10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2002

OR

¨   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to                 

Commission File Number 1-7882

ADVANCED MICRO DEVICES, INC.

(Exact name of registrant as specified in its charter)

Delaware	94-1692300
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer                 Identification No.)

One AMD Place Sunnyvale, California	94088
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (408) 732-2400

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x   No  ¨

The number of shares of $0.01 par value common stock outstanding as of July 19, 2002: 342,322,902

INDEX

	Page No.
Part I. Financial Information
Item 1. Financial Statements (unaudited)
Condensed Consolidated Statements of Operations— Quarters and Six Months Ended June 30, 2002 and July 1, 2001	3
Condensed Consolidated Balance Sheets— June 30, 2002 and December 30, 2001	4
Condensed Consolidated Statements of Cash Flows— Six Months Ended June 30, 2002 and July 1, 2001	5
Notes to Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3. Quantitative and Qualitative Disclosures About Market Risk	40
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders	41
Item 6. Exhibits and Reports on Form 8-K	42
Signature	43

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PART I.    FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

ADVANCED MICRO DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Thousands except per share amounts)

	Quarter Ended						Six Months Ended
	June 30, 2002			July 1, 2001			June 30, 2002			July 1, 2001
Net sales	$	600,299		$	985,264		$	1,502,372		$	2,174,011
Expenses:
Cost of sales		558,290			636,199			1,145,164			1,351,029
Research and development		178,425			171,114			350,307			328,874
Marketing, general and administrative		160,248			156,291			317,108			305,429
		896,963			963,604			1,812,579			1,985,332
Operating income (loss)		(296,664	)		21,660			(310,207	)		188,679
Interest income and other, net		8,661			12,308			18,199			31,131
Interest expense		(15,729	)		(20,199	)		(27,887	)		(41,844	)
Income before income taxes and equity in net income (loss) of joint venture		(303,732	)		13,769			(319,895	)		177,966
Provision (benefit) for income taxes		(121,493	)		3,717			(125,534	)		56,260
Income (loss) before equity in net income (loss) of joint venture		(182,239	)		10,052			(194,361	)		121,706
Equity in net income (loss) of joint venture		(2,699	)		7,300			260			20,483
Net income (loss)	$	(184,938	)	$	17,352		$	(194,101	)	$	142,189
Net income (loss) per common share:
Basic	$	(0.54	)	$	0.05		$	(0.57	)	$	0.44
Diluted	$	(0.54	)	$	0.05		$	(0.57	)	$	0.43
Shares used in per share calculation:
Basic		341,782			330,120			341,294			322,234
Diluted		341,782			340,533			341,294			332,183

See accompanying notes.

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ADVANCED MICRO DEVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Thousands except per share amounts)

	June 30, 2002			December 30, 2001*
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	506,191		$	427,288
Short-term investments		593,752			442,709
Total cash, cash equivalents and short-term investments		1,099,943			869,997
Accounts receivable, net of allowance for doubtful accounts		534,929			659,783
Inventories:
Raw materials		39,321			26,489
Work-in-process		116,205			236,679
Finished goods		224,552			117,306
Total inventories		380,078			380,474
Deferred income taxes		236,152			155,898
Prepaid expenses and other current assets		166,963			286,957
Total current assets		2,418,065			2,353,109
Property, plant and equipment, at cost:
Land		47,808			33,207
Buildings and leasehold improvements		1,258,840			1,461,228
Equipment		4,884,883			4,162,652
Construction in progress		592,477			469,191
Total property, plant and equipment		6,784,008			6,126,278
Accumulated depreciation and amortization		(3,849,131	)		(3,387,140	)
Property, plant and equipment, net		2,934,877			2,739,138
Investment in joint venture		378,164			363,611
Other assets		171,936			191,384
	$	5,903,042		$	5,647,242
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	258,641		$	304,990
Accrued compensation and benefits		128,641			129,042
Accrued liabilities		343,289			443,995
Income taxes payable		37,824			56,234
Deferred income on shipments to distributors		38,381			47,978
Notes payable to banks		82,424			63,362
Current portion of long-term debt, capital lease obligations and other		284,936			268,336
Total current liabilities		1,174,136			1,313,937
Deferred income taxes		75,438			105,305
Long-term debt, capital lease obligations and other, less current portion		1,141,060			672,945
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01; 750,000,000 authorized; 342,286,797 shares issued and outstanding at June 30, 2002 and 340,502,883 at December 30, 2001		3,423			3,405
Capital in excess of par value		1,984,110			1,966,374
Treasury stock, at cost: 6,310,580 shares		(77,157	)		(77,157	)
Retained earnings		1,601,579			1,795,680
Accumulated other comprehensive income (loss)		453			(133,247	)
Total stockholders’ equity		3,512,408			3,555,055
	$	5,903,042		$	5,647,242

* Amounts as of December 30, 2001 were derived from the December 30, 2001 audited financial statements.

