting such failure or
incident.

 

6.4 Remedies for Failure to Meet Service Levels.

 

(a) Spansion agrees that the remedies available to it in the event of a failure
of Fujitsu to provide the Services in accordance with the Service Levels should
be addressed to correcting problems that resulted in such failure, rather than
to penalizing Fujitsu. In recognition of this, (1) a single instance of a
failure to meet a Service Level shall not automatically be deemed a material
breach by Fujitsu and (2) the Parties agree to follow to procedures set forth in
this Section 6.4 as well as Section 6.5 to rectify such failures.

 

(b) For failures to meet the Service Levels or for any other material failure of
a Fujitsu-maintained System, Fujitsu will provide the error correction and
workaround services detailed in Exhibit 6.4 in accordance with the terms and
timelines set forth therein.

 

(c) If, despite the remediation efforts being undertaken as set forth in Exhibit
6.4, the affected Service or Spansion System continues to fail to comply with
the applicable Service Level or continues to suffer from a material defect after
fifteen (15) days of remediation efforts, then the Parties shall undertake the
corrective action process outlined in Section 6.5 below. If no reasonable,
mutually-acceptable resolution is achieved after the conclusion of these
processes, then Spansion may terminate the affected Service pursuant to Section
16.1.

 

6.5 Dispute Escalation Process.

 

(a) Initial Notice; Good Faith Discussion. If the Spansion Services Manager
determines that Fujitsu has failed to perform its obligations under Section 6.4
and Exhibit 6.4, the Spansion Services Manager may initiate contact with the
Fujitsu Services Advisor to discuss the deficiency, and if necessary may submit
a Change Proposal regarding a corrective action plan in accordance with the
Change Control Procedures. Upon such contact, the Spansion Services Manager and
Fujitsu Services Advisor will promptly consider the corrective action plan in
person or by telephone and will attempt in good faith to agree to a mutually
acceptable corrective action plan. The Spansion Services Manager will invite the
AMD Services Advisor to attend any such meetings. If the Parties cannot agree
upon a corrective action plan within a fifteen (15) day business day period, the
issue will be escalated in accordance with clause (b) below.

 

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(b) Management Escalation. If the issue is not resolved in accordance with
clause (a) above, the Spansion Services Manager will notify the Spansion chief
financial officer or other designated Spansion officer supervising the Spansion
Services Manager of the issue. The Spansion chief financial officer or other
designated supervising officer will then contact the Fujitsu Electronics
Device’s Group Executive Vice President of the Business Planning and Promotion
Group to discuss the issue in person or by telephone and the Parties shall
attempt in good faith to resolve the issue for a period of ten (10) business
days. If the issue is not resolved, as agreed by the Parties, with such ten (10)
business day period, the issue will be escalated in accordance with clause (c)
below.

 

(c) Board Escalation. If the Spansion chief financial officer (or other
designated Spansion officer) reasonably determines that Fujitsu has failed to
offer an acceptable remedy for the material breach, then the Spansion officer
shall notify the Board of Directors (a) indicating the nature and the basis of
the issue, and (b) listing the measures that Spansion proposes to take against
Fujitsu in order to remedy the material breach. The Board of Directors shall
consider the measures proposed by the Spansion officer against Fujitsu and shall
provide its recommendation or approval for any measures Spansion shall take to
remedy the material breach.

 

(d) Termination. In the event that the unremediated material breach has a
material adverse impact on Spansion’s business or operations, and subject to
Board of Directors approval, Spansion may terminate the affected Service in
accordance with the provisions set forth in Section 16 (presuming the applicable
cure period has elapsed as set forth therein) and shall have the right to
contract with a third party to perform such Service.

 

(e) Right to Arbitrate. In the event that the Board of Directors approves
Spansion’s proposed measures, and Fujitsu believes that such measures are
inappropriate, Fujitsu shall have the right to institute dispute resolution
proceedings in accordance with Section 15.

 

6.6 Service Level Credits. Spansion acknowledges that no Service Level credits
are applicable to a failure by Fujitsu to provide Services in accordance with
Service Levels. Notwithstanding the foregoing, the Parties agree that if the
cost plus arrangement in Section 10 is materially altered so that the Services
are provided on commercial terms permitting Fujitsu to achieve profit margins
substantially similar to those of a commercial outsourcer providing the same
scope of services to Spansion, then the Parties will adopt mutually-acceptable,
commercially-standard Service Level credits. Further, the Parties agree that if
Fujitsu receives service level credits from a third party outsourcer regarding
Services Fujitsu provides Spansion under this Agreement, Fujitsu will apportion
any service level credits it receives to Spansion in a manner proportionate to
Spansion’s cost allocation by Fujitsu for the affected Service, and any such
credit will offset the next payment obligation of Spansion (to the extent of the
credit) which follows Fujitsu’s accrual of such credit. Fujitsu will promptly
notify Spansion of any such credits.

 

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7. SERVICE LOCATIONS AND SECURITY

 

7.1 Service Locations.

 

(a) The Services shall be provided to Spansion from (i) the Spansion Service
Locations and (ii) the Fujitsu Service Locations as established on the Effective
Date or subsequently changed in accordance with the terms hereof. In the event
Fujitsu desires to establish or move Services to a Spansion Service Location,
such action must go through the Change Order Procedure or be approved in writing
by the Spansion Services Manager.

 

(b) Except as provided in Section 10 and unless otherwise agreed by Spansion,
any incremental expenses incurred by Spansion or Fujitsu and any costs incurred
in connection with the performance or use of the Services, in each case as a
result of Fujitsu’s relocation to, or use of, any different Service Locations at
Fujitsu’s request, shall be paid by Fujitsu or reimbursed to Spansion by
Fujitsu. Any incremental expenses incurred by Spansion or Fujitsu as a result of
a relocation to, or use of, any different Service Locations at Spansion’s
request or direction shall be paid by Spansion or reimbursed to Fujitsu by
Spansion.

 

7.2 Spansion Resources.

 

(a) Spansion Systems. At its own expense and in accordance with the Change
Control Procedures, Spansion may replace and upgrade the Spansion Systems from
time to time in Spansion’s business judgment; provided that in replacing and
upgrading such Spansion Systems, Spansion will not adversely impact Fujitsu’s
ability to provide the Services in accordance with the Service Levels. Fujitsu
will promptly notify Spansion if any Spansion implementation of a new Spansion
System, or any Spansion failure to replace or upgrade existing Spansion Systems
will cause, or has caused, a problem or delay for Fujitsu in providing the
Services. Fujitsu will be excused from failure to meet a Service Level or
otherwise perform its obligations under this Agreement to the extent that
failure to meet such Service Level or otherwise perform its obligations was
caused by the Spansion System upgrade, or the Spansion failure to replace or
upgrade Spansion Systems as notified by Fujitsu. Fujitsu shall work with
Spansion to mitigate the effects of such degradation.

 

(b) Spansion Facilities.

 

(i) For so long as Fujitsu requires the same for the performance of the
Services, subject to Spansion’s agreement (not to be unreasonably conditioned,
delayed or withheld), Spansion shall provide to Fujitsu at no charge access to
and the use of the space in the Spansion Service Locations, together with
personal computers, workstations, terminals, printers, and other equipment
utilized by Spansion, office furnishings, telephone equipment, janitorial
services, utilities, and other reasonable resources, in connection with
Fujitsu’s performance of the Services. Use of Spansion Service Locations by
Fujitsu does not constitute a leasehold interest in favor of Fujitsu, and
Fujitsu shall not have exclusive access or control of the space provided to
Fujitsu under this Agreement.

 

(ii) Fujitsu and Fujitsu Agents shall not commit or permit waste or damage to
such facilities, nor use such facilities for any unlawful purpose or act, and
shall comply with all of Spansion’s general and site-specific policies and
procedures generally

 

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applicable to the applicable Spansion Service Location (as in effect from time
to time and of which Spansion has provided notice to Fujitsu), including
procedures for the physical security of the Spansion Service Locations.

