Foundry Agreement, Effective As of September 28, 2006

Exhibit 10.74

FOUNDRY AGREEMENT

This amended and restated FOUNDRY AGREEMENT (the " Agreement" ) is made and entered into as of the 28th day of September, 2006 by and between Fujitsu Limited, a corporation organized and existing under the laws of Japan, with a registered office at 1-1, Kamikodanaka 4-chome, Nakahara-ku, Kawasaki 211-8588 Japan (" Fujitsu" ); Spansion Inc., a corporation organized and existing under the laws of Delaware, with a registered office at 915 DeGuigne Drive, Sunnyvale, California 94088-3453, Spansion Technology, Inc., a corporation organized and existing under the laws of Delaware (" STI" ), with a registered office at 915 DeGuigne Drive, Sunnyvale, California 94088-3453, and Spansion LLC, a limited liability company organized and existing under the laws of Delaware (" Spansion LLC" ), with a registered office at 915 DeGuigne Drive, Sunnyvale, California 94088-3453, solely in their capacities as guarantors of Spansion' s obligations hereunder (collectively " Guarantors" ); and Spansion Japan Limited, a corporation organized and existing under the laws of Japan, with a registered office at 1-14 Nisshin-Cho, Kawasaki-ku, Kawasaki-shi, Kanagawa 210-0024 Japan (" Spansion" ). WHEREAS, Fujitsu has agreed to purchase certain assets of Spansion related to Spansion' s JV1 and JV2 semiconductor fabrication facilities located in Aizu-Wakamatsu, Japan pursuant to an Asset Purchase Agreement of even date herewith by and among Fujitsu, Spansion and the Guarantors (the " Asset Purchase Agreement" ); WHEREAS, in consideration of the foregoing purchase by Fujitsu, and as a condition to Fujitsu' s obligation to effect such purchase, Spansion is willing to commit to purchase specified quantities of Spansion' s products from Fujitsu, on the terms and conditions set forth in this Agreement; and

WHEREAS, Fujitsu is willing to provide such foundry services to Spansion, on the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements contained herein, Fujitsu and Spansion hereby agree as follows:

1. DEFINITIONS

When used in this Agreement, the following capitalized terms shall have the respective meanings set forth below:

1.1 " Affiliates" of a Party means any other person or entity which, directly or indirectly, controls, is controlled by, or is under common control with, such Party. 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 a Party only so long as such control relationship exists. For purposes of this Agreement, Fujitsu and its Affiliates shall not be deemed to be Affiliates of Spansion 1.2 " Agreed Die Yield" is defined in Section 6.1.


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1.3 " Asset Purchase Agreement" means the Asset Purchase Agreement dated September 28, 2006 between Fujitsu and Spansion.

1.4 " Background IP Rights" means any Intellectual Property Rights which are (a) owned by Spansion or any of its Affiliates as of the Effective Date, or (b) conceived, developed, written, or otherwise created (other than by any Seconded Employee) or acquired by Spansion or any of its Affiliates on or after the Effective Date.

1.5 " Best Efforts" shall mean the efforts that a prudent Person desiring to achieve a particular result would use in order to achieve such result reasonably expeditiously. An obligation to use " Best Efforts" does not require the Person subject to such obligation to take actions that would result in a materially adverse change in the benefits to such Person under this Agreement.

1.6 " Confidential Information" shall mean information or materials disclosed to a Party by the other Party that are identified as, or provided under circumstances indicating the information or materials are, confidential or proprietary. 1.7 " Development" means any Intellectual Property Rights or Technology conceived, developed, written, or otherwise created by any employees or contractors of a Party, whether solely or jointly with others, after the Effective Date and during the Term, but expressly excluding Background IP Rights. For purposes of this definition and Section 13: (i) all Seconded Employees who are to be transferred to Fujitsu pursuant to Section 3.1 of the Secondment Agreement shall be deemed to be employees of Fujitsu; and (ii) all Seconded Employees who are to return to Spansion pursuant to Section 2 and Section 3.1.2 of the Secondment Agreement shall be deemed to be employees of Spansion.

