EXHIBIT 10.1

REGISTRATION RIGHTS AGREEMENT

among

SPANSION INC.,

SPANSION LLC

and

CITIGROUP GLOBAL MARKETS INC.

and

CREDIT SUISSE SECURITIES (USA) LLC

as Initial Purchasers

Dated as of June 12, 2006

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REGISTRATION RIGHTS AGREEMENT (this “Agreement”) dated as of June 12, 2006 among
Spansion Inc., a Delaware corporation (the “Company”), Spansion LLC, a Delaware
limited liability company (“Spansion LLC”), and Citigroup Global Markets Inc.
and Credit Suisse Securities (USA) LLC (the “Initial Purchasers”) pursuant to
the Purchase Agreement dated June 6, 2006 (the “Purchase Agreement”), between
Spansion LLC, the Company, Spansion Technology Inc. and the Initial Purchasers.
In order to induce the Initial Purchasers to enter into the Purchase Agreement,
the Company has agreed to provide the registration rights set forth in this
Agreement. The execution of this Agreement is a condition to the closing under
the Purchase Agreement.

Each of Spansion LLC and the Company agrees with the Initial Purchasers, (i) for
their benefit as Initial Purchasers and (ii) for the benefit of the beneficial
owners (including the Initial Purchasers) from time to time of the Debentures
(as defined herein) and the beneficial owners from time to time of the
Underlying Common Stock (as defined herein) issued upon exchange for the
Debentures (each of the foregoing a “Holder” and together the “Holders”), as
follows:

SECTION 1. Definitions. Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase Agreement. As used in
this Agreement, the following terms shall have the following meanings:

“Affiliate” means with respect to any specified person, an “affiliate,” as
defined in Rule 144, of such person.

“Agreement” has the meaning set forth in preamble hereof.

“Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banking institutions in New York City are authorized or required by
law to close.

“Common Stock” means the shares of Class A common stock, par value $.001 per
share, of the Company.

“Company” has the meaning set forth in the preamble hereof.

“Damages Accrual Period” has the meaning set forth in Section 2(e) hereof.

“Damages Payment Date” means each June 15 and December 15.

“Debentures” means the 2.25% Exchangeable Senior Subordinated Debentures Due
2016 of Spansion LLC to be purchased pursuant to the Purchase Agreement.

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“Deferral Notice” has the meaning set forth in Section 3(h) hereof.

“Deferral Period” has the meaning set forth in Section 3(h) hereof.

“Effectiveness Deadline Date” has the meaning set forth in Section 2(a) hereof.

“Effectiveness Period” means the period from the date the Initial Registration
Statement is declared effective by the Commission until such date that is the
earlier of (1) the date as of which all Registrable Securities have been sold
either under Rule 144 under the Securities Act (or any similar provision then in
force) or pursuant to the Shelf Registration Statement, (2) the date as of which
all of the Registrable Securities held by non-affiliates are eligible to be sold
to the public pursuant to Rule 144(k) under the Securities Act or any successor
provision, and (3) the date on which there are no outstanding Registrable
Securities.

“Event” has the meaning set forth in Section 2(e) hereof.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.

“Exchange Date” has the meaning assigned such term in the Indenture.

“Exchange Price” has the meaning assigned such term in the Indenture.

“Exchange Rate” has the meaning assigned such term in the Indenture.

“Filing Deadline Date” has the meaning set forth in Section 2(a) hereof.

“Fundamental Change Repurchase Date” has the meaning assigned such term in the
Indenture.

“Holder” has the meaning set forth in the second paragraph of this Agreement.

“Indenture” means the Indenture, dated as of June 12, 2006, between the Company,
Spansion LLC and Spansion Technology Inc. and Wells Fargo Bank, N.A., as
trustee, pursuant to which the Debentures are being issued.

“Initial Purchasers” has the meaning set forth in the preamble hereof.

“Initial Shelf Registration Statement” has the meaning set forth in Section 2(a)
hereof.

“Issue Date” means June 12, 2006.

 

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“Liquidated Damages Amount” has the meaning set forth in Section 2(e) hereof.

“Material Event” has the meaning set forth in Section 3(h) hereof.

“Notice and Questionnaire” means a written notice delivered to the Company
containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex A to the Offering
Memorandum of Spansion LLC dated June 6, 2006 relating to the Debentures.

