Exhibit 10.9

 

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 ADVANCED MICRO DEVICES, INC., a
Delaware corporation (“AMD”), on behalf of itself and its Affiliates. Spansion
and AMD 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 Agreement dated as
of June 30, 2003 (the “Effective Date”); and

 

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

 

NOW, THEREFORE, in consideration of the mutual representations, covenants and
other terms and conditions contained herein, the Parties hereby amended 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

 

1

--------------------------------------------------------------------------------

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 “either Party” and/or the “other
Party,” etc. shall be deemed to refer to AMD 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 AMD to provide Services in accordance with
the Service Levels and any material breach by AMD 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 AMD Services Advisor and Fujitsu 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 AMD 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 AMD 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 AMD Services Advisor and Fujitsu Services Advisor. The Spansion Services
Manager will report to and be supervised by a member of the senior management of
Spansion.

 

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

 

3.4 Fujitsu Services Advisor. Fujitsu shall appoint at Fujitsu’s expense an
individual (the “Fujitsu Services Advisor”) who will serve as the primary
Fujitsu representative to Spansion regarding Spansion’s receipt of the Services.
The Fujitsu Services Advisor will serve

 

2

--------------------------------------------------------------------------------

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

 

3.5 Information Exchange and Information Rights. Spansion shall keep AMD
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. AMD
will provide to the Fujitsu Services Advisor copies of all reports and other
written information relating specifically to the Services that AMD provides
Spansion herein, at the same time AMD 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 Fujitsu Services Advisor’s reasonable
request, the Spansion Services Manager shall provide the Fujitsu Services
Advisor additional information regarding the performance of the Services and the
associated Fees. AMD and Spansion, through the AMD Services Advisor and the
Spansion Services Manager, will give notice, and otherwise keep the Fujitsu
Services Advisor informed, of all proposals and discussions between the Spansion
Services Manager and the AMD 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, AMD and Spansion will, upon the Fujitsu
Service Advisor’s request and subject to applicable confidentiality
restrictions, grant access to the Fujitsu Service Advisor to any meeting,
whether telephonic or in-person, between the Spansion Services Manager and the
AMD 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 Fujitsu 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) AMD 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
Fujitsu Services Advisor will notify the Spansion Services Manager in writing.
If after a reasonable period of time the Fujitsu Services Advisor does not
believe that the concern raised has been adequately addressed, the Fujitsu
Services Advisor shall be entitled to notify Spansion’s Board of Directors (the
“Board of Directors”) of the Fujitsu 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 AMD Services

 

3

--------------------------------------------------------------------------------

Advisor. The Board of Directors shall consider the Fujitsu Service Advisor’s
concerns in good faith and may take any action it deems reasonable in the
circumstances.

 

3.7 Contract Amendments.

 

(a) Spansion and AMD 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 Fujitsu maintains at least a ten percent (10%) Aggregate
Ownership Interest, AMD and Spansion may not amend this Agreement without the
prior written consent of Fujitsu (such consent not to be unreasonably
conditioned, delayed or withheld) to the extent an amendment: (i) reduces the
rights of the Fujitsu Services Advisor; (ii) reduces Fujitsu’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 AMD’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 AMD’s obligation to treat Spansion on par with
other AMD divisions and Affiliates (taking into account that this Agreement
provides for a cost plus allocation budgeting structure that may not apply to
other AMD 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 AMD by making available,
as requested by AMD, management decisions, information, approvals or
disapprovals, and acceptances or rejections in a reasonably timely manner so
that AMD 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

 

4

--------------------------------------------------------------------------------

or Systems may constitute Changes; as part of the routine operation of Spansion
and AMD, modifications that are not material or significant, as determined by
AMD in its reasonable judgment, may be conducted without recourse to the Change
Control Procedures; provided that the Spansion Services Manager is notified — on
a regular basis consistent with AMD’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 Fujitsu Services Advisor.

 

(ii) Schedule. Unless otherwise agreed by Spansion, with respect to all Changes,
AMD 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. AMD shall implement and maintain a continuously
updated, electronic log of such emergency Changes that will be accessible to the
Spansion Services Manager and the Fujitsu Services Advisor at all times.