See accompanying notes.

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ADVANCED MICRO DEVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Thousands)

	Six Months Ended
	June 30, 2002			July 1, 2001
Cash flows from operating activities:
Net income (loss)	$	(194,101	)	$	142,189
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation		331,138			303,089
Amortization		26,077			9,287
Provision for doubtful accounts		1,860			398
Net change in deferred income taxes		(97,761	)		23,798
Foreign grant and subsidy income		(28,831	)		(24,749	)
Net loss on disposal of property, plant and equipment		17,015			18,862
Net realized gain on sale of available-for-sale securities		(702	)		—
Undistributed income of joint venture		(260	)		(20,483	)
Recognition of deferred gain on sale of building		(840	)		(841	)
Net compensation recognized under employee stock plans		1,654			2,860
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable		123,049			(181,368	)
Decrease (increase) in inventories		550			(64,718	)
Decrease (increase) in prepaid expenses		(44,646	)		2,147
Decrease in other assets		145,500			47,209
Decrease (increase) in tax refund receivable and tax payable		15,290			(37,887	)
Refund of customer deposits under purchase agreements		(30,000	)		(39,000	)
Decrease in payables and accrued liabilities		(161,819	)		(162,564	)
Decrease in accrued compensation		(399	)		(51,290	)
Income tax benefit from employee stock option exercises		—			4,480
Net cash provided by (used in) operating activities		102,774			(28,581	)
Cash flows from investing activities:
Purchases of property, plant and equipment		(371,410	)		(377,818	)
Proceeds from sale of property, plant and equipment		2,240			367
Cash paid for the acquisition of Alchemy, net of cash acquired		(26,509	)		—
Purchases of available-for-sale securities		(2,729,547	)		(2,190,266	)
Proceeds from sales/maturities of available-for-sale securities		2,611,547			2,205,171
Investment in joint venture		—			(122,356	)
Net cash used in investing activities		(513,679	)		(484,902	)
Cash flows from financing activities:
Proceeds from borrowings		581,784			327,117
Payments on debt and capital lease obligations		(184,734	)		(47,598	)
Debt issuance cost		(14,057	)		—
Proceeds from foreign grants		74,781			18,660
Proceeds from issuance of stock and other		16,099			32,623
Net cash provided by financing activities		473,873			330,802
Effect of exchange rate changes on cash and cash equivalents		15,935			(16,276	)
Net increase (decrease) in cash and cash equivalents		78,903			(198,957	)
Cash and cash equivalents at beginning of period		427,288			591,457
Cash and cash equivalents at end of period	$	506,191		$	392,500
Supplemental disclosures of cash flow information:
Cash paid for:
Interest	$	17,212		$	26,458
Income taxes	$	23,342		$	50,996
Supplemental disclosures of non-cash financing activities:
Redemption of convertible debt	$	—		$	516,860

See accompanying notes.

5

ADVANCED MICRO DEVICES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.    Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Advanced Micro Devices, Inc. (the Company or AMD) have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. The results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the full fiscal year ending December 29, 2002. In the opinion of the Company’s management, the information contained herein reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. All such adjustments are of a normal recurring nature. The interim financial statements should be read in conjunction with the financial statements in the Company’s Annual Report on Form 10-K for the year ended December 30, 2001. Certain prior period amounts have been reclassified to conform to the current period presentation.

The Company uses a 52- to 53-week fiscal year ending on the last Sunday in December. The quarters ended June 30, 2002 and July 1, 2001 each included 13 weeks. The six months ended June 30, 2002 and July 1, 2001 each included 26 weeks.

2.    New Accounting Pronouncements

The Company adopted Statement of Financial Accounting Standards No. 141, “Business Combinations” (SFAS 141), Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (SFAS 142) and Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (SFAS 144) at the beginning of the 2002 fiscal year. The adoption of these standards did not have a material impact on the Company’s financial statements.

In July 2002, the FASB issued Statement of Financial Accounting Standards No. 146 “Accounting for Costs Associated with Exit or Disposal Activities” (SFAS 146). SFAS 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies EITF Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” (EITF 94-3). The principal difference between SFAS 146 and EITF 94-3 relates to SFAS 146’s timing for recognition of a liability for a cost associated with an exit or disposal activity. SFAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. Under EITF 94-3 a liability for an exit cost as generally defined in EITF 94-3 was recognized at the date of an entity’s commitment to an exit plan. SFAS 146 is effective for exit or disposal activities that are initiated after December 31, 2002. SFAS 146 is applied prospectively upon adoption and, as a result, would not have a material impact on the Company’s current financial position or results of operations.