“Notice Holder” means, on any date, any Holder that has delivered a completed
Notice and Questionnaire to the Company on or prior to such date.

“Prospectus” means the prospectus included in any Registration Statement, as
amended or supplemented by any amendment or prospectus supplement, including
post-effective amendments, and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such Prospectus.

“Purchase Agreement” has the meaning set forth in the preamble hereof.

“Record Holder” means with respect to any Damages Payment Date relating to any
Debentures as to which any Liquidated Damages Amount has accrued, the registered
holder of such Debenture on the June 1 immediately preceding a Damages Payment
Date occurring on a June 15, and on the December 1 immediately preceding a
Damages Payment Date occurring on a December 15.

“Registrable Securities” means, at all times subsequent to any exchange for
Debentures, the Underlying Common Stock and any securities into or for which
such Underlying Common Stock has been converted or exchanged, and any security
issued with respect thereto upon any stock dividend, split or similar event
during the Effectiveness Period.

“Registration Statement” means any registration statement of the Company that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.

“Restricted Securities” means “restricted securities” as defined in Rule 144.

“Rule 144” means Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by the
SEC.

 

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“Rule 144A” means Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated by the SEC thereunder.

“Shelf Registration Statement” has the meaning set forth in Section 2(a) hereof.

“Spansion LLC” has the meaning set forth in the preamble hereof.

“Special Counsel” means Davis Polk & Wardwell or one such other successor
counsel as shall be specified by the Holders of a majority of the Registrable
Securities, but which may, with the written consent of the Initial Purchasers
(which shall not be unreasonably withheld), be another nationally recognized law
firm experienced in securities law matters designated by the Company, the
reasonable fees and expenses of which will be paid by the Company pursuant to
Section 5 hereof. For purposes of determining the Holders of a majority of the
Registrable Securities in this definition, Holders of Debentures shall be deemed
to be the Holders of the number of shares of Underlying Common Stock into which
such Debentures are or would be exchangeable as of the date the consent is
requested.

“Subsequent Shelf Registration Statement” has the meaning set forth in
Section 2(b) hereof.

“TIA” means the Trust Indenture Act of 1939, as amended.

“Trustee” means Wells Fargo Bank, N.A., the Trustee under the Indenture.

“Underlying Common Stock” means the Common Stock for which the Debentures are
exchanged or issued upon any such exchange.

SECTION 2. Shelf Registration. (a) The Company shall prepare and file or cause
to be prepared and filed with the SEC, as soon as practicable but in any event
prior to January 6, 2007 (the “Filing Deadline Date”), a Registration Statement
for an offering to be made on a delayed or continuous basis pursuant to Rule 415
of the Securities Act (a “Shelf Registration Statement”) registering the resale
from time to time by Holders thereof of Registrable Securities the number of
which shall equal the principal amount of outstanding Debentures multiplied by
the Exchange Rate, as may be adjusted from time to time pursuant to the
Indenture, and divided by $1,000 (the “Initial Shelf Registration Statement”).
The Initial Shelf Registration Statement shall be on Form S-3 or another

 

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appropriate form permitting registration of such Registrable Securities for
resale by such Holders. The Company shall use its reasonable best efforts to
cause the Initial Shelf Registration Statement to be declared effective under
the Securities Act as promptly as practicable but in no event later than May 6,
2007 (the “Effectiveness Deadline Date”), and to keep the Initial Shelf
Registration Statement (or any Subsequent Shelf Registration Statement)
continuously effective under the Securities Act until the expiration of the
Effectiveness Period. At the time the Initial Shelf Registration Statement is
declared effective, each Holder that became a Notice Holder on or prior to the
date five (5) Business Days prior to such time of effectiveness shall be named
as a selling securityholder in the Initial Shelf Registration Statement and the
related Prospectus in such a manner as to permit such Holder to deliver such
Prospectus to purchasers of Registrable Securities in accordance with applicable
law.