 

(iii) Fujitsu shall permit Spansion and Spansion Agents to enter into those
portions of the Spansion Service Locations occupied by Fujitsu’s staff at any
time to perform facilities-related services. Spansion shall ensure that Spansion
and Spansion Agents shall not interfere with Fujitsu’s performance of Services
while exercising access rights under this Agreement, and Fujitsu shall not be
liable under this Agreement for its non-performance or its failure to meet the
applicable Service Levels to the extent such non-performance or failure is
caused by interference by Spansion or Spansion Agents.

 

7.3 Conduct of Fujitsu Personnel. While at the Spansion Service Locations,
Fujitsu and Fujitsu Agents shall (a) comply with the requests, standard rules
and regulations of Spansion regarding safety and health, personal and
professional conduct (including adhering to general safety practices or
procedures) generally applicable to such Spansion Service Locations, as notified
to Fujitsu from time to time and (b) otherwise conduct themselves in a
businesslike manner. If Spansion notifies Fujitsu that a particular member of
the Fujitsu Personnel is not conducting himself or herself in accordance with
this Section, Fujitsu shall promptly (y) investigate the matter and take
appropriate action which may include (i) removing the applicable personnel from
the Fujitsu Personnel and providing Spansion with prompt notice of such removal
and (ii) replacing the applicable personnel with a similarly qualified
individual, or (z) take other appropriate disciplinary action to prevent a
recurrence. In the event of multiple violations of this Section 7.3 by a
particular member of the Fujitsu Personnel, Fujitsu shall promptly remove the
individual from the Fujitsu Personnel.

 

7.4 Safety and Security Procedures.

 

(a) Fujitsu agrees to comply with Spansion’s physical safety and security
procedures for all Services it provides at Spansion Service Locations.

 

(b) Fujitsu will promptly notify Spansion if any Spansion failure to maintain
and enforce (except for enforcement with respect to Fujitsu Personnel) physical
safety and security procedures at Spansion Service Locations will cause, or has
caused, a material problem or delay for Fujitsu in providing the Services.
Fujitsu will be excused from failure to meet a Service Level or otherwise
perform its obligations under this Agreement only to the extent that a failure
to meet such Service Level or otherwise perform its obligations was caused by
the Spansion failure to maintain and enforce (except for enforcement with
respect to Fujitsu Personnel) physical safety and security procedures at
Spansion Service Locations; provided that Fujitsu continues to use reasonable
efforts to perform despite such failure and works with Spansion to resolve the
failure and resume conformance with the Service Levels and performance of
Fujitsu’s obligations under this Agreement as soon as practicable.

 

7.5 Data Security.

 

(a) Fujitsu shall establish and maintain for Spansion environmental, security,
and other safeguards against the destruction, loss or alteration of Spansion
Data in the possession

 

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of Fujitsu and during the electronic transmission, storage, and shipping thereof
(the “Data Safeguards”) that (i) with respect to the Spansion Service Locations
shall be consistent with (A) Fujitsu’s data security policies and procedures
adopted for Fujitsu in effect as of the Amendment Date or any updated policies
and procedures as Fujitsu may subsequently adopt, and (B) the safeguards
required to meet any higher standard otherwise agreed by the Parties; and (ii)
with respect to the Fujitsu Service Locations shall be no less rigorous than (A)
the data security policies and procedures in effect as of the Amendment Date at
any of the Fujitsu Service Locations or any updated policies and procedures as
Fujitsu may subsequently adopt, and (B) the safeguards required to meet any
higher standard otherwise agreed upon by the Parties.

 

(b) Fujitsu will monitor the activities of third parties who are party to
Spansion Third Party Contracts and will enforce the provisions of such Spansion
Third Party Contracts as they relate to Data Safeguards and resolve any disputes
related thereto.

 

(c) In the event Fujitsu or Fujitsu Agents discover or are notified of a breach
or potential breach of security relating to Spansion Data (whether by Fujitsu or
third parties), Fujitsu shall immediately (i) notify the Spansion Services
Manager of such breach or potential breach and (ii) if the applicable Spansion
Data was in the possession of Fujitsu or Fujitsu Agents at the time of such
breach or potential breach, Fujitsu shall investigate and remediate the effects
of the breach or potential breach. As a part of Fujitsu’s remediation efforts,
if Fujitsu reasonably believes that recurrences of the breach of security could
be prevented by a Change, Fujitsu may propose the Change.

 

8. CONTINUED PROVISION OF SERVICES

 

8.1 Disaster Recovery Plan. Fujitsu will maintain a mutually-accepted disaster
recovery plan (“DRP”) having the characteristics (including targeted time
periods) set forth in Exhibit 8.1. Without limiting Fujitsu’s other obligations
under this Agreement, including the Service Levels, in the event of an
interruption in Services, Fujitsu shall use reasonable efforts to reinstate the
Services as promptly as possible.

 

8.2 Force Majeure. If and to the extent that a Party’s performance of any of its
obligations pursuant to this Agreement is prevented, hindered or delayed by
fire, flood, earthquake, elements of nature or acts of God, acts of war,
terrorism, riots, civil disorders, rebellions or revolutions, or any other
similar cause beyond the reasonable control of such Party (but specifically
excluding labor and union-related activities) (each, a “Force Majeure Event”),
and such non-performance, hindrance or delay could not have been prevented by
reasonable precautions, then the non-performing, hindered or delayed Party shall
be excused for such non-performance, hindrance or delay, as applicable, of those
obligations affected by the Force Majeure Event for as long as such Force
Majeure Event continues and such Party continues to use reasonable efforts to
recommence performance whenever and to whatever extent possible without delay,
including through the use of alternate sources, workaround plans or other means.
The Party whose performance is prevented, hindered or delayed by a Force Majeure
Event shall immediately notify the other Party of the occurrence of the Force
Majeure Event and describe in reasonable detail the nature of the Force Majeure
Event. The occurrence of a Force Majeure Event does not excuse, limit or
otherwise affect Fujitsu’s obligation to provide either normal recovery
procedures or any other disaster recovery services described in Section 8.1,
except to

 

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the extent Fujitsu is prevented, hindered or delayed from such performance by a
Force Majeure Event and Fujitsu continues to use reasonable efforts to
recommence performance whenever and to whatever extent possible without delay.
If a Service cannot be resumed as a result of a Force Majeure Event for a period
of time sufficient to materially hinder Spansion’s ability to continue to
operate, but in no event less than thirty (30) days, Spansion may obtain such
needed Services from a third party; provided however, that if Fujitsu is
thereafter able to resume providing such Service, Spansion will again retain
Fujitsu to provide such Service in accordance with this Agreement.

 

9. ASSIGNED AND MANAGED AGREEMENTS

 

9.1 Assigned Agreements. If the Parties agree that Fujitsu should be assigned
any agreement with a third party service provider or supplier (an “Assigned
Agreement”), the Parties will list such Assigned Agreement in Exhibit 9.1. As of
the Amendment Date, there will be no Assigned Agreements for purposes of this
Agreement. Fujitsu shall assume all responsibility (including all obligations
and post-assignment liability) for the Assigned Agreements. Fujitsu may, to the
extent permitted by the Assigned Agreements, renew, modify, terminate or cancel,
or request or grant any consents or waivers under, any such Assigned Agreements,
provided any such modification, renewal, termination or cancellation does not in
any way cause a material degradation of any of the Services or materially
increase the charges to Spansion under this Agreement except pursuant to the
Change Control Procedures or the Annual Budget Process. Fujitsu shall ensure
that it has the right to assign the Assigned Agreements back to Spansion upon
any termination or expiration of this Agreement.