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3.    Available-For-Sale Securities

The following is a summary of the available-for-sale securities held by the Company as of June 30, 2002:

(Thousands)	Cost		Fair Market Value
Cash equivalents:
Commercial paper	$	32,724	$	32,977
Money market funds		149,458		149,487
Federal agency notes		786		786
Total cash equivalents	$	182,968	$	183,250
Short-term investments:
Bank notes	$	22,686	$	22,949
Corporate notes		212,109		213,833
Money market auction rate preferred stocks		99,216		99,355
Federal agency notes		251,367		252,603
Tax exempt money market fund		5,000		5,012
Total short-term investments	$	590,378	$	593,752
Long-term investments:
Equity investments	$	11,571	$	14,200
Commercial paper		10,000		10,000
Federal agency notes		2,463		2,463
Total long-term investments (included in other assets)	$	24,034	$	26,663

The Company realized a net gain on the sale of available-for-sale securities of $0.7 million in the first six months of 2002.

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4.    Net Income (Loss) Per Common Share

Basic net income (loss) per common share is computed using the weighted-average common shares outstanding. Diluted net income (loss) per common share is computed as though all potential dilutive common shares were outstanding during the period. Dilutive securities include stock options and shares issuable upon the conversion of convertible debt. For the three and six month periods ended June 30, 2002, 21 million and 18 million shares, respectively, of common stock issuable upon the assumed conversion of convertible debt were anti-dilutive and were not included in the calculation of diluted net income (loss) per share due to recorded net losses. For the three and six month periods ended June 30, 2002, outstanding stock options representing 3 million and 5 million shares, respectively, were not included in the calculation of diluted net income (loss) per share, as the effect would also be anti-dilutive. The following table sets forth the components of basic and diluted income (loss) per common share:

	Quarter Ended					Six Months Ended
(Thousands except per share data)	June 30, 2002			July 1, 2001		June 30, 2002			July 1, 2001
Numerator:
Numerator for basic income (loss) per common share	$	(184,938	)	$	17,352	$	(194,101	)	$	142,189
Denominator:
Denominator for basic income (loss) per share— weighted-average shares		341,782			330,120		341,294			322,234
Effect of dilutive securities:
Employee stock options		—			10,413		—			9,949
Dilutive potential common shares		—			10,413		—			9,949
Denominator for diluted income (loss) per common share—adjusted weighted-average shares		341,782			340,533		341,294			332,183
Net income (loss) per common share:
Basic	$	(0.54	)	$	0.05	$	(0.57	)	$	0.44
Diluted	$	(0.54	)	$	0.05	$	(0.57	)	$	0.43

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5.    Investment in Joint Venture

In 1993, AMD and Fujitsu Limited formed a joint venture, Fujitsu AMD Semiconductor Limited (FASL), for the development and manufacture of non-volatile memory devices. FASL operates advanced integrated circuit (IC) manufacturing facilities in Aizu-Wakamatsu, Japan, for the production of Flash memory devices. The Company’s share of FASL is 49.992 percent, and the investment is accounted for under the equity method. At June 30, 2002, the cumulative adjustment related to the translation of the FASL financial statements into U.S. dollars resulted in a decrease in the investment in FASL of $27.2 million.

The following are the significant FASL related party transactions and balances, which have been included in the Company’s consolidated financial statements:

	Quarter Ended				Six Months Ended
(Thousands)	June 30, 2002		July 1, 2001		June 30, 2002		July 1, 2001
Royalty income	$	8,265	$	10,604	$	15,541	$	24,949
Purchases		88,382		129,027		175,881		288,754
(Thousands)	June 30, 2002		December 30, 2001
Royalty receivable	$	7,107	$	6,962
Accounts payable		3,075		37,957

The following is condensed unaudited financial data of FASL:

	Quarter Ended					Six Months Ended
(Thousands)	June 30, 2002			July 1, 2001		June 30, 2002			July 1, 2001
Net sales	$	171,896		$	250,294	$	341,181		$	566,761
Gross profit (loss)		(5,491	)		28,521		43,704			92,533
Operating income (loss)		(6,412	)		27,018		41,944			89,994
Net income (loss)		(28,289	)		15,717		(4,243	)		52,292

The Company’s share of FASL net income (loss) set forth above differs from the equity in net income (loss) of joint venture reported on the condensed consolidated statements of operations. The difference is due to adjustments resulting from intercompany profit eliminations, which are reflected on the Company’s consolidated statements of operations. The Company has never received cash dividends from its investment in FASL.

In 2000, FASL further expanded its production capacity through a foundry arrangement with Fujitsu Microelectronics, Inc. (FMI), a wholly owned subsidiary of Fujitsu Limited. In connection with FMI equipping its wafer fabrication facility in Gresham, Oregon (the Gresham Facility) to produce Flash memory devices for sale to FASL, the Company agreed to guarantee the repayment of up to $125 million to Fujitsu in connection with its obligation

9

as a co-signer with FMI under its global multicurrency revolving credit facility (the Credit Facility) with a third-party bank (the Guarantee). On November 30, 2001, Fujitsu announced that it was closing the Gresham Facility due to the downturn of the Flash memory market. On March 26, 2002, the Company received notice from Fujitsu that FMI requested an advance of funds from Fujitsu to avoid default under the Credit Facility, which notice is required as a condition to the Company’s obligations under the Guarantee. However, to date, the Company has not received a demand for payment under the terms of the Guarantee from Fujitsu. Furthermore, the Company continues to disagree with Fujitsu as to the amount, if any, of the Company’s obligations under the Guarantee. While the Company continues to discuss this matter with Fujitsu, the Company cannot at this time reasonably predict its outcome including any amounts the Company might be required to pay Fujitsu, and therefore, has not recorded any liability in its consolidated financial statements associated with the Guarantee.