(b) If the Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effectiveness Period (other than because all Registrable Securities
registered thereunder shall have been resold pursuant thereto or shall have
otherwise ceased to be Registrable Securities), the Company shall use its
reasonable best efforts to obtain the prompt withdrawal of any order suspending
the effectiveness thereof, and in any event shall within thirty (30) days of
such cessation of effectiveness amend the Shelf Registration Statement in a
manner reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a “Subsequent Shelf Registration Statement”). If a
Subsequent Shelf Registration Statement is filed, the Company shall use its
reasonable best efforts to cause the Subsequent Shelf Registration Statement to
become effective as promptly as practicable after such filing and to keep such
Registration Statement (or subsequent Shelf Registration Statement) continuously
effective until the end of the Effectiveness Period.

(c) The Company shall supplement and amend the Shelf Registration Statement if
required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement, if
required by the Securities Act or as necessary to name a Notice Holder as a
selling securityholder pursuant to Section 2(d) below.

(d) Each Holder agrees that if such Holder wishes to sell Registrable Securities
pursuant to a Shelf Registration Statement and related Prospectus, it will do so
only in accordance with this Section 2(d) and Section 3(h) hereof. Each Holder
who elects to sell Registrable Securities pursuant to a Shelf Registration
Statement agrees by submitting a Notice and Questionnaire to the Company, it
will be bound by the terms and conditions of the Notice and Questionnaire and
this Agreement. From and after the date the Initial Shelf Registration Statement
is declared effective, the Company shall, within a reasonably practicable period
of time after the date a Notice and Questionnaire is delivered pursuant to
Section 8(c) hereof:

 

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(i) if required by applicable law, file with the SEC a post-effective amendment
to the Shelf Registration Statement or prepare and, if required by applicable
law, file a supplement to the related Prospectus or file any other required
document so that the Holder delivering such Notice and Questionnaire is named as
a selling securityholder in the Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to purchasers of the Registrable Securities in accordance with applicable law
and, if the Company shall file a post-effective amendment to the Shelf
Registration Statement, use its reasonable best efforts to cause such
post-effective amendment to be declared effective under the Securities Act as
promptly as practicable;

(ii) provide such Holder copies of any documents filed pursuant to
Section 2(d)(i); and

(iii) notify such Holder as promptly as practicable after the effectiveness
under the Securities Act of any post-effective amendment filed pursuant to
Section 2(d)(i);

provided that in no event shall the Company be required to file a post-effective
amendment to the Shelf Registration Statement more than once per fiscal quarter;
provided further that if such Notice and Questionnaire is complete and is
delivered during a Deferral Period, the Company shall so inform the Holder
delivering such Notice and Questionnaire and shall take the actions set forth in
clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in
accordance with Section 3(h). Notwithstanding anything contained herein to the
contrary, the Company shall be under no obligation to name any Holder that is
not a Notice Holder as a selling securityholder in any Registration Statement or
related Prospectus.

(e) The parties hereto agree that the Holders of Debentures will suffer damages,
and that it would not be feasible to ascertain the extent of such damages with
precision, if, other than as permitted hereunder,

(i) the Initial Shelf Registration Statement has not been filed on or prior to
the Filing Deadline Date,

(ii) the Initial Shelf Registration Statement has not been declared effective
under the Securities Act on or prior to the Effectiveness Deadline Date, or

(iii) the aggregate duration of Deferral Periods in any period exceeds the
number of days permitted in respect of such period pursuant to Section 3(h)
hereof.

 

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Each event described in any of the foregoing clauses (i) through (iii) is
individually referred to herein as an “Event.” For purposes of this Agreement,
each Event set forth above shall begin on the dates set forth in the table below
and shall end on the dates set forth in the table below:

 

Type of Event
by Clause   

Beginning Date

  

Ending Date

(i)    Filing Deadline Date    the date the Initial Shelf Registration Statement
is filed (ii)    Effectiveness Deadline Date    the date the Initial Shelf
Registration Statement becomes effective under the Securities Act (iii)    the
date on which the aggregate duration of Deferral Periods in any period exceeds
the number of days permitted by Section 3(h)    termination of the Deferral
Period that caused the limit on the aggregate duration of Deferral Periods to be
exceeded