 

(iii) Meetings. The AMD 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 Fujitsu Services Advisor written notice of this meeting and the Fujitsu
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 AMD
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 AMD
receives a request from Spansion for a Change, either AMD 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 AMD’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. AMD 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, AMD 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 AMD 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 AMD that
Spansion

 

5

--------------------------------------------------------------------------------

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.

 

(ii) Changes Initiated by AMD. Concurrent with the submission of a request for a
Change by AMD, either AMD 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 AMD that Spansion desires to discuss the Change Proposal
further, or reject the requested Change. Spansion’s failure to approve the
Change Proposal or notify AMD 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 AMD 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 Fujitsu
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 AMD that Spansion desires to
discuss the proposed Change further, the Spansion Services Manager and AMD
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 Fujitsu Services Advisor
of the proposed meeting and the Fujitsu 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 are only for
Location Based Services and not for Enterprise Services and such Changes do not
relate to AMD-proprietary Software or Systems, do not affect the AMD
Infrastructure, the provision of Services, and would not result in the breach of
an obligation that AMD may have with a third party. Spansion will notify AMD
when Spansion is considering seeking proposals from third parties regarding
Changes and provide AMD the first opportunity to perform the Change. In the
event AMD 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 AMD
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.

 

6

--------------------------------------------------------------------------------

(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 AMD may implement such Change immediately upon
notice to Spansion, with a copy to the Fujitsu Services Advisor. Any change in
Fees, any System purchases for which AMD seeks reimbursement from Spansion, or
any long-term, material degradation in Service Levels resulting from such
Change, unless such degradation is unavoidably required in the circumstances (in
which event AMD 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. AMD, 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”). The Services will include those services and
Systems that AMD will also provide Spansion that AMD also provides on an
enterprise-wide basis for AMD facilities generally (“Enterprise Services”) as
well as Spansion Service Location-specific services and Systems that may be
unique to any such Service Location (“Location Based Services”). AMD 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 AMD business unit, division or AMD Affiliate
receiving similar services from AMD (or an AMD subcontractor), subject to any
deviations agreed to by the Parties to address Spansion’s specific requirements
as communicated to AMD and taking into account that this Agreement provides for
a cost plus allocation budgeting structure that may not apply to other AMD
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 AMD 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 AMD 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 AMD’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 and conformity with AMD Systems, 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 AMD Infrastructure will excuse any AMD 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 AMD to

 

7

--------------------------------------------------------------------------------

assist Spansion’s return to compliance. AMD agrees to notify Spansion upon AMD’s
discovery of any such non-compliance and will continue to provide all Services
to the extent unaffected by such non-compliance. AMD will provide Spansion
advance notice of any AMD Infrastructure changes, including technology upgrades,
that may require Spansion to make changes to its own technical architecture.

 

4.3 Governmental Approvals. AMD shall obtain and maintain all Governmental
Approvals required for AMD to deliver the Services under this Agreement.
Spansion shall obtain and maintain all Governmental Approvals required for
Spansion to use the Services under 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 AMD’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 AMD’s delivery of Services, AMD and Spansion shall work
together pursuant to the Change Control Procedures to identify the impact of
such changes on AMD’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. AMD
will use reasonable efforts to minimize the incremental cost to Spansion of
compliance with such Laws.

 

4.5 Compliance With Laws. AMD 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 AMD with any such Laws occurs, AMD
shall promptly notify Spansion of such charge in writing and AMD shall promptly
remedy such non-compliance in accordance with Law.

 

4.6 Subcontractors. Spansion acknowledges that AMD may outsource to a third
party or third parties the performance of some or all of the Services that AMD
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 AMD to perform any Services outside of
the United States and to the extent that Services will be performed outside the
United States, AMD 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 AMD from its responsibility
for its obligations under this Agreement. AMD shall be responsible for the work
and activities of each of the AMD Agents, including compliance with the terms of
this Agreement. AMD shall be responsible for all payments to its subcontractors
unless the Parties agree that Spansion will pay directly to an AMD Affiliate
providing Services to Spansion.