1.8 " Die" means an individual integrated circuit or components which when completed create an integrated circuit.

1.9 " Effective Date" means the date of the closing of the transactions contemplated by the Asset Purchase Agreement.

1.10 " Equipment Lease Agreement" means the Master Lease Agreement dated September 28, 2006 between Fujitsu and Spansion.

1.11 " Gross Die per Wafer" or " GDW" means the total quantity of Die candidates on each Wafer, whether or not the Die is operational when the Wafer has completed the manufacturing process. 1.12 " Initial Period" is defined in Section 2.1.

1.13 " Intellectual Property Rights" means, on a world-wide basis, any and all now known or existing, or hereafter known or existing, tangible and intangible (a) rights associated with works of authorship, including copyrights, moral rights and mask-works, (b) rights associated with trademarks, service marks, trade names, logos and similar rights, (c) trade secret rights, including rights in know-how and confidential and proprietary information, (d) rights in patents, designs and utility models and other industrial property rights, (e) rights in domain names; (f) all other intellectual and industrial property rights of every kind and nature and however designated, whether arising by operation of law, contract,


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license or otherwise, and (g) all registrations, applications, renewals, extensions, continuations (including continuations in part), divisions, reexaminations or reissues thereof now or hereafter existing, made or in force (including any rights in any of the foregoing).

1.14 " Jointly Developed Technology" shall have the meaning set forth in Section 13.2.

1.15 " JV1/JV2" shall mean, collectively, the Fujitsu semiconductor fabrication facilities located in Aizu-Wakamatsu, Japan, known as JV1 and JV2. 1.16 " JV3" shall mean the Spansion semiconductor fabrication facilities located in Aizu-Wakamatsu, Japan known as JV3. 1.17 " Net Die per Wafer" or " NDW" means the total quantity of Die on a Wafer that pass the Probe Program applicable to that Wafer.

1.18 " Party" means either of Fujitsu or Spansion, and " Parties" means both Fujitsu and Spansion.

1.19 " Person" shall mean any person or entity, whether an individual, trustee, corporation, partnership, limited partnership, limited liability company, trust, unincorporated organization, business association, firm, joint venture, other legal entity or governmental authority. 1.20 " Price A" has the meaning set forth on Exhibit H . 1.21 " Price B" has the meaning set forth on Exhibit H . 1.22 " Probe Program" means the specific set of electrical and mechanical tests as set forth in Exhibit C attached hereto which test the electrical operational characteristics for each Die on a Wafer.

1.23 " Process Technology" shall mean the Technology used to manufacture semiconductor wafers, but not any Technology related to integrated circuit design, sort, testing, circuitry or other Technology specific to the integrated circuits being manufactured. 1.24 " Qualified Process" shall mean Spansion' s proprietary wafer fabrication processes, excluding (i) sort testing and (ii) any technology related to the circuitry contained within, or the functionality of the Spansion product.

1.25 " Quarter" shall mean the three month accounting period that Spansion uses for financial accounting and reporting purposes.

1.26 " Seconded Employee" has the meaning ascribed to such term in the Secondment and Transfer Agreement dated September 28, 2006, between Fujitsu and Spansion. 1.27 " Secondment Agreement" means that certain Secondment and Transfer Agreement, dated September 28, 2006 by and between Spansion and Fujitsu.


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1.28 " Secondment Period" has the meaning ascribed to such term in the Secondment Agreement.

1.29 " Specifications" shall mean the written specifications for Wafers as set forth in Exhibit C attached hereto. Spansion represents that all of the Wafers can be manufactured in conformity with the Specifications at JV1/JV2 using the Qualified Process and the equipment purchased or leased by Fujitsu pursuant to the Asset Purchase Agreement, the Assigned Leases (as defined therein) or the Master Lease Agreement attached to the Asset Purchase Agreement.