From and including the day following an Event and ending on (but excluding) the
next date on which there are no Events that have occurred and are continuing (a
“Damages Accrual Period”), Spansion LLC shall pay, as liquidated damages and not
as a penalty, to Record Holders of Debentures an amount (the “Liquidated Damages
Amount”) accruing, for each day in the Damages Accrual Period, (i) in respect of
any Debenture, at a rate per annum equal to 0.25% of the aggregate principal
amount of such Debenture for the first 90 days in the Damages Accrual Period and
0.50% of the aggregate principal amount of such Debenture thereafter.
Notwithstanding the foregoing, no Liquidated Damages Amount shall accrue as to
any Debenture from and after the earlier of (a) the date the Debenture is
exchanged for Underlying Common Stock, (b) the date the related Underlying
Common Stock is no longer a Registrable Security and (c) expiration of the
Effectiveness Period. The rate of accrual of the Liquidated Damages Amount with
respect to any period shall not exceed 0.50% notwithstanding the occurrence of
multiple concurrent Events.

The Liquidated Damages Amount shall accrue from the first day of the applicable
Damages Accrual Period, and shall be payable semi-annually in arrears on each
Damages Payment Date during the Damages Accrual Period (and on the

 

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Damages Payment Date next succeeding the end of the Damages Accrual Period if
the Damages Accrual Period does not end on a Damages Payment Date) to the Record
Holders of the Debentures entitled thereto; provided that any Liquidated Damages
Amount accrued with respect to any Debenture or portion thereof repurchased by
the Company on a Fundamental Change Repurchase Date or exchanged for Underlying
Common Stock on an Exchange Date prior to the Damages Payment Date, shall, in
any such event, be paid instead to the Holder who submitted such Debenture or
portion thereof for repurchase or exchange on the applicable Fundamental Change
Repurchase Date or Exchange Date, as the case may be, on such date (or promptly
following the Exchange Date, in the case of exchange). The Trustee shall be
entitled, on behalf of registered holders of Debentures, to seek any available
remedy for the enforcement of this Agreement, including for the payment of such
Liquidated Damages Amount. Notwithstanding the foregoing, the parties agree that
the sole damages payable for a violation of the terms of this Agreement with
respect to which liquidated damages are expressly provided shall be such
liquidated damages. Nothing shall preclude any Holder from pursuing or obtaining
specific performance or other equitable relief with respect to this Agreement.
Liquidated damages will be computed on the basis of a 360-day year comprised of
twelve 30-day months.

All of the Company’s obligations set forth in this Section 2(e) that are
outstanding with respect to any Registrable Security at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 8(k)).

The parties hereto agree that the liquidated damages provided for in this
Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Debentures by reason of the failure of the Shelf
Registration Statement to be filed or declared effective or available for
effecting resales of Registrable Securities in accordance with the provisions
hereof.

SECTION 3. Registration Procedures. In connection with the registration
obligations of the Company under Section 2 hereof, during the Effectiveness
Period, the Company shall:

(a) Prepare and file with the SEC a Registration Statement or Registration
Statements on any appropriate form under the Securities Act available for the
sale of the Registrable Securities by the Holders thereof in accordance with the
intended method or methods of distribution thereof, and use its reasonable best
efforts to cause each such Registration Statement to become effective and remain
effective as provided herein; provided that before filing any Registration
Statement or Prospectus or any amendments or supplements thereto with the SEC
(other than any amendments or supplements solely to update the selling
stockholder information in the Prospectus or any amendments caused by the filing
of a report under the Exchange Act), the Company shall furnish to the Initial
Purchasers and the Special Counsel of such offering, if any, copies of all

 

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such documents proposed to be filed at least three (3) Business Days prior to
the filing of such Registration Statement or amendment thereto or Prospectus or
supplement thereto.

(b) Subject to Section 3(h), prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement continuously effective for the applicable
period specified in Section 2(a); cause the related Prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act.

(c) As promptly as practicable give notice to the Notice Holders and the Special
Counsel, (i) when any Prospectus, prospectus supplement, Registration Statement
or post-effective amendment to a Registration Statement has been filed with the
SEC (other than any amendments or supplements solely to update the selling
stockholder information in the Prospectus or any amendments caused by the filing
of a report under the Exchange Act) and, with respect to a Registration
Statement or any post-effective amendment, when the same has been declared
effective, (ii) of any request, following the effectiveness of the Initial Shelf
Registration Statement under the Securities Act, by the SEC for amendments or
supplements to any Registration Statement or related Prospectus or for
additional information, (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of any Registration Statement or the initiation or
threatening of any proceedings for that purpose, (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose and (v) of the occurrence of, but not the nature of or details
concerning, a Material Event, which notice may, at the discretion of the Company
(or as required pursuant to Section 3(h)), state that it constitutes a Deferral
Notice, in which event the provisions of Section 3(h) shall apply.