 

9.2 Assigned Agreement Invoices. Following assignment to Fujitsu, Fujitsu shall
(a) receive all Assigned Agreement invoices, (b) review and correct any errors
in any such Assigned Agreement invoices after receipt thereof, and (c) pay such
Assigned Agreement invoices including any late fees accruing for fees owed after
the effective date of assignment in respect of such Assigned Agreement invoices.

 

9.3 Managed Agreements. Exhibit 9.3 will list any Spansion agreements with third
party service providers that the Parties agree that Fujitsu will manage on
Spansion’s behalf (the “Managed Agreements”). As of the Amendment Date, there
will be no Managed Agreements for purposes of this Agreement. Without limiting
Spansion’s rights under the Managed Agreements, Spansion hereby appoints Fujitsu
as its representative for matters relating to the management, administration,
and maintenance of the Managed Agreements to the extent necessary for Fujitsu to
perform its obligations under this Agreement. Fujitsu shall assist Spansion in
notifying all appropriate third parties of Fujitsu’s role with respect to the
Managed Agreements. Fujitsu shall manage, administer, and maintain the Managed
Agreements in accordance with this Section 9.3, and shall manage such agreements
in a way that does not result in any material degradation of the Services unless
otherwise agreed by the Parties. Fujitsu shall provide Spansion with reasonable
notice of any renewal, termination or cancellation dates and fees with respect
to the Managed Agreements. Fujitsu shall not renew, modify, terminate, or
cancel, or request or grant any consents or waivers under, any Managed
Agreements without the consent of the Spansion Services Manager. Other Spansion
agreements may be managed by Fujitsu and become Managed Agreements governed by
this Section 9.3 upon the mutual agreement of the Parties. Spansion shall
provide Fujitsu with complete copies of all Managed

 

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Agreements, including any modifications to such agreements as required for
Fujitsu to manage such agreements.

 

9.4 Managed Agreement Invoices. Subject to Section 9.3, Fujitsu shall (a)
receive all Managed Agreement Invoices, (b) review and correct any errors in any
such Managed Agreement Invoices in a timely manner after receipt thereof, (c)
pay such Managed Agreement Invoices, and (d) pay any late fees in respect of
such Managed Agreement Invoices; provided that, with respect to invoices to be
delivered by Spansion, Fujitsu receives such invoices in a timely manner.

 

9.5 Performance Under Agreements. Fujitsu shall promptly notify Spansion of any
breach of, or misuse or fraud in connection with, any Managed Agreements of
which Fujitsu becomes aware or should be aware assuming a reasonable inquiry,
and shall cooperate with Spansion to prevent or stay any such breach, misuse or
fraud. Fujitsu shall monitor the activities of third parties who are party to
Spansion Third Party Contracts and will enforce the provisions of such Spansion
Third Party Contracts and resolve any disputes under such contracts.

 

9.6 Vendor Actions. If a third-party vendor’s acts or omissions under a Spansion
Third Party Contract (a “Vendor Action”) prevents, hinders, or delays Fujitsu’s
performance of its obligations under this Agreement, Fujitsu will promptly
notify Spansion. Fujitsu shall be excused from failure to meet a Service Level
or otherwise perform its obligations under this Agreement only to the extent
that a failure to meet such Service Level or otherwise perform its obligations
was caused by a Vendor Action, provided that Fujitsu continues to use reasonable
efforts to perform despite such Vendor Action and works with Spansion to resolve
the problem and resume conformance with the Service Levels and performance of
Fujitsu’s obligations under this Agreement as soon as practicable, and unless
Fujitsu materially failed to perform its management obligations with respect to
such vendor related to the Vendor Action. If Fujitsu obtains damages or other
remedies from a vendor in connection with the Vendor Action, Fujitsu will pass
on the amount of such damages or remedies to Spansion.

 

9.7 Consents. Fujitsu, at its own expense, shall obtain, maintain, and comply
with all of the Fujitsu Consents. Fujitsu shall also comply with the Spansion
Consents. Spansion shall obtain, maintain, and comply with all of the Spansion
Consents; provided, however, that Fujitsu shall, as part of the Services, (a)
perform the administrative tasks and functions required in connection with
obtaining the Spansion Consents (e.g., managing the list of third parties from
which Spansion Consents are required from information provided by Spansion,
preparing letters for execution by Spansion and sending letters executed by
Spansion to such third parties, managing communications with such third parties,
and preparing the forms of Spansion Consents for signature); and (b) after such
Spansion Consents are obtained, maintain the Spansion Consents. In addition,
Fujitsu shall also bear and pay the third party costs of obtaining such Spansion
Consents (e.g., the fees the third party may charge for granting the Spansion
Consent). The Parties shall cooperate in the negotiations of the Spansion
Consents. Except as set forth on Exhibit 9.7, there are no Spansion Consents
required to permit Fujitsu to provide the Services as of the Amendment Date. Any
Spansion Consents obtained by Fujitsu pursuant to this Section 9.7 shall be
prepared in a manner that permits re-assignment to Spansion of the underlying
consent, permission, agreement, or license, as the case may be upon any
termination or the expiration of this Agreement.

 

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10. PAYMENTS AND INVOICING

 

10.1 Fees.

 

(a) In consideration of Fujitsu providing the Services, Spansion shall pay to
Fujitsu the Fees in accordance with the budget allocations and amounts listed on
Exhibit 10 and in accordance with Section 10.3. The Fees are subject to change
annually in accordance with the Annual Budget Process, as well as in accordance
with the Change Control Procedures and the quarterly budget reconciliation
process described in Section 10.9.

 

(b) As of the Amendment Date, the Parties acknowledge that there are no Assigned
Agreements or Managed Agreements and accordingly Spansion shall not be charged
any Managed Agreement Fees and the Assigned Agreement Fees. In the event that
either Party identifies agreements that are proposed to become either Assigned
Agreements or Managed Agreements, it shall notify the other Party in advance of
each such agreement, including information regarding the nature of each
agreement and any proposed Managed Agreement Fees or Assigned Agreement Fees.
Any transfer or subcontracting of Assigned Agreements or Managed Agreements is
subject to the Annual Budget Process. The Managed Agreement Fees and Assigned
Agreement Fees actually charged to Spansion shall reflect the application of any
discounts, including discounts for prompt or early payment.

 

10.2 Special Projects Fees. Subject to the Change Control Procedures, Spansion
shall pay Fujitsu any Special Project Fees agreed upon by the Parties in
writing. As of the Effective Date, there are no approved Special Projects Fees.

 

10.3 Pass-Through Expenses. Exhibit 10.3 sets forth all Pass-Through Expenses
payable by Spansion in conjunction with receipt and use of the Services. Any
Pass-Through Expenses not identified in Exhibit 10.3 as of the Amendment Date
must be approved through the Change Control Procedures, the quarterly
reconciliation process or the Annual Budget Process. Fujitsu shall pay all
Pass-Through Expenses directly to the applicable suppliers and shall invoice
Spansion for amounts paid to such suppliers.

 

10.4 Invoicing. After the beginning of each month of the Term, Fujitsu shall
invoice Spansion for (a) all Fees; (b) all Managed Agreement Fees and Assigned
Agreement Fees, if any; (c) Special Project Fees, if any, payable for services
performed during the previous month, including, in the case of clause (c) any
Reimbursable Expenses incurred by Fujitsu in performing such Special Project and
reimbursable pursuant to Section 10.10; and (d) all Pass-Through Expenses paid
during the previous month. Each monthly invoice shall separately identify any
Pass-Through Expenses incurred by Fujitsu for the period covered by such
invoice. All amounts shall be paid in Japanese Yen. For purposes of determining
the Fees in Japanese Yen, the Parties shall use the Exchange Rate in effect on
the last day of the previous month.