6.    Segment Reporting

AMD operates in two reportable segments: the Core Products and Foundry Services segments. The Core Products segment includes PC processors, Memory products and Other IC products. The Foundry Services segment includes fees for services provided to Legerity, Inc., the Company’s former voice communication products subsidiary, and Vantis Corporation, the Company’s former programmable logic subsidiary. The following table is a summary of sales and operating income (loss) by segment with a reconciliation to net income (loss) for the quarters and six months ended June 30, 2002 and July 1, 2001:

	Quarter Ended						Six Months Ended
(Thousands)	June 30, 2002			July 1, 2001			June 30, 2002			July 1, 2001
Segment net sales:
Core Products segment	$	593,869		$	955,455		$	1,483,989		$	2,102,595
Foundry Services segment		6,430			29,809			18,383			71,416
Total segment net sales	$	600,299		$	985,264		$	1,502,372		$	2,174,011
Segment operating income (loss):
Core Products segment	$	(289,206	)	$	27,787		$	(301,746	)	$	193,996
Foundry Services segment		(7,458	)		(6,127	)		(8,461	)		(5,317	)
Total segment operating income (loss)		(296,664	)		21,660			(310,207	)		188,679
Interest income and other, net		8,661			12,308			18,199			31,131
Interest expense		(15,729	)		(20,199	)		(27,887	)		(41,844	)
Benefit (provision) for income taxes		121,493			(3,717	)		125,534			(56,260	)
Equity in net income (loss) of joint venture		(2,699	)		7,300			260			20,483
Net income (loss)	$	(184,938	)	$	17,352		$	(194,101	)	$	142,189

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7.    Comprehensive Income (Loss)

The following are the components of comprehensive income (loss):

	Quarter Ended						Six Months Ended
(Thousands)	June 30, 2002			July 1, 2001			June 30, 2002			July 1, 2001
Net income (loss)	$	(184,938	)	$	17,352		$	(194,101	)	$	142,189
Net change in cumulative translation adjustments		138,745			(23,558	)		101,356			(40,940	)
Net change in unrealized gains (losses) on cash flow hedges		40,290			(3,831	)		33,418			(11,648	)
Unrealized gains (losses) on available-for-sale securities		91			498			(1,077	)		(10,492	)
Other comprehensive income (loss)		179,126			(26,891	)		133,697			(63,080	)
Comprehensive income (loss)	$	(5,812	)	$	(9,539	)	$	(60,404	)	$	79,109

The components of accumulated other comprehensive income (loss) are as follows:

(Thousands)	June 30, 2002			December 30, 2001
Unrealized gain on investments, net of tax	$	3,994		$	5,071
Net unrealized gains (losses) on cash flow hedges, net of tax		30,019			(3,399	)
Cumulative translation adjustments		(33,560	)		(134,919	)
	$	453		$	(133,247	)

8.    Senior Convertible Debt

On January 29, 2002, the Company closed a private offering of $500 million aggregate principal amount of its 4¾% Convertible Senior Debentures (the Debentures) Due 2022 issued pursuant to Rule 144A and Regulation S of the Securities Act. The Company intends to use the net proceeds generated from the offering for capital expenditures, working capital and general corporate purposes.

The debentures bear interest at a rate of 4¾ percent per annum. The interest rate will be reset on each of August 1, 2008, August 1, 2011 and August 1, 2016 to a rate per annum equal to the interest rate payable 120 days prior to such date on 5-year U.S. Treasury Notes, plus 43 basis points. The interest rate will not be less than 4¾ percent and will not exceed 6¾ percent. The debentures are convertible by the holders into the Company’s common stock at a conversion price of $23.38 per share at any time. At this conversion price, each $1,000 principal amount of the debentures will be convertible into approximately 43 shares of the Company’s common stock.

The debentures will be redeemable by the Company for cash at specified prices declining to 100 percent of the principal amount plus accrued and unpaid interest at the Company’s option beginning on February 5, 2005, provided that the Company may not redeem the debentures prior to February 1, 2006 unless the last reported sale price of the Company’s common stock

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is at least 130 percent of the then effective conversion price for at least 20 trading days within a period of 30 consecutive trading days ending within five trading days of the date of the redemption notice.