 

4.7 Spansion Agents. AMD 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 Fujitsu to the extent that Fujitsu supplies
similar or complementary services to

 

8

--------------------------------------------------------------------------------

Spansion. AMD will promptly notify Spansion if Fujitsu or any Spansion Agent act
or omission will cause, or has caused, a problem or delay in providing the
Services. AMD 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 Fujitsu; provided such interference was
not at the direction of AMD; and provided that AMD 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
AMD’s obligations under this Agreement as soon as practicable.

 

4.8 AMD Monitoring and Reporting; Monitoring Tools. In accordance with the
schedules set forth in Exhibit 6.1, or if not specified therein, when AMD
generates the reports for itself, but no less frequently than quarterly, AMD
shall measure and report to Spansion, with a copy to the Fujitsu Services
Advisor, AMD’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 AMD’s compliance with the Service Levels;
unless otherwise agreed by the Parties, AMD may determine the format and level
of detail contained in any such reports (provided such detail is sufficient in
accordance with the foregoing). If AMD makes available additional services
monitoring reports and/or tools to other AMD business units or AMD Affiliates to
monitor and/or report on services similar to the Services, AMD 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 AMD’s Service Level
performance report pursuant to Section 4.8, Spansion may also independently
analyze AMD’s compliance with the Service Levels and provide AMD feedback
regarding AMD’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 AMD 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 AMD’s participation in
the benchmarking process and such participation results in incremental work to
be performed by AMD that was not otherwise included in the budget, then AMD will
be entitled to charge Spansion at the Spansion T&M Rates or other
mutually-agreed rates for AMD’s participation in the benchmarking process.

 

5. SPECIAL PROJECTS

 

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

 

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

 

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

 

9

--------------------------------------------------------------------------------

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

 

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

 

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

 

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

 

AMD 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 AMD reasonably
believes that a proposed Special Project would negatively affect the Services,
the AMD Infrastructure, any AMD proprietary Software or AMD’s implementation of
third party Software, either by reducing its performance or functionality, or
increasing the cost to AMD, and Spansion still desires to continue with the
Special Project despite AMD’s objections, the AMD 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 Fujitsu 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 is only
for Location Based Services and not for Enterprise Services and the Special
Project does not relate to AMD-proprietary Software or Systems, does not affect
the AMD Infrastructure, the provision of Services, and would not result in the
breach of an obligation that AMD may have with a third party. Spansion will
notify AMD of any proposal that Spansion wants to make to a third party to
perform a Special Project instead of having AMD perform that Special Project. If
the Parties do not agree upon terms by which AMD will perform a Special Project,
or if AMD objects to Spansion retaining a third party to perform the Special
Project because AMD reasonably believes in good faith that such Special Project,
or the third party’s performance of that Special Project, will negatively affect
the Enterprise Services, the AMD Infrastructure, any AMD proprietary Software or
AMD’s implementation of third party Software, either by reducing its performance
or functionality, or increasing the cost to AMD, or by causing AMD 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 AMD 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”), AMD shall perform the Services at a
minimum in conformance with the Service Levels identified on Exhibit 6.1 (the
“Service Levels”).

 

10

--------------------------------------------------------------------------------

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 Fujitsu Services Advisor,
initiate negotiations to review and adjust any Service 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) AMD 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) AMD 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), AMD
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 AMD 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 AMD. 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 AMD
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
an AMD-maintained System, AMD 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 AMD has failed to perform its obligations under Section 6.4 and
Exhibit 6.4, the Spansion Services Manager may initiate contact with the AMD
Services Advisor to discuss the

 

11

--------------------------------------------------------------------------------

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 AMD 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 Fujitsu 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.

 

(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 AMD chief information
officer 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 AMD 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 AMD
in order to remedy the material breach. The Board of Directors shall consider
the measures proposed by the Spansion officer against AMD 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 AMD believes that such measures are
inappropriate, AMD 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 AMD 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 AMD 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
AMD receives service level credits from a third party outsourcer regarding
Services AMD provides Spansion under this Agreement, AMD will apportion any
service level credits it receives to Spansion in a manner proportionate to
Spansion’s cost allocation by AMD for the affected Service, and any

 

12

--------------------------------------------------------------------------------

such credit will offset the next payment obligation of Spansion (to the extent
of the credit) which follows AMD’s accrual of such credit. AMD will promptly
notify Spansion of any such credits.