 

10.5 Time of Payment. Fujitsu’s invoices for Fees and Pass-Through Expenses
shall be due and payable within forty-five (45) days after the end of the month
in which the Services were provided or the expenses incurred. Any other sum due
Fujitsu pursuant to this Agreement shall be due and payable within forty-five
(45) days after receipt by Spansion of an invoice from Fujitsu. All payments
will be made via wire transfer or other mutually-acceptable means.

 

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10.6 Fee Dispute. Within thirty (30) days after Spansion’s receipt of each
invoice, Spansion shall give notice to Fujitsu of any amount shown in such
invoice that Spansion disputes in good faith, which notice shall include a
reasonably detailed explanation of the disputed amount and the grounds for the
dispute.

 

10.7 Cost Allocation. Fujitsu will calculate Fees and costs charged to Spansion
using a cost allocation methodology that accurately and fairly reflects
Fujitsu’s reasonable, good faith forecasts of its actual costs associated with
providing the Services herein and with a reasonable allocation to Spansion based
on the provision of Services to Spansion and the costs therefore as a proportion
of total services and costs Fujitsu provides for itself, for Spansion and for
any other division or Affiliate of Fujitsu. Fujitsu agrees that the target of
the Fees and costs charged to Spansion will be Fujitsu’s actual costs in
performing the Services. Fujitsu shall set the Fees each year as part of the
Annual Budget Process at such reasonable, good faith projection of actual costs
(and any overhead costs allocated according to the principle set forth in the
first sentence of this Section) plus five percent (5%) of such costs. Spansion
acknowledges, however, that due to events that occur in between the quarterly
reconciliations described in Section 10.9, the Fees may not accurately reflect
Fujitsu’s actual costs. In such event and to such extent, Fujitsu will not be
deemed in breach of its obligation to charge Fees based on its reasonable, good
faith estimates of actual costs provided Fujitsu uses diligent and good faith
efforts to establish its actual costs as the basis for reconciling Fees under
Section 10.9 and developing future budgets pursuant to the Annual Budget
Process. The Fees will be analyzed and updated pursuant to Section 10.9 and the
Annual Budget Process.

 

10.8 Annual Budget Process. Each year, in accordance with Spansion’s normal
budget process, Fujitsu shall meet with Spansion and assist Spansion as
requested in developing an overall information technology budget, including
expenditures for Special Projects and expenses that are to be paid directly by
Spansion to third parties. Each such annual meeting will also address changes to
the Services, the Service Levels and the applicable Fees for the succeeding year
and the Parties will agree in writing upon the Services, Service Levels and Fees
for the succeeding year. In addition, each year Fujitsu will notify Spansion of
the Spansion T&M Rates for the next year. The AMD Services Advisor may advise
Spansion regarding all such matters in the AMD Services Advisor’s reasonable
judgment.

 

10.9 Price Protection; Quarterly Budget Reconciliation. In addition to
adjustments that may be discussed pursuant to the Annual Budget Process, the
Fees shall be adjusted on a prospective basis by mutual written agreement on a
quarterly basis (excluding the quarter when the Annual Budget Process will take
the place of the quarterly reconciliation process) if a major event has occurred
during the quarter that will substantially increase or decrease the actual costs
of the Services in the future versus the then-current mutually-agreed budget
(e.g., Fujitsu realizes substantial cost savings as the result of an outsourcing
transaction). As part of this quarterly reconciliation process, adjustments to
budgeted Fees and Pass-Through Expenses, whether resulting in an increase or
decrease in Fees and Pass-Through Expenses, will be mutually agreed upon by
Fujitsu and Spansion and will apply prospectively only.

 

10.10 Expenses. Spansion shall pay or reimburse Fujitsu for its Reimbursable
Expenses incurred in connection with its performance of Special Projects under
Section 5 as may be agreed on a project by project basis. Except as provided in
the previous sentence or on Exhibit 10 or

 

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Exhibit 10.3, Fujitsu shall not charge Spansion for any Reimbursable Expenses
incurred by Fujitsu in providing the Services.

 

10.11 Proration. All periodic Fees under this Agreement are to be computed on a
fiscal month basis and shall be prorated on a per diem basis for any partial
month.

 

10.12 Audits. Spansion shall be entitled to appoint an auditor reasonably
acceptable to Fujitsu to audit the security standards and disaster recovery
methods used by Fujitsu herein solely as they apply to protection of Spansion
Data, whether the Fees and Services have been allocated to Spansion as required
by Section 4.1, the cost allocation methodologies used by Fujitsu to calculate
the Fees, the allocation of Fees and Pass Through Expenses, and to otherwise
verify the accuracy of the Fees and expenses that Fujitsu charges Spansion for
provision of Services and Systems under this Agreement. Spansion may conduct one
such audit annually upon reasonable advance written notice to Fujitsu delivered
through the Fujitsu Services Advisor. Fujitsu agrees to provide such auditor
with access to all data, records, reports, resources, facilities and personnel
necessary to enable the auditor to conduct appropriate audits of the issues set
forth above. The auditor shall promptly report any discrepancies in writing to
Spansion, with a copy to the Fujitsu Services Advisor and the AMD Services
Advisor. Any copies provided to the AMD Services Advisor shall only include the
results of the auditor’s analysis and shall be deemed the Confidential
Information of Spansion. Any discrepancy discovered shall be promptly rectified
as part of the next quarter’s budget reconciliation process, whether such
discrepancy resulted in an overpayment or underpayment of Fees. All such audits
shall be at Spansion’s expense. Fujitsu agrees to retain all pertinent records
to justify its allocation of Fees and costs to Spansion for a period of two (2)
years after provision of the applicable Service. In addition, in the event
Fujitsu conducts an audit (either by itself or through an independent auditor)
of a third party providing any Services (or any part thereof), Fujitsu shall
make all such audit results available to Spansion promptly upon Fujitsu’s
receipt thereof (and shall pass on to Spansion any adjustment pursuant to the
budget reconciliation process).

 

11. TAXES

 

11.1 General. Except as specifically set forth in this Section 11, the Fees paid
to Fujitsu are exclusive of any applicable sales, use, gross receipts, excise,
value-added, personal property, services or other Taxes (other than withholding
taxes) (“Transaction Taxes”) attributable to periods on or after the Effective
Date. In the event that Spansion is prohibited by law from making any payment of
Fees unless withholding taxes are deducted or withheld therefrom, then Spansion
shall deduct such amounts as are necessary and pay the net amount to Fujitsu
after such deduction or withholding. Spansion shall promptly furnish Fujitsu
with a copy of an official tax receipt or other appropriate evidence of any
withholding taxes imposed on payments made under this Agreement. As part of this
Agreement, Spansion shall issue Fujitsu such valid tax exemption certificate(s)
for the various state and local taxing authorities as Spansion may legally issue
and Fujitsu may legally and reasonably request to cover Transaction Taxes
legally imposed upon the transactions arising out of this Agreement. In the
event that a Transaction Tax is assessed against Fujitsu on the provision of the
Services by Fujitsu to Spansion or on the Fees, however levied or assessed,
Spansion shall reimburse Fujitsu for or provide acceptable proof that Spansion
has paid said amounts directly to the appropriate taxing authority. Spansion
shall accrue and pay the appropriate amount of Taxes due to any state or

 

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local taxing authority for Transaction Taxes . Spansion will be responsible for
the proper reporting of Transaction Taxes to the taxing authorities, and any
charges associated with such filings, including but not limited to, interest or
penalties due to the taxing authorities. Fujitsu and Spansion agree to mutually
cooperate in a reasonable manner for the purpose of minimizing all Transaction
Taxes that are to be paid directly or indirectly by Spansion. Fujitsu grants
Spansion the right to pursue a separate action against any governmental unit
which asserts Transaction Taxes and Fujitsu agrees to cooperate in a reasonable
manner with Spansion if such action is taken.