Holders of the debentures will have the ability to require the Company to repurchase the debentures, in whole or in part, on February 1, 2009, February 1, 2012 and February 1, 2017. The holders of the debentures will also have the ability to require the Company to repurchase the debentures in the event that the Company undergoes specified fundamental changes, including a change of control. In each such case, the redemption or repurchase price would be 100 percent of the principal amount of the debentures plus accrued and unpaid interest.

9.    Business Acquisition

On February 19, 2002, the Company completed the acquisition of Alchemy Semiconductor, Inc., (Alchemy) a privately held company, for approximately $30 million in cash consideration to Alchemy stockholders. Alchemy designs, develops and markets low-power, high performance microprocessors for personal connectivity devices such as personal digital assistants (PDAs), web tablets and portable and wired Internet access devices and gateways.

The Company has accounted for the acquisition using the purchase method, and the results of operations of Alchemy have been included in the Company’s operations since acquisition. Approximately $2.9 million of the purchase price represented acquired in-process research and development (IPR&D) that had not yet reached technological feasibility and had no alternative future use. The $2.9 million was expensed upon the acquisition of Alchemy. In addition, the Company recorded $18.7 million of goodwill based on the residual difference between the amount paid and the fair values assigned to identified tangible and intangible assets using an independent valuation. The Company adopted SFAS 141 and SFAS 142 at the beginning of 2002. Pursuant to SFAS 142, goodwill and intangible assets with indefinite lives are no longer amortized but will be reviewed annually for impairment.

10.    Restructuring and Other Special Charges

The Company announced a restructuring plan on September 25, 2001, due to the continued slowdown in the semiconductor industry and a resulting decline in revenues. In connection with the plan, the Company closed Fabs 14 and 15 in Austin, Texas in June 2002. These facilities supported certain of the Company’s older products and its Foundry Service operations, which are being discontinued as part of the plan. The Company also reorganized related manufacturing facilities and reduced related activities primarily in Penang, Malaysia along with associated administrative support.

The restructuring plan will result in the reduction of approximately 2,240 direct manufacturing and related administrative support positions by the end of the third quarter of 2002. Approximately 750 of these positions were associated with closing Fabs 14 and 15 in Austin. The balance of the reductions resulted from reorganizing activities primarily in Penang, Malaysia.

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Pursuant to the September 25, 2001 plan, the Company recorded restructuring costs and other special charges of $89.3 million, consisting of $34.1 million of anticipated severance and fringe benefit costs, $12.3 million and $3.2 million of anticipated exit costs to close facilities in Austin and Penang, and $28.7 million and $10.3 million of non-cash asset impairment charges in Austin and Asia, primarily Penang. The asset impairment charges related primarily to buildings and production equipment and have been incurred as a result of the Company’s decision to implement the restructuring plan. Management determined the fair value of the affected equipment based on market conditions and certain information obtained from third parties.

The following table summarizes activity under the plan through June 30, 2002:

(Thousands)	Severance and Employee Benefits			Facilities and equipment impairment			Facility and equipment decommission costs			Other facility exit costs			Total
Q3 2001 charges	$	34,105		$	39,000		$	15,500		$	700		$	89,305
Non-cash charges		—			(39,000	)		—			—			(39,000	)
Cash charges		—			—			—			—			—
Accruals at September 30, 2001		34,105			—			15,500			700			50,305
Cash charges		(7,483	)		—			—			(54	)		(7,537	)
Accruals at December 30, 2001		26,622			—			15,500			646			42,768
Cash charges		(9,678	)		—			(420	)		—			(10,098	)
Accruals at March 31, 2002		16,944			—			15,080			646			32,670
Cash charges		(11,546	)		—			—			—			(11,546	)
Accruals at June 30, 2002	$	5,398		$	—		$	15,080		$	646		$	21,124

As of June 30, 2002, 2,205 employees were terminated resulting in cash payments of approximately $29 million in severance and employee benefit costs. The remaining severance cash payments will be made by the end of the third quarter of 2002.

The plan will be substantially completed by the end of the third quarter of 2002, with the exception of the remaining decommissioning expenses, which will be paid over the course of the next 12 months.

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ITEM 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward-Looking Statements

The statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations that are forward-looking are based on current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. The forward-looking statements relate to, among other things: operating results; anticipated cash flows; capital expenditures; gross margins; adequacy of resources to fund operations and capital investments; our ability to produce AMD Athlon^™ and AMD Duron^™ microprocessors with the performance and in the volume required by customers on a timely basis; our ability to maintain average selling prices of seventh-generation microprocessors despite aggressive marketing and pricing strategies of our competitors; our ability and the ability of third parties to provide timely infrastructure solutions (motherboards and chipsets) to support our microprocessors; our ability to increase customer and market acceptance of our seventh- and eighth-generation microprocessors; a recovery in the communication and networking industries leading to an increase in the demand for Flash memory products; the effect of foreign currency hedging transactions; the process technology transitions in our submicron integrated circuit manufacturing and design facility in Dresden, Germany (Dresden Fab 30); and the financing, construction and utilization of the Fujitsu AMD Semiconductor Limited (FASL) manufacturing facilities. See “Financial Condition” and “Risk Factors” below, as well as such other risks and uncertainties as are detailed in our other Securities and Exchange Commission reports and filings for a discussion of the factors that could cause actual results to differ materially from the forward-looking statements.