 

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 AMD Service Locations as established on the Effective
Date or subsequently changed in accordance with the terms hereof. In the event
AMD 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 AMD and any costs incurred in
connection with the performance or use of the Services, in each case as a result
of AMD’s relocation to, or use of, any different Service Locations at AMD’s
request, shall be paid by AMD or reimbursed to Spansion by AMD. Any incremental
expenses incurred by Spansion or AMD 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 AMD 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 comply with Section 4.2 and will
not otherwise adversely impact AMD’s ability to provide the Services in
accordance with the Service Levels. AMD 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 AMD in providing the Services. AMD 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 AMD. AMD
shall work with Spansion to mitigate the effects of such degradation.

 

(b) Spansion Facilities.

 

(i) For so long as AMD 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 AMD 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 AMD’s performance of the
Services. Use of Spansion Service Locations by AMD does not constitute a
leasehold interest in favor of AMD, and AMD shall not have exclusive access or
control of the space provided to AMD under this Agreement.

 

13

--------------------------------------------------------------------------------

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

 

(iii) AMD shall permit Spansion and Spansion Agents to enter into those portions
of the Spansion Service Locations occupied by AMD’s staff at any time to perform
facilities-related services. Spansion shall ensure that Spansion and Spansion
Agents shall not interfere with AMD’s performance of Services while exercising
access rights under this Agreement, and AMD 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 AMD Personnel. While at the Spansion Service Locations, AMD and
AMD 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 AMD from time to
time and (b) otherwise conduct themselves in a businesslike manner. If Spansion
notifies AMD that a particular member of the AMD Personnel is not conducting
himself or herself in accordance with this Section, AMD shall promptly (y)
investigate the matter and take appropriate action which may include (i)
removing the applicable personnel from the AMD 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 AMD Personnel, AMD shall
promptly remove the individual from the AMD Personnel.

 

7.4 Safety and Security Procedures.

 

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

 

(b) AMD will promptly notify Spansion if any Spansion failure to maintain and
enforce (except for enforcement with respect to AMD Personnel) physical safety
and security procedures at Spansion Service Locations will cause, or has caused,
a material problem or delay for AMD in providing the Services. AMD 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 AMD
Personnel) physical safety and security procedures at Spansion Service
Locations; provided that AMD 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 AMD’s obligations under
this Agreement as soon as practicable.

 

14

--------------------------------------------------------------------------------

7.5 Data Security.

 

(a) AMD shall establish and maintain for Spansion environmental, security, and
other safeguards against the destruction, loss or alteration of Spansion Data in
the possession of AMD 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) AMD’s data security policies and
procedures adopted for AMD in effect as of the Amendment Date or any updated
policies and procedures as AMD may subsequently adopt, and (B) the safeguards
required to meet any higher standard otherwise agreed by the Parties; and (ii)
with respect to the AMD 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 AMD Service Locations or any updated policies and procedures as AMD may
subsequently adopt, and (B) the safeguards required to meet any higher standard
otherwise agreed upon by the Parties.

 

(b) AMD 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 AMD or AMD Agents discover or are notified of a breach or
potential breach of security relating to Spansion Data (whether by AMD or third
parties), AMD 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 AMD or AMD Agents at the time of such breach or potential breach,
AMD shall investigate and remediate the effects of the breach or potential
breach. As a part of AMD’s remediation efforts, if AMD reasonably believes that
recurrences of the breach of security could be prevented by a Change, AMD may
propose the Change.

 

8. CONTINUED PROVISION OF SERVICES

 

8.1 Disaster Recovery Plan. AMD will maintain a mutually-accepted disaster
recovery plan (“DRP”) having the charactersistics (including targeted time
periods) set forth in Exhibit 8.1. Without limiting AMD’s other obligations
under this Agreement, including the Service Levels, in the event of an
interruption in Services, AMD 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

 

15

--------------------------------------------------------------------------------

reasonable detail the nature of the Force Majeure Event. The occurrence of a
Force Majeure Event does not excuse, limit or otherwise affect AMD’s obligation
to provide either normal recovery procedures or any other disaster recovery
services described in Section 8.1, except to the extent AMD is prevented,
hindered or delayed from such performance by a Force Majeure Event and AMD
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 AMD is thereafter able to resume providing such
Service, Spansion will again retain AMD to provide such Service in accordance
with this Agreement.