(d) Use its reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction in which they have been
qualified for sale, in either case at the earliest possible moment, and provide
immediate notice to each Notice Holder and the Initial Purchasers of the
withdrawal of any such order.

(e) As promptly as practicable furnish to each Notice Holder, the Special
Counsel and the Initial Purchasers, upon request and without charge, at least
one (1) conformed copy of the Registration Statement and any amendment thereto.

 

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(f) During the Effectiveness Period, deliver to each Notice Holder, the Special
Counsel and the Initial Purchasers, in connection with any sale of Registrable
Securities pursuant to a Registration Statement, without charge, as many copies
of the Prospectus relating to such Registrable Securities (including each
preliminary prospectus) and any amendment or supplement thereto as such Notice
Holder may reasonably request; and the Company hereby consents (except during
such periods that a Deferral Notice is outstanding and has not been revoked) to
the use of such Prospectus, and any amendment or supplement thereto, by each
Notice Holder in connection with any offering and sale of the Registrable
Securities covered by such Prospectus, or any such amendment or supplement
thereto, in the manner set forth therein.

(g) Prior to any public offering of the Registrable Securities pursuant to a
Registration Statement, use its reasonable best efforts to register or qualify
or cooperate with the Notice Holders and the Special Counsel in connection with
the registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Notice Holder reasonably requests in writing (which request may be included
in the Notice and Questionnaire); and prior to any public offering of the
Registrable Securities pursuant to the Shelf Registration Statement, use its
reasonable best efforts to keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period in connection
with such Notice Holder’s offer and sale of Registrable Securities pursuant to
such registration or qualification (or exemption therefrom); provided that the
Company will not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it is not then so qualified or
(ii) take any action that would subject it to general service of process in
suits or to taxation in any such jurisdiction where it is not then so subject.

(h) Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of the Shelf Registration Statement under Section 8(d) or 8(e) of
the Securities Act or the initiation of proceedings under Section 8A of the
Securities Act with respect to the Shelf Registration Statement (B) the judgment
of the Company, the Registration Statement contains an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, or any Prospectus
contains an untrue statement of material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or
(C) the reasonable belief that the Company possesses material non-public
information the disclosure of which would be seriously detrimental to the
Company and its subsidiaries, taken as a whole (a “Material Event”):

(i) in the case of clause (B) above, subject to the next sentence, as promptly
as practicable prepare and file, if necessary pursuant to applicable law, a
post-effective amendment to such Registration

 

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Statement or a supplement to the related Prospectus or any document incorporated
therein by reference or file any other required document that would be
incorporated by reference into such Registration Statement and Prospectus so
that such Registration Statement does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and such Prospectus
does not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, as thereafter delivered to the purchasers of the Registrable
Securities being sold thereunder, and, in the case of a post-effective amendment
to a Registration Statement, subject to the next sentence, use its reasonable
best efforts to cause it to be declared effective as promptly as practicable,
and

(ii) give notice to the Notice Holders and the Special Counsel that the
availability of the Shelf Registration Statement is suspended (a “Deferral
Notice”) and, upon receipt of any Deferral Notice, each Notice Holder agrees not
to sell any Registrable Securities pursuant to the Registration Statement until
such Notice Holder’s receipt of copies of the supplemented or amended Prospectus
provided for in clause (i) above, or until it is advised in writing by the
Company that the Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in such Prospectus.