The following discussion should be read in conjunction with the Unaudited Consolidated Financial Statements and related notes included in this report and our Audited Financial Statements and related notes as of December 30, 2001 and December 31, 2000 and for each of the three years in the period ended December 30, 2001 as filed in our Annual Report on Form 10-K.

AMD, the AMD Arrow logo, and combinations thereof, Advanced Micro Devices, AMD Athlon, AMD Duron, AMD Opteron and MirrorBit are either trademarks or registered trademarks of Advanced Micro Devices, Inc. in the United States and/or other jurisdictions. Vantis is a trademark of Lattice Semiconductor Corporation. Legerity is a trademark of Legerity, Inc. Microsoft and Windows are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other jurisdictions. Other terms used to identify companies and products may be trademarks of their respective owners.

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RESULTS OF OPERATIONS

We participate in all three technology areas within the digital integrated circuit (IC) market—microprocessors, memory circuits and logic circuits—through our Core Products and Foundry Services segments. Our Core Products segment includes our PC processor products, Memory products and Other IC products. PC processor products include our seventh-generation microprocessors, the AMD Athlon and AMD Duron microprocessors. Memory products include Flash memory devices and Erasable Programmable Read-Only Memory (EPROM) devices. Other IC products include embedded processors, networking products, personal connectivity solutions products and platform products, which primarily consists of chipsets. Our Foundry Services segment consists of service fees from Legerity, Inc. and Vantis Corporation.

On February 19, 2002, we completed the acquisition of Alchemy Semiconductor, Inc., a privately held company, for approximately $30 million in cash consideration to Alchemy stockholders. Alchemy designs, develops and markets low-power, high performance microprocessors for personal connectivity devices such as personal digital assistants (PDAs), web tablets and portable and wired Internet access devices and gateways.

We use a 52- to 53-week fiscal year ending on the last Sunday in December. The quarters ended June 30, 2002, March 31, 2002 and July 1, 2001 each included 13 weeks. The six months ended June 30, 2002 and July 1, 2001 each included 26 weeks.

The following is a summary of our net sales by segment for the periods presented below:

	Quarter Ended						Six Months Ended
(Millions)	June 30, 2002		March 31, 2002		July 1, 2001		June 30, 2002		July 1, 2001
Core Products segment:
PC Processors	$	380	$	684	$	588	$	1,064	$	1,249
Memory Products		175		160		316	$	335		727
Other IC Products		39		46		51		85		126
		594		890		955		1,484		2,102
Foundry Services segment		6		12		30		18		72
	$	600	$	902	$	985	$	1,502	$	2,174

Net Sales Comparison of Quarters Ended June 30, 2002 and March 31, 2002

Net sales of $600 million for the second quarter of 2002 decreased by 33 percent compared to net sales of $902 million for the first quarter of 2002.

During the second quarter of 2002, PC processors net sales of $380 million decreased by 44 percent compared to the first quarter of 2002 due to declines in both average selling prices and unit sales. The decline in unit sales from

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approximately 8 million in the first quarter of 2002 to approximately 6 million in the second quarter of 2002 reflected a weaker than expected PC market. The decline in our average selling prices of approximately 28% from the first quarter of 2002 was principally due to a shift in the mix of products sold. In the third quarter of 2002, we expect unit shipments of PC processors to follow seasonal patterns, which generally show increases from second quarter levels. Our ability to increase PC processor revenue in the third quarter of 2002 depends upon customer demand for the newest versions of the AMD Athlon processors, resulting in an increase of average selling prices and an increase in unit shipments of our PC processors.

Memory products net sales of $175 million increased by 9 percent in the second quarter of 2002 compared to the first quarter of 2002 due to an increase in unit shipments based on the strength of the high-end mobile phone market. This increase was partially offset by a continuing decline in average selling prices, although at a slower rate of decline than in preceding quarters. In the third quarter of 2002, we expect sequential sales growth of Flash memory devices due to an improving product portfolio.

Other IC products net sales of $39 million decreased by 17 percent in the second quarter of 2002 compared to the first quarter of 2002 primarily due to a decline in sales of platform products, embedded processors and networking products.

Foundry Services segment service fees of $6 million decreased by 50 percent in the second quarter of 2002 compared to the first quarter of 2002.

Net Sales Comparison of Quarters Ended June 30, 2002 and July 1, 2001

Net sales of $600 million for the second quarter of 2002 decreased by 39 percent compared to net sales of $985 million for the second quarter of 2001.