 

9. ASSIGNED AND MANAGED AGREEMENTS

 

9.1 Assigned Agreements. If the Parties agree that AMD 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. AMD shall assume all responsibility (including all obligations and
post-assignment liability) for the Assigned Agreements. AMD 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. AMD 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 AMD, AMD 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 AMD 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 AMD as
its representative for matters relating to the management, administration, and
maintenance of the Managed Agreements to the extent necessary for AMD to perform
its obligations under this Agreement. AMD shall assist Spansion in notifying all
appropriate third parties of AMD’s role with respect to the Managed Agreements.
AMD 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. AMD shall provide Spansion with reasonable notice of any renewal,
termination or cancellation dates and fees with respect to the Managed
Agreements. AMD shall not renew, modify, terminate, or cancel, or request or

 

16

--------------------------------------------------------------------------------

grant any consents or waivers under, any Managed Agreements without the consent
of the Spansion Services Manager. Other Spansion agreements may be managed by
AMD and become Managed Agreements governed by this Section 9.3 upon the mutual
agreement of the Parties. Spansion shall provide AMD with complete copies of all
Managed Agreements, including any modifications to such agreements as required
for AMD to manage such agreements.

 

9.4 Managed Agreement Invoices. Subject to Section 9.3, AMD 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, AMD receives such invoices in a timely manner.

 

9.5 Performance Under Agreements. AMD shall promptly notify Spansion of any
breach of, or misuse or fraud in connection with, any Managed Agreements of
which AMD 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. AMD 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 AMD’s
performance of its obligations under this Agreement, AMD will promptly notify
Spansion. AMD 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 AMD 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 AMD’s obligations
under this Agreement as soon as practicable, and unless AMD materially failed to
perform its management obligations with respect to such vendor related to the
Vendor Action. If AMD obtains damages or other remedies from a vendor in
connection with the Vendor Action, AMD will pass on the amount of such damages
or remedies to Spansion.

 

9.7 Consents. AMD, at its own expense, shall obtain, maintain, and comply with
all of the AMD Consents. AMD shall also comply with the Spansion Consents.
Spansion shall obtain, maintain, and comply with all of the Spansion Consents;
provided, however, that AMD 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, AMD 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 AMD to
provide the Services as

 

17

--------------------------------------------------------------------------------

of the Effective Date. Any Spansion Consents obtained by AMD 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.

 

10. PAYMENTS AND INVOICING

 

10.1 Fees.

 

(a) In consideration of AMD providing the Services, Spansion shall pay to AMD
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 AMD 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. AMD 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, AMD 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 AMD 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 AMD for the period covered by such invoice.

 

10.5 Time of Payment. AMD’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

 

18

--------------------------------------------------------------------------------

were provided or the expenses incurred. Any other sum due AMD pursuant to this
Agreement shall be due and payable within forty-five (45) days after receipt by
Spansion of an invoice from AMD. All payments will be made via wire transfer or
other mutually-acceptable means.

 

10.6 Fee Dispute. Within thirty (30) days after Spansion’s receipt of each
invoice, Spansion shall give notice to AMD 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. AMD will calculate Fees and costs charged to Spansion
using a cost allocation methodology that accurately and fairly reflects AMD’s
reasonable, good faith forecasts of its actual costs associated with providing
the Services 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 AMD provides for itself, for Spansion and for any other
division or Affiliate of AMD. AMD agrees that the target of the Fees and costs
charged to Spansion will be AMD’s actual costs in performing the Services. AMD
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 AMD’s actual costs. In such
event and to such extent, AMD will not be deemed in breach of its obligation to
charge Fees based on its reasonable, good faith estimates of actual costs,
provided AMD 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 Parties agree that the cost
allocation methodologies set forth in Exhibit 10.7 for each of the three major
Spansion IT systems (Infrastructure, Business Systems and Manufacturing Systems)
are reasonable methodologies for purposes of the foregoing. 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, AMD 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 AMD will notify Spansion of the Spansion
T&M Rates for the next year. The Fujitsu Services Advisor may advise Spansion
regarding all such matters in the Fujitsu 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., AMD realizes substantial cost savings as the result of an outsourcing
transaction). As part of this quarterly

 

19

--------------------------------------------------------------------------------

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 AMD and Spansion and will apply prospectively
only.