1.30 " Technology" means all computer software (in source code or object code form), documentation, works of authorship, mask works, know-how, data and data bases, formulas, algorithms, processes, inventions and discoveries (whether or not patented), ideas, concepts, techniques, methods, content, technical information, engineering, production and other designs, drawings, schematics, specifications, confidential information, and all other information, technology and materials, tangible or otherwise

1.31 " Term" has the meaning set forth in subsection 16.1.1. 1.32 " Unsorted Wafer Amount" has the meaning set forth on Exhibit H . 1.33 " Wafer Amount" has the meaning set forth on Exhibit H . 1.34 " Wafer Price" is defined in Section 6.3.

1.35 " Wafers" shall mean unsorted eight inch (8" ) diameter silicon wafers listed on Exhibit A attached hereto manufactured by Fujitsu for Spansion hereunder using a Qualified Process. Spansion represents that all of the Wafers can be manufactured at JV1/JV2 using the Qualified Process and the equipment purchased or leased by Fujitsu pursuant to the Asset Purchase Agreement, the Assigned Leases (as defined therein) or the Master Lease Agreement attached to the Asset Purchase Agreement.

2. CAPACITY AND PURCHASE COMMITMENTS 2.1 The initial period for Wafer purchases under this Agreement (the " Initial Period" ) shall begin on the Closing Date (as defined in the Asset Purchase Agreement) and end on the final day of the second Quarter of 2008, inclusive. Spansion shall purchase, on a quarterly basis, the numbers of Wafers corresponding to the ranges for each Quarter during the Initial Period set forth on Exhibit D attached hereto. If the foregoing Closing Date falls within, but not at the start of, a Quarter listed on Exhibit D attached hereto, the numbers of Wafers for that Quarter set forth on Exhibit D shall be reduced pro rata in proportion to the number of days remaining in that Quarter relative to the total number of days in that Quarter. Fujitsu shall make available to Spansion, manufacturing capacity sufficient to permit Spansion to satisfy the foregoing purchase commitment.

2.2 If, for any Quarter during the Initial Period, Spansion fails to purchase hereunder the minimum number of Wafers for that Quarter, as set forth on Exhibit D (the " Minimum Purchase Commitment" ), then Spansion shall pay Fujitsu an amount equal to the product obtained by multiplying (i) .66, by (ii) the average Wafer Price in effect for that Quarter, by (iii) the difference between (x) the Minimum Purchase Commitment, and (y) the


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number of Wafers actually purchased by Spansion hereunder during that Quarter. Spansion shall not be obligated to make any payment to Fujitsu pursuant to this Section 2.2 with respect to any Quarter during the Initial Period in which Fujitsu fails to make available to Spansion, manufacturing capacity sufficient to permit Spansion to satisfy the Minimum Purchase Commitment for that Quarter.

2.3 If, for any Quarter during the Initial Period, (a) Spansion has submitted a Wafer Demand Plan (as defined below) for Wafers to be manufactured and delivered during that Quarter in accordance with Section 5.2 and in an amount that equals or exceeds the Minimum Purchase Commitment for that Quarter, and (b) Fujitsu fails to make available to Spansion, the Minimum Purchase Commitment, then Fujitsu shall pay Spansion an amount equal to the product obtained by multiplying (i) .66, by (ii) the average Wafer Price in effect for that Quarter, by (iii) the difference between (x) the Minimum Purchase Commitment, and (y) the number of Wafers actually manufactured by Fujitsu for Spansion hereunder during that Quarter.