 

11.2 Confidentiality; Disclosure to Taxing Authorities. Notwithstanding anything
to the contrary in this Agreement or in any other written or oral understanding
or agreement to which the Parties hereto are parties or by which they are bound,
each Party shall be permitted to disclose the tax treatment and tax structure of
the transactions contemplated hereby (and any related transactions or
arrangements). This permission to disclose includes the ability of each Party to
consult, without limitation of any kind, any tax advisor regarding the tax
treatment or tax structure of the transactions contemplated hereby (and any
related transactions or arrangements). This provision is intended to comply with
Section 1.6011-4(b)(3)(ii)(B) of the Treasury Regulations and shall be
interpreted consistently therewith. Each Party acknowledges that this written
authorization does not constitute a waiver by any Party of any privilege held by
such Party pursuant to the attorney-client privilege or the confidentiality
privilege of Code Section 7525(a).

 

11.3 Other Taxes. Spansion and Fujitsu shall each bear sole responsibility for
franchise and privilege taxes on its business, taxes based on its net income,
and employment taxes with respect to its employees.

 

11.4 New Equipment. Spansion shall bear sole responsibility for all sales, use,
gross receipts, excise, value-added or personal property taxes attributable to
New Equipment and any third party maintenance thereon procured by Fujitsu on
behalf of Spansion (with the consent of Spansion in connection with the Change
Order Procedures) in connection with Fujitsu’s performance of Services under
this Agreement (provided Spansion obtains unencumbered title to such equipment).

 

11.5 Cooperation. Spansion and Fujitsu shall cooperate to segregate the Fees
into the following separate payment categories: (a) those for taxable Services;
and (b) those for nontaxable Services.

 

11.6 Invoices. For any Taxes that Fujitsu is entitled to collect from Spansion
hereunder for remittance to the applicable Governmental Authority, Fujitsu shall
separately state the amount of such Taxes on its invoice. If Fujitsu fails to
timely comply with the foregoing obligation, Fujitsu shall be responsible for
any resulting noncompliance with Law.

 

12. PROPRIETARY RIGHTS.

 

12.1 In General. The terms, conditions and license rights regarding Fujitsu’s
Licensed Parent Software used in the provision or receipt of Services hereunder
shall be governed by the Intellectual Property Contribution and Ancillary
Matters Agreement.

 

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12.2 Other Software. The license of Other Software will be agreed upon by the
Parties pursuant to the Change Control Procedures, as a Special Project, or as
part of the Annual Budget Process. At such time, the Parties will agree whether
the Other Software will be licensed by Fujitsu and sublicensed to Spansion, or
whether Spansion will obtain the license to the Other Software directly with
sufficient rights for Fujitsu to use the Other Software on Spansion’s behalf. If
licensed by Fujitsu, Spansion will bear any associated license and maintenance
fees as either a Pass-Through Expense or as part of the Fees, except to the
extent already included as a Fee or Pass-Through Expense, in which case Fujitsu
shall itself bear such expense and not charge Spansion therefor. In the event
Spansion must pay license fees for Other Software directly, and such fees are
included in the Fees or Pass-Through Expenses, Fujitsu shall reimburse Spansion
for such amount, due within ninety (90) days of Spansion’s notification to
Fujitsu thereof.

 

12.3 Developed Software and Work Product. All Developed Software and Work
Product created pursuant to Fujitsu’s performance of Special Projects shall be
owned by Fujitsu unless expressly agreed in advance to the contrary. If any
ownership of Developed Software or Work Product is assigned to Spansion, such
assignment will be subject to Fujitsu’s right in its Background Technology and
to a grant-back license to Fujitsu.

 

13. CONFIDENTIALITY

 

13.1 Obligations. The Parties acknowledge and agree that all proprietary or
nonpublic information disclosed by one Party (the “Disclosing Party”) to the
other Party (the “Receiving Party”) in connection with this Agreement, directly
or indirectly, which information is (a) marked as “proprietary” or
“confidential” or, if disclosed orally, is designated as confidential or
proprietary at the time of disclosure and reduced in writing or other tangible
(including electronic) form that includes a prominent confidentiality notice and
delivered to the Receiving Party within thirty (30) days of disclosure, or (b)
provided under circumstances reasonably indicating that it constitutes
confidential and proprietary information, constitutes the confidential and
proprietary information of the Disclosing Party (“Confidential Information”).
The Receiving Party may disclose Confidential Information only to those
employees who have a need to know such Confidential Information and who are
bound to retain the confidentiality thereof under provisions (including
provisions relating to nonuse and nondisclosure) no less restrictive than those
required by the Receiving Party for its own confidential information. The
Receiving Party shall, and shall cause its employees to, retain in confidence
and not disclose to any third party (including any of its sub-contractors) any
Confidential Information without the Disclosing Party’s express prior written
consent, and the Receiving Party shall not use such Confidential Information
except to exercise the rights and perform its obligations under this Agreement.
Without limiting the foregoing, the Receiving Party shall use at least the same
procedures and degree of care which it uses to protect its own confidential
information of like importance, and in no event less than reasonable care. The
Receiving Party shall be fully responsible for compliance by its employees with
the foregoing, and any act or omission of an employee of the Receiving Party
shall constitute an act or omission of the Receiving Party. The confidentiality
obligations set forth in this Section 13.1 shall apply and continue, with regard
to all Confidential Information disclosed hereunder, during the Term and for a
period of ten (10) years from the date of termination of this Agreement.

 

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13.2 Exceptions. Notwithstanding the foregoing, Confidential Information will
not include information that: (a) was already known by the Receiving Party,
other than under an obligation of confidentiality to the Disclosing Party or any
third party, at the time of disclosure hereunder, as evidenced by the Receiving
Party’s tangible (including written or electronic) records in existence at such
time; (b) was generally available to the public or otherwise part of the public
domain at the time of its disclosure to the Receiving Party hereunder; (c)
became generally available to the public or otherwise part of the public domain
after its disclosure other than through any act or omission of the Receiving
Party in breach of this Agreement; (d) was subsequently lawfully disclosed to
the Receiving Party by an Entity or person other than the Disclosing Party not
subject to any duty of confidentiality with respect thereto; or (e) was
developed by the Receiving Party without reference to any Confidential
Information disclosed by the Disclosing Party, as evidenced by the Receiving
Party’s tangible (including written or electronic) records in existence at such
time.

 

13.3 Confidentiality of Agreement; Publicity. Each Party agrees that the terms
and conditions of this Agreement shall be treated as Confidential Information
and that no reference shall be made thereto without the prior written consent of
the other Party (which consent shall not be unreasonably withheld) except (a) as
required by Applicable Law, provided that in the case of any filing with a
Governmental Authority that would result in public disclosure of the terms
hereof, the Parties shall mutually cooperate to limit the scope of public
disclosure to the greatest extent possible, (b) to its accountants, banks,
financing sources, lawyers and other professional advisors, provided that such
parties undertake in writing (or are otherwise bound by rules of professional
conduct) to keep such information strictly confidential, (c) in connection with
the enforcement of this Agreement, or (d) pursuant to agreed joint press
releases prepared in good faith. The Parties will consult with each other, in
advance, with regard to the terms of all proposed press releases, public
announcements and other public statements with respect to the transactions
contemplated hereby.

 

14. REPRESENTATIONS AND WARRANTIES.

 

14.1 Services. Fujitsu represents and warrants that it will perform the Services
in a workmanlike and reasonable manner.

 

14.2 DISCLAIMER. EXCEPT AS SPECIFIED IN THIS SECTION 14, NEITHER SPANSION NOR
FUJITSU MAKES ANY OTHER WARRANTIES WITH RESPECT TO THE SERVICES OR THE SYSTEMS
AND EACH EXPLICITLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A SPECIFIC
PURPOSE.