 

10.10 Expenses. Spansion shall pay or reimburse AMD 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 Exhibit 10.3, AMD shall not charge
Spansion for any Reimbursable Expenses incurred by AMD 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 AMD to audit the security standards and disaster recovery methods
used by AMD 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 AMD to calculate the Fees, the
allocation of Fees and Pass Through Expenses, and to otherwise verify the
accuracy of the Fees and expenses that AMD charges Spansion for provision of
Services and Systems under this Agreement. Spansion may conduct one such audit
annually upon reasonable advance written notice to AMD delivered through the AMD
Services Advisor. AMD 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 AMD Services Advisor and the Fujitsu Services Advisor. Any copies provided
to the Fujitsu 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. AMD 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 AMD conducts an audit (either by
itself or through an independent auditor) of a third party providing any
Services (or any part thereof), AMD shall make all such audit results available
to Spansion promptly upon AMD’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 AMD 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 AMD after
such deduction or withholding. Spansion shall promptly furnish AMD with a copy
of an official tax receipt or other appropriate evidence of any withholding
taxes imposed on

 

20

--------------------------------------------------------------------------------

payments made under this Agreement. As part of this Agreement, Spansion shall
issue AMD such valid tax exemption certificate(s) for the various state and
local taxing authorities as Spansion may legally issue and AMD 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 AMD on the provision of the Services by AMD to Spansion or
on the Fees, however levied or assessed, Spansion shall reimburse AMD 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 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. AMD 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. AMD grants Spansion the right to pursue a separate
action against any governmental unit which asserts Transaction Taxes and AMD
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 AMD 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 AMD on behalf
of Spansion (with the consent of Spansion in connection with the Change Order
Procedures) in connection with AMD’s performance of Services under this
Agreement (provided Spansion obtains unencumbered title to such equipment). With
respect to any Software to be delivered to Spansion within the State of
California, for so long as there is a tax benefit to Spansion in the delivery
methods hereinafter described, AMD shall use commercially reasonable efforts to,
and shall use commercially reasonable efforts to cause any third party vendor
to, deliver any Software by means that minimize the tax attributable to the
delivery of such Software to Spansion.

 

21

--------------------------------------------------------------------------------

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

 

12. PROPRIETARY RIGHTS.

 

12.1 In General. The terms, conditions and license rights regarding AMD’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.

 

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 AMD and sublicensed to Spansion, or
whether Spansion will obtain the license to the Other Software directly with
sufficient rights for AMD to use the Other Software on Spansion’s behalf. If
licensed by AMD, 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 AMD 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, AMD shall reimburse Spansion for such amount,
due within ninety (90) days of Spansion’s notification to AMD thereof.

 

12.3 Developed Software and Work Product. All Developed Software and Work
Product created pursuant to AMD’s performance of Special Projects shall be owned
by AMD 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 AMD’s right in its Background Technology and to a grant-back
license to AMD.

 

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

 

22

--------------------------------------------------------------------------------

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.

 

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

 

23

--------------------------------------------------------------------------------

14.2 DISCLAIMER. EXCEPT AS SPECIFIED IN THIS SECTION 14, NEITHER SPANSION NOR
AMD 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.

 

16. TERMINATION

 

16.1 Service Termination. If AMD 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 AMD’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.
Notwithstanding the foregoing, if the Service at issue is an Enterprise Service,
then Spansion may not terminate such Service for a period of ninety (90) days
without adequate cure following initial notice of material breach. In the event
of a termination of an Enterprise Service, the Parties agree to work together to
mitigate the effect on other Services provided by AMD.