2.4 Any payment due under Section 2.2 or 2.3 shall be fully offset by the amount, if any, of all salary and benefit costs to be reimbursed by Fujitsu or its designated Affiliate pursuant to Sections 2.3 and 2.4 of the Secondment Agreement and associated with any Seconded Employee returned early to Spansion pursuant to Section 2.1.4(v) of the Secondment Agreement for the period beginning on the date of such Seconded Employee' s early return to Spansion and ending on the expiration date of such Seconded Employee' s Secondment Period (as set forth on Schedule 2.1.1 of the Secondment Agreement). The amounts, if any, payable pursuant to Section 2.2 and Section 2.3 shall be computed by Fujitsu on a Quarterly basis during the Initial Period. Fujitsu shall provide a statement, in reasonable detail, to Spansion within thirty (30) days after the end of any Quarter during the Initial Period for which Fujitsu believes such a payment may be due. If Spansion disagrees with Fujitsu' s statement, Spansion shall so notify Fujitsu in writing within thirty (30) days of its receipt of the statement. If Spansion does not dispute the statement within the foregoing thirty (30) day period, the statement shall be deemed accepted, and Fujitsu or Spansion, as the case may be, will make the payment called for by the statement within thirty (30) days of the end of Spansion' s review period. If Spansion disputes the statement in writing during the foregoing review period, then the matter shall be resolved in accordance with the procedures set forth in Section 21 below. 2.5 If Spansion' s requirements for Wafers during the Initial Period exceed the ranges set forth on Exhibit D attached hereto, Fujitsu and Spansion will address the issue as provided in Section 5.3.

2.6 The second period for Wafer purchases under this Agreement (the " Subsequent Period" ) shall be comprised of the third Quarter of 2008 through the fourth Quarter of 2009, inclusive. Fujitsu and Spansion will negotiate in good faith to agree by December 31, 2007 upon (i) Spansion' s purchase commitment for the Subsequent Period (the " Subsequent Period Commitment" ), (ii) Wafer prices for the Subsequent Period (the " Subsequent Period Price" ), and (iii) any remedy available to (x) Fujitsu in case of failure by Spansion to satisfy its minimum purchase commitment, and (y) Spansion in case of failure by Fujitsu to make available to Spansion the corresponding minimum manufacturing capacity (the " Subsequent Period Remedies" ). Notwithstanding the foregoing, it is agreed as follows with respect to the Subsequent Period:


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2.6.1 Each of Fujitsu and Spansion shall prepare in writing and deliver to the other, by no later than November 6, 2007, with respect to Spansion, a good faith Wafer Demand Plan for the Subsequent Period in accordance with Section 5.2 , and with respect to Fujitsu, its own wafer demand plan (collectively, the " Subsequent Period Wafer Demand Plan" ).

2.6.2 If, by no later than December 31, 2007, Spansion agrees to the Fujitsu requested minimum purchase commitments for the Subsequent Period as set forth on Exhibit E attached hereto, then the Subsequent Period Price will remain as set forth in Exhibit B and the Subsequent Period Remedies will remain as set forth in Section 2.2 and 2.3 , subject to adjustment as provided in Section 6.4 , Spansion shall not terminate leases early as set forth in Section 2.6.5 below, and such Fujitsu requested minimum purchase commitments shall thereafter constitute the Minimum Purchase Commitments for purpose of this Agreement. In the event that the parties cannot agree by December 31, 2007, on the Subsequent Period Commitment under this Section 2.6.2 , then, subject to Section 2.6.3 and 2.6.4 , Fujitsu shall not be required to provide the Spansion desired minimum purchase commitments set forth on Exhibit E attached hereto and Spansion shall not be required to make the minimum purchase commitments set forth on Exhibit E attached hereto.

2.6.3 Even if Spansion does not agree to the Fujitsu requested minimum purchase commitments on Exhibit E attached hereto, so long as the parties can agree on the Subsequent Period Price, Fujitsu will provide the Spansion desired minimum purchase commitments on Exhibit E attached hereto during the Subsequent Period, provided, however , that it is agreed that (x) Spansion shall not terminate leases early as set forth in Section 2.6.5 below if such termination would impair Fujitsu' s ability to satisfy both its minimum manufacturing capacity commitment to Spansion at any time during the Subsequent Period and Fujitsu' s own manufacturing capacity needs at any time during the Subsequent Period, (y) Subsequent Period Remedies shall remain as set forth in Section 2.2 and 2.3 , and (z) such Spansion desired minimum purchase commitments shall thereafter constitute the Minimum Purchase Commitments for purposes of this Agreement. In the event that the parties cannot agree by December 31, 2007, on the Subsequent Period Price under this Section 2.6.3 , then, subject to Section 2.6.2 and 2.6.4 , Fujitsu shall not be required to provide the Spansion desired minimum purchase commitments set forth on Exhibit E attached hereto and Spansion shall not be required to make the minimum purchase commitments set forth on Exhibit E attached hereto.