 

15. DISPUTE RESOLUTION

 

15.1 The Parties hereby agree that claims, disputes or controversies of whatever
nature, arising out of, in connection with, or in relation to the
interpretation, performance or breach of this Agreement shall be resolved first
in accordance with any dispute escalation procedures set forth in Section 6.5
above, and, to the extent not resolved after such procedures, in accordance with
the dispute resolution procedure set forth in Schedule A attached hereto.

 

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16. TERMINATION

 

16.1 Service Termination. If Fujitsu has failed to comply with the applicable
Service Levels for a particular Service and has failed to rectify its
performance failure pursuant to the procedures set forth in Section 6 above,
then Spansion may terminate Fujitsu’s provision of such Service after sixty (60)
days have elapsed since initial notification and no cure has successfully been
implemented and Spansion either perform such Service itself or obtain the
services of a third party. The Fees will be adjusted accordingly.

 

16.2 Termination for Cause.

 

(a) If Fujitsu defaults in the performance of any of its material obligations
under this Agreement, and does not cure such default within ninety (90) days
after receipt of a notice of default from Spansion, then Spansion may, without
limiting Spansion’s other rights or remedies under this Agreement, by giving
notice to Fujitsu, terminate this Agreement, in whole or in affected part, as of
the termination date specified in the notice.

 

(b) If Spansion fails to make payments due to Fujitsu under this Agreement and
does not cure such default within ninety (90) days after receipt of a notice of
default from Fujitsu, then Fujitsu may, by giving notice to Spansion, terminate
this Agreement in its entirety as of the termination date specified in the
notice of default.

 

16.3 Termination Assistance Services. Fujitsu shall, upon Spansion’s request
during the Termination Assistance Period, provide the Termination Assistance
Services for (a) the Fees attributable to the Services received by Spansion
pursuant to the termination plan, and (b) for the Termination Assistance
Services other than continued provision of the Services, at the applicable
Spansion T&M Rates. After the expiration of the Termination Assistance Period,
(y) Fujitsu shall provide consulting services to Spansion regarding the Services
on an “as requested” basis at the Spansion T&M Rates and (z) each Party shall
deliver to the other Party any remaining reports, documentation and materials
still in its possession and owned by the other Party, other than reports,
documentation and materials licensed to the Party possessing the same after the
expiration or termination of this Agreement in accordance with the terms of this
Agreement.

 

16.4 Exit Rights For Agreement Termination or Expiration. Upon the later of the
expiration or termination of this Agreement and the last day of the Termination
Assistance Period (the “End Date”):

 

(a) Upon Spansion’s request, with respect to (i) any agreements for maintenance,
disaster recovery services, or other third party services, or any Fujitsu
Systems leased by Fujitsu and being used by Fujitsu or Fujitsu Agents solely to
provide the Services as of the End Date and (ii) the Assigned Agreements then in
effect, Fujitsu shall, and shall cause Fujitsu Agents to, transfer or assign
such agreements to Spansion or Spansion’s designees, on terms and conditions
acceptable to all applicable parties. If Fujitsu cannot make such transfer after
the exercise of reasonable efforts to do so, Fujitsu shall provide to Spansion
at Spansion’s expense equivalent and sufficient rights in replacement of the
agreements that cannot be transferred. The applicable assignment and assumption
agreement governing such transfer or assignment shall include an indemnity by
Spansion protecting Fujitsu from any liability under

 

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such third-party agreements arising after the date of transfer or assignment
thereof to the extent Fujitsu is not otherwise released from liability. Upon
Spansion’s request, Fujitsu will assist Spansion in obtaining directly from
third parties any third party services for which Spansion does not elect to
assume the applicable third party agreements.

 

(b) Upon Spansion’s request, Fujitsu shall sell to Spansion or its designee, on
an “as is, where is basis,” (i) the Fujitsu Systems (other than Fujitsu Systems
leased by Fujitsu) being used by Fujitsu or Fujitsu Agents solely to perform the
Services as of the End Date and (ii) any assets transferred by Spansion to
Fujitsu or Fujitsu Agents, free and clear of all liens, security interests or
other encumbrances at the lesser of the fair market value, as shall be
determined by an agreed-upon appraiser, or book value. Fujitsu shall also
furnish to Spansion all user and other documentation in its possession that
relates to such Systems.

 

Where any of the foregoing rights may be requested by Spansion, Spansion may
request such rights on or before the End Date, but not after the End Date.

 

16.5 Survival. Sections 10, 11, 13, 14, 15, 16.4, 16.5, 17, and 18 shall survive
any termination or expiration of this Agreement.

 

17. DAMAGES

 

17.1 Consequential Damages. Except for breaches of confidentiality obligations,
in no event will either Spansion or Fujitsu be liable for, nor shall the measure
of damages include, any damages for lost profits, lost income or lost revenue,
or for any indirect, incidental, special, or consequential damages, arising out
of or relating to its performance or failure to perform under this Agreement,
whether based on an action or claim in contract, equity, negligence or
otherwise, and even if advised of the possibility of such damages.

 

17.2 Direct Damages. Each of the Parties shall be liable to the other for any
direct damages arising out of or relating to its performance or failure to
perform under this Agreement; provided, however, that the liability of Spansion
and Fujitsu, whether based on an action or claim in contract, equity,
negligence, tort or otherwise, for all events, acts or omissions shall not
exceed, in the aggregate, an amount equal to the amounts paid under this
Agreement during the twelve (12) months preceding the claim.

 

17.3 Basis of the Bargain. Each Party acknowledges that the foregoing
limitations are an essential element of the Agreement between the Parties and
that in the absence of such limitations the pricing and other terms set forth in
this Agreement would be substantially different.

 

18. MISCELLANEOUS PROVISIONS.

 

18.1 Relationship of the Parties. In the exercise of their respective rights,
and the performance of their respective obligations hereunder, the Parties are,
and will remain independent contractors. Nothing in this Agreement will be
construed to constitute the Parties as partners, or principal and agent for any
purpose whatsoever. Neither Party will bind, or attempt to bind, the other Party
hereto to any contract or other obligation, and neither Party will represent to
any third party that it is authorized to act on behalf of the other Party to
this Agreement.

 

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18.2 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of California, United States of America,
as applied to agreements among California residents entered into and wholly to
be performed within the State of California (without reference to any choice or
conflicts of laws rules or principles that would require the application of the
laws of any other jurisdiction and without regard to the United Nations
Convention on Contracts for the International Sale of Goods).

 

18.3 Language. This Agreement is in the English language only, which language
shall be controlling in all respects, and all versions hereof in any other
language shall be for accommodation only and shall not be binding upon the
Parties. All communications and notices to be made or given pursuant to this
Agreement shall be in the English language.

 

18.4 Successors and Assigns. Except as expressly provided herein, the rights and
obligations hereunder may not be assigned or delegated by any Party without the
prior written consent of the other Party. Any purported assignment, sale,
transfer, delegation or other disposition of such rights or obligations by a
Party, except as permitted herein, shall be null and void. Subject to the
foregoing, this Agreement shall be binding upon and shall inure to the benefit
of the Parties and their respective successors and permitted assigns.

 

18.5 Entire Agreement; Amendment. This Agreement (including the Exhibits hereto)
constitutes the full and entire understanding and agreement between the Parties
with regard to the subject matter hereof, and supersede any prior
communications, representations, understandings and agreements, either oral or
written, between the Parties with respect to such subject matter. Except as
expressly provided otherwise herein, this Agreement may not be altered except by
a written instrument signed by authorized legal representatives of both Parties.
Any waiver of the provisions of this Agreement or of a Party’s rights or
remedies under this Agreement must be in writing to be effective. Failure,
neglect or delay by a Party to enforce the provisions of this Agreement or its
rights or remedies at any time will not be construed and will not be deemed to
be a waiver of such Party’s rights under this Agreement and will not in any way
affect the validity of the whole or any part of this Agreement or prejudice such
Party’s right to take subsequent action. No single or partial exercise of any
right, power or privilege granted under this Agreement shall preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies provided in this Agreement are cumulative and
are not exclusive of any rights or remedies provided by law.