The Company will use its reasonable best efforts to ensure that the use of the
Prospectus may be resumed (x) in the case of clauses (A) and (B) above, as
promptly as practicable and (y) in the case of clause (C) above, as soon as, in
the sole judgment of the Company, public disclosure of such Material Event would
not be prejudicial to or contrary to the interests of the Company and such
suspension is no longer appropriate. The Company shall be entitled to exercise
its right under this Section 3(h) to suspend the availability of the Shelf
Registration Statement or any Prospectus (the “Deferral Period”) without
incurring or accruing any obligation on the part of Spansion LLC to pay
liquidated damages pursuant to Section 2(e); provided that any such Deferral
Period shall not exceed 45 days in any 90-day period (or 60 days in any 90-day
period in the event of a Material Event pursuant to which the Company has
delivered a second notice as required below) or 90 days in any 360-day period;
provided further that in the case of a Material Event relating to a proposed or
pending material business transaction the disclosure of which would, as
determined in good faith by the Company, be reasonably likely to impede the
Company’s ability to consummate such transaction, or would otherwise be
seriously detrimental to the Company and its subsidiaries, taken as a whole, the
Company may, without incurring any obligation on the part of Spansion LLC to pay
liquidated damages pursuant to Section 2(e), deliver to Notice Holders a second
notice to the effect set forth above, which shall have the effect of extending
the Deferral Period from 45 days to 60 days, or such shorter period of time as
is specified in such second notice.

 

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(i) Comply with all applicable rules and regulations of the SEC and make
generally available to its security holders earning statements (which need not
be audited) satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the Securities Act)
for a 12-month period commencing on the first day of the first fiscal quarter of
the Company commencing after the effective date of a Registration Statement,
which statements shall be made available no later than 45 days after the end of
the 12-month period or 90 days if the 12-month period coincides with the fiscal
year of the Company.

(j) Cooperate with each Notice Holder to facilitate the timely preparation and
delivery of certificates representing Registrable Securities sold or to be sold
pursuant to a Registration Statement, which certificates shall not bear any
restrictive legends, and cause such Registrable Securities to be registered in
such names as such Notice Holder may request in writing.

SECTION 4. Holder’s Obligations. Each Holder agrees, by acquisition of the
Registrable Securities, that no Holder shall be entitled to sell any of such
Registrable Securities pursuant to a Registration Statement or to receive a
Prospectus relating thereto, unless such Holder has furnished the Company with a
fully completed Notice and Questionnaire as required pursuant to Section 2(d)
hereof (including all information required to be included in such Notice and
Questionnaire) and the information set forth in the next sentence. Each Notice
Holder agrees promptly to furnish to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Notice Holder not misleading and any other information regarding such
Notice Holder and the distribution of such Registrable Securities as the Company
may from time to time reasonably request. Any sale of any Registrable Securities
by any Holder shall constitute a representation and warranty by such Holder that
the information relating to such Holder and its plan of distribution is as set
forth in the Prospectus delivered by such Holder in connection with such
disposition, that such Prospectus does not as of the time of such sale contain
any untrue statement of a material fact relating to or provided by such Holder
or its plan of distribution and that such Prospectus does not as of the time of
such sale omit to state any material fact relating to or provided by such Holder
or its plan of distribution necessary to make the statements in such Prospectus,
in the light of the circumstances under which they were made, not misleading.

SECTION 5. Registration Expenses. Except for any fees of the Special Counsel,
Spansion LLC shall bear all fees and expenses incurred in connection with the
performance by the Company of its obligations under Sections 2 and 3 of this
Agreement whether or not any Registration Statement is declared effective. Such
fees and expenses shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses with respect to
filings

 

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required to be made with the National Association of Securities Dealers, Inc.,
(ii) duplication expenses relating to copies of any Registration Statement or
Prospectus delivered to any Holders hereunder, (iii) fees and disbursements of
counsel for the Company in connection with the Shelf Registration Statement,
(iv) reasonable fees and disbursements of the registrar and transfer agent for
the Common Stock (v) any Securities Act liability insurance obtained by the
Company in its sole discretion, (vi) the expense of any annual audit, (vii) the
fees and expenses incurred in connection with the listing by the Company of the
Registrable Securities on any securities exchange on which similar securities of
the Company are then listed and (viii) the fees and expenses of any person,
including special experts, retained by the Company. Notwithstanding the
provisions of this Section 5, each seller of Registrable Securities shall pay
selling expenses, including any underwriting discount and commissions, and all
registration expenses to the extent required by applicable law.

SECTION 6. Indemnification and Contribution.

(a) Indemnification by the Company. The Company agrees to indemnify and hold
harmless each Notice Holder, each person, if any, who controls any Notice Holder
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, and each affiliate of any Notice Holder within the meaning of
Rule 405 under the Securities Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement or any amendment
thereof, or the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided that the
Company will not be liable in any such case to the extent that any such losses,
claims, damages or liabilities arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Holder furnished to the Company in writing by such
Holder expressly for use therein, including any and all information included in
such Holder’s Notice and Questionnaire.