PC processors net sales of $380 million decreased by 35 percent in the second quarter of 2002 compared to the same quarter of 2001 primarily due to lower unit sales and average selling prices of our seventh-generation microprocessors.

Memory products net sales of $175 million decreased by 45 percent in the second quarter of 2002 compared to the same quarter of 2001 due to a decline in average selling prices as a result of the sustained weakness in the communications and networking equipment industries, partially offset by an increase in unit shipments.

Other IC products net sales of $39 million in the second quarter of 2002 decreased by 25 percent compared to the same quarter of 2001 primarily due to decreased net sales from embedded processors and platform products.

Foundry Services segment service fees of $6 million in the second quarter of 2002 decreased by 80 percent compared to the same quarter of 2001.

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Net Sales Comparison of Six Months Ended June 30, 2002 and July 1, 2001

Net sales of $1,502 million for the first six months of 2002 decreased by 31 percent compared to net sales of $2,174 million for the first six months of 2001.

PC processors net sales of $1,064 million decreased 15 percent in the first six months of 2002 compared to the same period of 2001 primarily due to decline in average selling prices and unit shipments of our seventh- generation microprocessors.

Memory products net sales of $335 million decreased by 54 percent in the first six months of 2002 compared to the same period of 2001 due to a decline in both unit shipments and average selling prices as a result of sustained broad market weakness.

The Other IC products net sales of $85 million decreased by 33 percent in the first six months of 2002 compared to the same period of 2001 primarily due to decreased net sales of embedded processors.

The Foundry Services segment service fees of $18 million in the first six months of 2002 decreased by 75 percent compared to the same period of 2001.

Comparison of Expenses, Gross Margin Percentage and Interest

The following is a summary of expenses, gross margin percentage and interest and other income, net for the periods presented below:

	Quarter Ended									Six Months Ended
(Millions except for gross margin percentage)	June 30, 2002			March 31, 2002			July 1, 2001			June 30, 2002			July 1, 2001
Cost of sales	$	558		$	587		$	636		$	1,145		$	1,351
Gross margin percentage		7	%		35	%		35	%		24	%		38	%
Research and development	$	178		$	172		$	171		$	350		$	329
Marketing, general and administrative		160			157			156			317			305
Interest and other income, net		9			10			12			19			31
Interest expense		16			12			20			28			42

We operate in an industry characterized by intense competition and high fixed costs due to capital-intensive manufacturing processes, particularly the costs to build and maintain state-of-the-art wafer production facilities required for PC processors and memory devices. As a result, our gross margin percentage is significantly affected by fluctuations in unit sales and average selling prices.

The gross margin percentage of 7 percent in the second quarter of 2002 decreased from 35 percent in the first quarter of 2002 and the second quarter of 2001. The gross margin percentage of 24 percent for the first six months of 2002 decreased from 38 percent for the same period in 2001. The decline in gross margin was primarily due to a decline in both average selling prices and unit shipments of our PC processors. Given ongoing capital investments required to expand production and to remain competitive, in order to increase our gross margins we must increase unit sales and average selling prices of our products.

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Research and development expenses of $178 million in the second quarter of 2002 increased by three percent compared to the first quarter of 2002, and four percent compared to the same quarter in 2001. Research and development expenses of $350 million in the first six months of 2002 increased six percent compared to the first six months of 2001. The increase in research and development expenses was primarily due to PC processor research and development activities.

Research and development expenses and cost of sales in the second quarter of 2002 included the recognition of $4.2 and $10.8 million, respectively, of deferred credits on foreign capital grants and interest subsidies that were received from the State of Saxony for Dresden Fab 30. In the first six months of 2002, these credits totaled $7.6 and $21.2 million. In the first six months of 2001, these credits totaled $3.5 and $21.2 million.

Marketing, general and administrative expenses of $160 million in the second quarter of 2002 were relatively flat compared to $157 million in the first quarter of 2002 and $156 million in the second quarter of 2001. Marketing, general and administrative expenses of $317 million for the first six months of 2002 increased four percent compared to the first six months of 2001 primarily due to increased AMD Athlon microprocessor marketing efforts.

In the second quarter of 2002, interest and other income, net of $9 million decreased 10 percent compared to the first quarter of 2002 and 25 percent compared to the second quarter of 2001. In the first six months of 2002, interest and other income, net of $19 million decreased 39 percent compared to the first six months of 2001. The decrease in interest income was primarily due to lower interest rates and lower investment balances.

Interest expense of $16 million in the second quarter of 2002 increased 33 percent compared to the first quarter of 2002 primarily because our $500 million 4¾ percent convertible senior debentures, issued at the end of January 2002, were outstanding during the entire second quarter of 2002. Interest expense for the second quarter of 2002 decreased 20 percent compared to the same quarter of 2001 primarily due to the capitalization of interest beginning in the third quarter of 2001 associated with the expansion of Dresden Fab 30. Interest expense of $28 million in the first six months of 2002 decreased 33 percent compared to the first six months of 2001 primarily due to the capitalization of interest beginning in the third quarter of 2001 associated with the expansion of Dresden Fab 30 and the lower interest rate on our currently outstanding convertible debt.