2.6.4 If the projected combined demand for wafers by Spansion and Fujitsu as set forth in the Subsequent Period Wafer Demand Plan is less than Wafer Amount for the Subsequent Period, then Fujitsu will develop and provide to Spansion a revised Fujitsu requested minimum purchase commitment for the Subsequent Period in lieu of the Fujitsu requested minimum purchase commitment set forth on Exhibit E attached hereto. If Spansion agrees to that proposal, then the parties will negotiate the Subsequent Period Price pursuant to Section 6 , but the manufacturing capacity of JV1/JV2 may be limited to Unsorted Wafer Amount in total for the combined Spansion and Fujitsu demand during the entire Subsequent Period. In the event that the parties cannot agree by December 31, 2007, on the Subsequent Period Price, the Subsequent Period Commitment, and the Subsequent Period Remedies under this Section 2.6.4 , then, subject to Section 2.6.2 and 2.6.3 , Fujitsu shall not be required to provide the Spansion desired minimum purchase commitments set forth on Exhibit E attached hereto and Spansion shall not be required to make the minimum purchase commitments set forth on Exhibit E attached hereto.


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2.6.5 Subject to Section 2.6.2 and 2.6.3 , if (A) the projected combined demand for wafers by Spansion and Fujitsu as set forth in the Subsequent Period Wafer Demand Plan is less than Wafer Amount for the Subsequent Period or (B) the actual agreed upon Subsequent Period Commitment together with Fujitsu' s projected demand is less than Wafer Amount for the Subsequent Period, then each of Spansion and Fujitsu shall have a right, in accordance with the terms of the Equipment Lease Agreement, to terminate the Equipment Lease Agreement for some or all of the leased equipment effective June 30, 2008, by giving notice to the other party prior to December 31, 2007 (an " Early Termination" ); provided, however, that (a) in the event of a partial lease termination by either party, Fujitsu may select the specific equipment as to which the Equipment Lease Agreement will be terminated, subject to Spansion' s consent, not to be unreasonably withheld or delayed, and (b) the manufacturing capacity of JV1/JV2 during the Subsequent Period, including, without limitation, during calendar year 2009, may be limited to Unsorted Wafer Amount in total for the combined Spansion and Fujitsu demand. 2.6.6 Further in the event of an Early Termination, it is understood and agreed that (i) in fulfilling a total manufacturing capacity of Unsorted Wafer Amount in total at JV1/JV2, Fujitsu will have reasonable discretion to utilize or close any portion of the JV1/JV2 buildings or other facilities in order to avoid incurring unnecessary costs, so long as Fujitsu continues to meet its obligations as set forth in this Agreement, and (ii) Fujitsu may at any time terminate the leases under the Equipment Lease Agreement with respect to any leased equipment that Fujitsu reasonably determines is no longer required so long as the termination is in accordance with the Equipment Lease Agreement.

2.7 The payments provided for in Section 2.2 and Section 2.3 above shall be Fujitsu' s and Spansion' s, respectively, sole remedies for (i) Spansion' s failure to satisfy the Minimum Purchase Commitment for the Initial Period or any minimum purchase commitment applicable to the Subsequent Period, and (ii) Fujitsu' s failure to make available to Spansion the Minimum Purchase Commitment for the Initial Period or any minimum manufacturing capacity applicable to the Subsequent Period. Notwithstanding anything to the contrary set forth in this Agreement, Fujitsu shall have no liability or payment obligations whatsoever for failure to make manufacturing capacity available to Spansion if such failure results from (x) the ...