(b) Indemnification by Holders. Each Holder agrees severally and not jointly to
indemnify and hold harmless the Company and its directors, its officers and each
person, if any, who controls the Company (within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act) or any other
Holder, to the same extent as the foregoing indemnity from the Company to such
Holder, but only with reference to information relating to such Holder furnished
to the Company in writing by such Holder expressly for use in such Registration
Statement or Prospectus or amendment or supplement thereto, including any and
all information included in such Holder’s Notice and Questionnaire. In no event
shall the liability of any Holder hereunder be greater in amount than the dollar

 

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amount of the proceeds received by such Holder upon the sale of the Registrable
Securities pursuant to the Registration Statement giving rise to such
indemnification obligation.

(c) Conduct of Indemnification Proceedings. In case any proceeding (including
any governmental investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to Section 6(a) or 6(b)
hereof, such person (the “indemnified party”) shall promptly notify the person
against whom such indemnity may be sought (the “indemnifying party”) in writing
and the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the reasonable fees and disbursements of such counsel
related to such proceeding. The failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above unless
and to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by, in
the case of parties indemnified pursuant to Section 6(a), the Holders of a
majority (with Holders of Debentures deemed to be the Holders, for purposes of
determining such majority, of the number of shares of Underlying Common Stock
into which such Debentures are or would be exchangeable as of the date on which
such designation is made) of the Registrable Securities covered by the
Registration Statement held by Holders that are indemnified parties pursuant to
Section 6(a) and, in the case of parties indemnified pursuant to Section 6(b),
the Company. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have

 

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been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.

(d) Contribution. To the extent that the indemnification provided for in
Section 6(a) or 6(b) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the indemnifying party or
parties on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company shall be deemed to
be equal to the total net proceeds from the initial placement pursuant to the
Purchase Agreement (before deducting expenses) of the Registrable Securities to
which such losses, claims, damages or liabilities relate. The relative benefits
received by any Holder shall be deemed to be equal to the value of receiving
Registrable Securities that are registered under the Securities Act. The
relative fault of the Holders on the one hand and the Company on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Holders or by
the Company, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Holders’
respective obligations to contribute pursuant to this Section 6 are several in
proportion to the respective number of Registrable Securities they have sold
pursuant to a Registration Statement, and not joint.

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding this
Section 6, no indemnifying party that is a selling Holder shall be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable

 

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Securities sold by it and distributed to the public were offered to the public
exceeds the amount of any damages that such indemnifying party has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

(e) The remedies provided for in this Section 6 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to an indemnified
party at law or in equity, hereunder, under the Purchase Agreement or otherwise.

(f) The indemnity and contribution provisions contained in this Section 6 shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of any Holder,
any person controlling any Holder or any affiliate of any Holder or by or on
behalf of the Company, its officers or directors or any person controlling the
Company and (iii) the sale of any Registrable Securities by any Holder.

SECTION 7. Information Requirements. The Company covenants that, if at any time
before the end of the Effectiveness Period the Company is not subject to the
reporting requirements of the Exchange Act, it will cooperate with any Holder
and take such further reasonable action as any Holder may reasonably request in
writing (including, without limitation, making such reasonable representations
as any such Holder may reasonably request), all to the extent required from time
to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144, Rule 144A under the Securities Act and customarily taken
in connection with sales pursuant to such exemptions. Notwithstanding the
foregoing, nothing in this Section 7 shall be deemed to require the Company to
register any of its securities (other than the Common Stock) under any section
of the Exchange Act.

SECTION 8. Miscellaneous.

(a) No Conflicting Agreements. Neither the Company or Spansion LLC is, as of the
date hereof, a party to, nor shall it, on or after the date of this Agreement,
enter into, any agreement with respect to its securities that conflicts with the
rights granted to the Holders in this Agreement. Each of the Company and
Spansion LLC represents and warrants that the rights granted to the Holders
hereunder do not in any way conflict with the rights granted to the holders of
the its securities under any other agreements.