 

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18.6 Notices and Other Communications. All notices required or permitted under
this Agreement shall reference this Agreement and will be deemed given: (a) when
delivered personally; (b) when sent by confirmed facsimile; (c) five (5)
business days after having been sent by registered or certified mail, return
receipt requested, postage prepaid; or (d) three (3) business days after deposit
with an internationally recognized commercial overnight carrier specifying
next-day delivery, with written verification of receipt. All such notices,
requests, demands and other communications shall be addressed as follows:

 

If to Spansion:

 

Spansion Inc.

915 DeGuigne Drive

P.O. Box 3453

Sunnyvale, CA 94088

Attention: General Counsel

Telephone: (408) 962-2500

Facsimile: (408) 774-7443

 

If to Fujitsu:

 

Fujitsu Limited

Akiruno Technology Center

50 Fuchigami, Akiruno

Tokyo, 197-0833, Japan

Attention: General Manager

          Device Business Systems Div.

          Corporate IT Group

Telephone: +81-42-532-1373

Facsimile: +81-42-532-2403

 

or to such other address or facsimile number as a Party may have specified to
the other Parties in writing delivered in accordance with this Section 18.6.

 

18.7 Expenses. Except as otherwise expressly set forth in this Agreement, each
Party will bear its own costs and expenses, including fees and expenses of legal
counsel and other representatives used or hired in connection with the
transactions described in this Agreement.

 

18.8 Severability. If any provision in this Agreement will be found or be held
to be invalid or unenforceable, then the meaning of said provision will be
construed, to the extent feasible, so as to render the provision enforceable,
and if no feasible interpretation would save such provision, it will be severed
from the remainder of this Agreement which will remain in full force and effect
unless the severed provision is essential and material to the rights or benefits
received by any Party. In such event, the Parties will negotiate, in good faith,
a substitute, valid and enforceable provision or agreement which most nearly
affects the Parties’ intent in entering into this Agreement.

 

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18.9 No Third Party Beneficiaries. The terms and provisions of this Agreement
are intended solely for the benefit of each Party and their respective
successors and permitted assigns, and the Parties do not intend to confer third
party beneficiary rights upon any other Entity or person. However,
notwithstanding the foregoing, AMD shall be deemed a third party beneficiary to
the rights of the AMD Services Advisor herein and to AMD’s rights under Sections
3.5, 3.6 and 3.7(b), and AMD shall have the right to directly enforce such
rights against Fujitsu and/or Spansion for so long as those rights exist.

 

18.10 Construction. This Agreement shall be deemed to have been drafted by all
Parties and, in the event of a dispute, no Party hereto shall be entitled to
claim that any provision should be construed against any other Party by reason
of the fact that it was drafted by one particular Party.

 

18.11 Execution. This Agreement may be executed in counterparts, each of which
so executed will be deemed to be an original and such counterparts together will
constitute one and the same agreement. Execution and delivery of this Agreement
by exchange of facsimile copies bearing the facsimile signature of a Party shall
constitute a valid and binding execution and delivery of this Agreement by such
Party.

 

18.12 Cumulative Remedies. All remedies provided for in this Agreement shall be
cumulative and in addition to and not in lieu of any other remedies available to
any Party at law, in equity or otherwise.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, each of Spansion and Fujitsu has caused this Agreement to be
signed and delivered by its duly authorized representative.

 

Spansion Inc.

By:

 

/s/ Bertrand F. Cambou

Name:

 

Bertrand F. Cambou

Title:

 

President and Chief Executive Officer

Fujitsu Limited

By:

 

/s/ Toshihiko Ono

Name:

 

Toshihiko Ono

Title:

 

Corporate Executive Vice President

 

29

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EXHIBIT 1

 

DEFINITIONS

 

“Affiliate” of a person or Entity means any other person or Entity which,
directly or indirectly, controls, is controlled by, or is under common control
with, such person or Entity. The term “control” (including, with correlative
meaning, the terms “controlled by” and “under common control with”), as used
with respect to any person or Entity, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such person or Entity, whether through the ownership of voting
securities, by contract or otherwise. A person or Entity shall be deemed an
Affiliate of another person or Entity only so long as such control relationship
exists. Notwithstanding the foregoing, neither Spansion nor any of its directly
or indirectly majority owned subsidiaries (whether organized as corporations,
limited liability companies or other legal entity) shall be deemed to be an
Affiliate of Fujitsu, except to the extent expressly provided in this Agreement.

 

“Aggregate Ownership Interest” has the meaning set forth in Spansion’s
Certificate of Incorporation.

 

“AMD” means Advanced Micro Devices, Inc.

 

“Background Technology” means any patents, trade secrets, copyright rights,
trademark rights, service mark rights, mask work rights and any and all other
intellectual property or proprietary rights now known or hereafter recognized in
any jurisdiction in any and all media which is (a) owned by Fujitsu as of the
Effective Date or (b) conceived, developed, written, or otherwise created or
acquired by Fujitsu on or after the Effective Date.

 

“Change(s)” means any material change to (a) the Services, (b) the Software used
to provide the Services, (c) the Systems used to provide the Services, or (d)
the technical environment of the Services that, in each case, would materially
alter the service content, scope, or performance standards of the Services, or
materially alter the cost to Spansion of the Services. Examples of Changes would
include replacing a Software application from one vendor with that from another
vendor, but not day-to-day operational issues normally handled by IT staff in
the routine performance of their activities, such as implementing a software
patch to correct a Software error, or updating a field in an application.

 

“Consents” means, collectively, the Spansion Consents and Fujitsu Consents.

 

“Contract Year” means June 30, 2003 to December 28, 2003, and thereafter each
fiscal year during the remainder of the Term.

 

“Developed Software” means any Software, modifications or enhancements to
Software, and Related Documentation, developed pursuant to this Agreement by or
on behalf of (a) Fujitsu, (b) Fujitsu Agents, (c) Fujitsu and/or Fujitsu Agents
and Spansion and/or Spansion Agents jointly, or (d) Fujitsu and/or Fujitsu
Agents and Spansion and/or Spansion Agents jointly.

 

“Effective Date” means June 30, 2003.

 

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“Entity” means a corporation, partnership, limited liability company, or other
enterprise, association, organization, or entity.

 

“Fees” means the fees for the Services set forth in Exhibit 10, but not any
Assigned Agreement Fees and Managed Agreement Fees.

 

“Fujitsu Agents” means the agents, subcontractors, and representatives of
Fujitsu, including Fujitsu Affiliates.

 

“Fujitsu Consents” means all licenses, consents, permits, approvals and
authorizations that are necessary to (a) allow Fujitsu and Fujitsu Agents to
use, in providing Services during the Term and the Termination Assistance
Period, in accordance with the terms of this Agreement (i) any Fujitsu Software,
(ii) any assets owned or leased by Fujitsu (including the Fujitsu Systems), and
(iii) any third-party services retained by Fujitsu to provide the Services; and
(b) allow Spansion to access, during the Term and thereafter, the Fujitsu
Software.

 

“Fujitsu Infrastructure” means, collectively the Fujitsu methodologies,
processes, Systems and Software that Fujitsu uses in its own business to provide
the Services or equivalent services within Fujitsu or by Fujitsu to its business
units, Affiliates or subsidiaries, as well as the associated telecommunications
infrastructure and technical environment at the Fujitsu Service Locations.