 

16.2 Termination for Cause.

 

(a) If AMD 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 AMD, 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 AMD under this Agreement and does
not cure such default within ninety (90) days after receipt of a notice of
default from AMD, then AMD 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. AMD 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) AMD 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,

 

24

--------------------------------------------------------------------------------

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 AMD Systems
leased by AMD and being used by AMD or AMD Agents solely to provide the Services
as of the End Date and (ii) the Assigned Agreements then in effect, AMD shall,
and shall cause AMD Agents to, transfer or assign such agreements to Spansion or
Spansion’s designees, on terms and conditions acceptable to all applicable
parties. If AMD cannot make such transfer after the exercise of reasonable
efforts to do so, AMD 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 AMD
from any liability under such third-party agreements arising after the date of
transfer or assignment thereof to the extent AMD is not otherwise released from
liability. Upon Spansion’s request, AMD 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, AMD shall sell to Spansion or its designee, on an
“as is, where is basis,” (i) the AMD Systems (other than AMD Systems leased by
AMD) being used by AMD or AMD Agents solely to perform the Services as of the
End Date and (ii) any assets transferred by Spansion to AMD or AMD 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. AMD 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 AMD 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.

 

25

--------------------------------------------------------------------------------

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 AMD, 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.

 

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 supercede 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

 

26

--------------------------------------------------------------------------------

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.

 

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 AMD:

 

Advanced MicroDevices, Inc.

One AMD Place M/S 150

P.O. Box 3453

Sunnyvale, CA 94086

Attention: General Counsel

Telephone: (408) 749-2400

Facsimile: (408) 774-7399

 

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

 

27

--------------------------------------------------------------------------------

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.

 

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, Fujitsu shall be deemed a third party beneficiary
to the rights of the Fujitsu Services Advisor herein and to Fujitsu’s rights
under Sections 3.5, 3.6 and 3.7(b), and Fujitsu shall have the right to directly
enforce such rights against AMD 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]

 

28

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each of Spansion and AMD 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 Advanced Micro Devices, Inc. By:   /s/
Hollis M. O’Brien

Name:

  Hollis M. O’Brien

Title:

  Corporate Vice President and Secretary

 

29

--------------------------------------------------------------------------------

 

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 AMD, except to the extent expressly provided in this Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

“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 AMD as of the
Effective Date or (b) conceived, developed, written, or otherwise created or
acquired by AMD 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 AMD Consents.

 

“Contract Year” means June 30, 2003 to December 28, 2003, and thereafter each
fiscal year during the remainder of the Initial 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) AMD, (b) AMD Agents, (c) AMD and/or AMD Agents and Spansion
and/or Spansion Agents jointly, or (d) AMD and/or AMD Agents and Spansion and/or
Spansion Agents jointly.

 

“Effective Date” means June 30, 2003.

 

“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” means Fujitsu limited, a company organized under the laws of Japan.

 

“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.

 

ii

--------------------------------------------------------------------------------

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

 

“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 AMD 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 AMD in the provision of the
Services, or Software used by Spansion in the receipt of the Services, excluding
any AMD 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 AMD 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 AMD,
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 AMD and AMD Agents.

 

iii

--------------------------------------------------------------------------------

“Spansion Consents” means all licenses, consents, permits, approvals and
authorizations that are necessary to allow (a) AMD and AMD 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) AMD to manage and administer the Managed Agreements pursuant to Section 9.3;
and (c) Spansion to assign to AMD the Assigned Agreements.

 

“Spansion Data” means all data and information (i) submitted to AMD or AMD
Agents by Spansion, or (ii) otherwise obtained by AMD or AMD 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 AMD Service Locations).

 

“Spansion Software” means Software owned or licensed by Spansion for which
Spansion has the right to provide access to AMD 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 AMD 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

 

iv

--------------------------------------------------------------------------------

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 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 AMD 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 AMD 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) AMD’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) AMD 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 AMD to Spansion or to a third party designated by Spansion; (d)
AMD providing reasonable training for personnel of Spansion or Spansion’s
designee in the performance of the Services then being transitioned to Spansion;
and (e) AMD 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.

 

v