(b) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof

 

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may not be given, unless the Company has obtained the written consent of Holders
of a majority of the then outstanding Underlying Common Stock constituting
Registrable Securities (with Holders of Debentures deemed to be the Holders, for
purposes of this Section, of the number of outstanding shares of Underlying
Common Stock into which such Debentures are or would be exchangeable as of the
date on which such consent is requested). Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders whose securities are being
sold pursuant to a Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of at
least a majority of the Registrable Securities being sold by such Holders
pursuant to such Registration Statement; provided that the provisions of this
sentence may not be amended, modified or supplemented except in accordance with
the provisions of the immediately preceding sentence. Notwithstanding the
foregoing, this Agreement may be amended by written agreement signed by the
Company, Spansion LLC and the Initial Purchasers, without the consent of the
Holders of Registrable Securities, to cure any ambiguity or to correct or
supplement any provision contained herein that may be defective or inconsistent
with any other provision contained herein, or to make such other provisions in
regard to matters or questions arising under this Agreement that shall not
adversely affect the interests of the Holders of Registrable Securities. Each
Holder of Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant to
this Section 8(b), whether or not any notice, writing or marking indicating such
amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.

(c) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, by telecopier, by courier
guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:

(i) if to a Holder, at the most current address given by such Holder to the
Company in a Notice and Questionnaire or any amendment thereto;

 

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  (ii) if to the Company or Spansion LLC, to:

Spansion Inc.

915 DeGuigne Drive

P.O. Box 3453

Sunnyvale, California 94088

Attention: General Counsel

Telecopy No.: (408) 774-7443

and

Latham & Watkins LLP

140 Scott Drive

Menlo Park, California 94025

Attention: Tad Freese

Telecopy No.: (650) 463-2600

 

  (iii) if to the Initial Purchasers, to:

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Telecopy No.: (212) 816-7912

or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.

(d) Approval of Holders. Whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than the Initial Purchasers
or subsequent Holders if such subsequent Holders are deemed to be such
affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.

(e) Successors and Assigns. Any person who purchases any Registrable Securities
from the Initial Purchasers shall be deemed, for purposes of this Agreement, to
be an assignee of the Initial Purchasers. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
and shall inure to the benefit of and be binding upon each Holder of any
Registrable Securities. If any transferee of any Holder shall acquire
Registrable Securities, in any manner, whether by operation of law or otherwise,
such Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such person shall be entitled to
receive the benefits hereof.

 

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(f) Counterparts. This Agreement may be executed in counterparts, each of which
shall be with the same effect as if the signatures thereto and hereto were upon
the same instrument.

(g) Headings. The headings of the sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed a part of this
Agreement.

(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(i) Severability. If any term, provision, covenant or restriction of this
Agreement is held to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated thereby, and the parties hereto shall use their best efforts to find
and employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction, it
being intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.

(j) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and is intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and the registration rights granted by the
Company with respect to the Registrable Securities. Except as provided in the
Purchase Agreement, there are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted by the Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and undertakings
among the parties with respect to such registration rights. No party hereto
shall have any rights, duties or obligations other than those specifically set
forth in this Agreement.

(k) Termination. This Agreement and the obligations of the parties hereunder
shall terminate upon the end of the Effectiveness Period, except for any
liabilities or obligations under Section 4, 5 or 6 hereof and the obligations to
make payments of and provide for liquidated damages under Section 2(e) hereof to
the extent such damages accrue prior to the end of the Effectiveness Period,
each of which shall remain in effect in accordance with its terms.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 

SPANSION INC. By:  

/s/ Dario Sacomani

Name:   Dario Sacomani Title:   Executive Vice President and Chief Financial
Officer SPANSION LLC By:   SPANSION INC., its managing member By:  

/s/ Dario Sacomani

Name:   Dario Sacomani Title:   Executive Vice President and Chief Financial
Officer

 

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Confirmed and accepted as of

the date first above written:

CITIGROUP GLOBAL MARKETS INC.

CREDIT SUISSE SECURITIES (USA) LLC

Acting severally on behalf of themselves and the

several Initial Purchasers named in Schedule I to

the Purchase Agreement

 

By:   CITIGROUP GLOBAL MARKETS INC. By:  

/s/ David M. Mastrangelo

Name:   David M. Mastrangelo Title:   Managing Director

 

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