 

“Fujitsu Personnel” means the personnel of Fujitsu and Fujitsu Agents who
provide the Services.

 

“Fujitsu Service Location(s)” means any Fujitsu service location and any other
service location owned, leased, or operated by Fujitsu, or used by Fujitsu with
the consent of a third party other than Spansion, from which Fujitsu provides
Services.

 

“Governmental Approvals” means all licenses, consents, permits, approvals and
authorizations of any Governmental Authority, or any notice to any Governmental
Authority, the granting of which is required by Law, for the consummation of the
transactions contemplated by this Agreement.

 

“Governmental Authority” means any Federal, state, municipal, local,
territorial, or other governmental department, regulatory authority, judicial or
administrative body, whether domestic, foreign or international.

 

“Intellectual Property Contribution and Ancillary Matters Agreement” means that
certain Amended and Restated Intellectual Property Contribution and Ancillary
Matters Agreement, dated as of December 21, 2005, by and among AMD, AMD
Investments, Inc., a Delaware corporation, Fujitsu and Spansion.

 

“Law” means any declaration, decree, directive, legislative enactment, order,
ordinance, regulation, rule or other binding restriction of or by any
Governmental Authority.

 

“Licensed Parent Software” has the meaning set forth in the Intellectual
Property Contribution and Ancillary Matters Agreement.

 

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“Managed Agreement Invoice(s)” means any invoice submitted by third parties in
connection with the Managed Agreements.

 

“Measurement Period” means the period over which performance against a Service
Level will be measured, as set forth in the applicable Exhibit.

 

“New Equipment” means any Systems obtained by Fujitsu on behalf of Spansion, as
requested by Spansion pursuant to the procurement provisions of Exhibit 4.1.

 

“Other Software” means all Software which is used by Fujitsu in the provision of
the Services, or Software used by Spansion in the receipt of the Services,
excluding any Fujitsu Licensed Parent Software.

 

“Pass-Through Expenses” shall mean the expenses for telephone services, and
allocated costs (in conformity with Section 10.7 of the Agreement) for report
distributions to Spansion which are listed in Exhibit 10.3 and for any other
expenses which Spansion has agreed in advance to be financially responsible, in
accordance with Section 10.3 of this Agreement.

 

“Reimbursable Expenses” means reasonable out-of-pocket travel and travel-related
expenses reasonably agreeable to Spansion and to the extent such expenses are
reimbursable under the expense reimbursement policy attached to Exhibit 10.

 

“Related Documentation” means, with respect to Software and Systems, all
materials, documentation, specifications, technical manuals, user manuals, flow
diagrams, file descriptions and other written information that describe the
function and use of such Software or Systems, as applicable.

 

“Service Location(s)” means any Spansion Service Location or Fujitsu Service
Location, or both, as applicable.

 

“Services” has the meaning set forth in Section 4.1.

 

“Software” means the executable code and, if applicable and supplied by Fujitsu,
source code, versions of any applications programs, operating system software,
computer software languages, utilities, other computer programs and Related
Documentation, in whatever form or media, including the tangible media upon
which such applications programs, operating system software, computer software
languages, utilities, other computer programs and Related Documentation are
recorded or printed, together with all corrections, improvements, updates and
releases thereof.

 

“Spansion Agents” means the agents, employees, contractors, and representatives
of Spansion, other than Fujitsu and Fujitsu Agents.

 

“Spansion Consents” means all licenses, consents, permits, approvals and
authorizations that are necessary to allow (a) Fujitsu and Fujitsu Agents to use
in providing Services during the Term and Termination Assistance Period in
accordance with the terms of this Agreement (i) Spansion owned and leased assets
(including the Spansion Systems), (ii) Spansion facilities, (iii) the services
provided for the benefit of Spansion under Spansion’s third party service
contracts, (iv) the Spansion Software, and (v) Spansion third party Software;
(b) Fujitsu to manage and

 

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administer the Managed Agreements pursuant to Section 9.3; and (c) Spansion to
assign to Fujitsu the Assigned Agreements.

 

“Spansion Data” means all data and information (i) submitted to Fujitsu or
Fujitsu Agents by Spansion, or (ii) otherwise obtained by Fujitsu or Fujitsu
Agents from Spansion pursuant to the performance of the Services.

 

“Spansion Service Location(s)” means any Spansion service location identified in
Exhibit 7.1 and any other service location requested or approved by Spansion
(but excluding Fujitsu Service Locations).

 

“Spansion Software” means Software owned or licensed by Spansion for which
Spansion has the right to provide access to Fujitsu for provision of the
Services without incurring additional costs.

 

“Spansion System” means a System owned by Spansion and used by or on behalf of
Spansion.

 

“Spansion Third Party Contracts” means the Managed Agreements and the Assigned
Agreements, collectively.

 

“Special Project” means any service that is outside the scope of the Services
generally provided by Fujitsu and listed on Exhibit 4.1.

 

“Special Project Fees” means the fees for a Special Project agreed upon by the
Parties.

 

“Systems” means computers and related equipment, including central processing
units and other processors, controllers, modems, communications and
telecommunications equipment (voice, data and video), cables, storage devices,
printers, terminals, other peripherals and input and output devices, and other
tangible mechanical and electronic equipment intended for the processing, input,
output, storage, manipulation, communication, transmission and retrieval of
information and data, as well as any Software installed on such machines.

 

“Tax” or “Taxes” means all taxes, levies, imposts and fees imposed by any
Governmental Authority (domestic or foreign) of any nature including but not
limited to federal, state, local or foreign net income tax, alternative or
add-on minimum tax, profits or excess profits tax, franchise tax, gross income,
adjusted gross income or gross receipts tax, employment related tax (including
employee withholding or employer payroll tax, FICA or FUTA), real or personal
property tax or ad valorem tax, sales or use tax, excise tax, stamp tax or duty,
any withholding or back up withholding tax, value added tax, severance tax,
prohibited transaction tax, premiums tax, occupation tax, together with any
interest or any penalty, addition to tax or additional amount imposed by any
Governmental Authority (domestic or foreign) responsible for the imposition of
any such tax.

 

“Term” means the Initial Term and the Extension Periods (if any).

 

“Termination Assistance Period” means a period of time designated by Spansion,
commencing on the earlier of (i) the date six (6) months prior to the expiration
of the Term or such earlier date as Spansion may request and (ii) the date of
notice by either Party that there will be a termination

 

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of this Agreement and, in the case of each of clause (i) and (ii), continuing
for up to twelve (12) months after the effective date of expiration or
termination of this Agreement; in the case of each of clause (i) and (ii),
during which Fujitsu shall provide the Termination Assistance Services in
accordance with Section 16.

 

“Termination Assistance Services” means (a) the Services being performed (and
required under this Agreement to be performed) by Fujitsu as of the date of
expiration or termination of this Agreement, to the extent Spansion requests
such Services during the applicable Termination Assistance Period; (b) Fujitsu’s
cooperation with Spansion, or another service provider designated by Spansion in
the transfer of the Services (or portion thereof, as applicable) to Spansion or
such other service provider in order to facilitate the smooth and orderly
transition of the Services (or portion thereof, as applicable) to Spansion or
such other service provider; (c) Fujitsu developing, with the cooperation of
Spansion, and subject to the approval of Spansion, a plan for the smooth and
orderly transition of the performance of the Services (or portion thereof, as
applicable) from Fujitsu to Spansion or to a third party designated by Spansion;
(d) Fujitsu providing reasonable training for personnel of Spansion or
Spansion’s designee in the performance of the Services then being transitioned
to Spansion; and (e) Fujitsu performing the other services, functions, and
responsibilities described in Section 16.

 

“Work Product” means literary work or other works of authorship created under
this Agreement, including manuals, training materials, reports, deliverables,
and documentation, but excluding Software and Related Documentation.

 

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