We announced a restructuring plan on September 25, 2001, due to the continued slowdown in the semiconductor industry and a resulting decline in revenues. In connection with the plan, we closed Fabs 14 and 15 in Austin, Texas in June 2002. These facilities supported certain of our older products and Foundry Service operations, which will be discontinued as part of our plan. We also reorganized related manufacturing facilities and reduced related activities primarily in Penang, Malaysia, along with associated administrative support.

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The restructuring plan will result in the reduction of approximately 2,240 direct manufacturing and related administrative support positions by the end of the third quarter of 2002. Approximately 750 of these positions were associated with closing Fabs 14 and 15 in Austin. The balance of the reductions resulted from reorganizing activities primarily in Penang, Malaysia.

Pursuant to the September 25, 2001 plan, we recorded restructuring costs and other special charges of $89.3 million, consisting of $34.1 million of anticipated severance and fringe benefit costs, $12.3 million and $3.2 million of anticipated exit costs to close facilities in Austin and Penang, and $28.7 million and $10.3 million of non-cash asset impairment charges in Austin and Asia, primarily Penang. The asset impairment charges related primarily to buildings and production equipment and have been incurred as a result of our decision to implement the restructuring plan. Management determined the fair value of the affected equipment based on market conditions and certain information obtained from third parties.

We recorded an additional charge of $6.9 million during the third quarter of 2001 for the impairment of inventories associated with product lines to be discontinued as part of our September 25, 2001 restructuring plan. This amount was recorded in cost of sales in our statement of operations.

Please refer to the table in footnote 10 which summarizes activity under the plan through June 30, 2002. As a result of this restructuring plan, we expect to realize overall cost reductions of $125 million on an annualized basis. The actions taken to date resulted in actual savings of approximately $11.2 million in the second quarter of 2002. As of June 30, 2002, 2,205 employees had been terminated resulting in cash payments of approximately $29 million in severance and employee benefit costs. The remaining severance cash payments will be made in the third quarter of 2002.

The plan will be substantially completed by the end of the third quarter of 2002, with the exception of the remaining decommissioning expenses, which will be paid over the course of the next 12 months.

Income Tax

We recorded an income tax benefit of $122 million in the second quarter of 2002 and an income tax provision of $4 million in the second quarter of 2001. The effective tax rates for the quarter and six months ended June 30, 2002 were 40 percent and 39 percent, reflecting the benefits of tax credits and low-taxed foreign income. The effective tax rates for the quarter and six months ended July 1, 2001 were 27 percent and 32 percent, reflecting similar tax benefits.

Other Items

International sales as a percent of net sales were 72 percent in the second quarter of 2002 compared to 65 percent in the first quarter of 2002 and 61 percent in the same quarter of 2001. International sales as a percent of net sales were 68 percent in the first six months of 2002

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compared to 62 percent in the first six months of 2001. During the second quarter of 2002, approximately one percent of our net sales were denominated in foreign currencies, the same as in the first quarter of 2002. We do not have sales denominated in local currencies in countries that have highly inflationary economies.

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Comparison of Segment Income (Loss)

For a comparison of segment net sales, refer to the previous discussions on net sales by product group.

The following is a summary of operating income (loss) by segment for the periods presented below:

	Quarter Ended									Six Months Ended
(Millions)	June 30, 2002			March 31, 2002			July 1, 2001			June 30, 2002			July 1, 2001
Core Products	$	(289	)	$	(13	)	$	28		$	(302	)	$	194
Foundry Services		(7	)		(1	)		(6	)		(8	)		(5	)
Total segment operating income (loss)	$	(296	)	$	(14	)	$	22		$	(310	)	$	189

Core Products’ operating results for the second quarter of 2002 decreased $276 million compared to the first quarter of 2002 and $316 million compared to the same quarter of 2001. Core Products’ operating results in the first six months of 2002 decreased $496 million compared to the first six months of 2001. The change in operating results was primarily due to a decline in both average selling prices and unit shipments of our PC processors.

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FINANCIAL CONDITION

Net cash provided by operating activities was $103 million in the first six months of 2002 as a result of non-cash charges, including $357 million of depreciation and amortization, $17 million of net loss on disposal of property, plant and equipment and other cash provided by operating activities of approximately $48 million due to net changes in operating assets and liabilities, offset by our year-to-date net loss of $194 million and non cash credits of $127 million from net changes in deferred income taxes and foreign grant and subsidy income.

Accounts receivable decreased at a slower rate than the decrease in our revenue resulting in an increase in days sales outstanding. This was caused by the overall economic slowdown whereby customers were generally paying us more slowly than in prior periods. Inventory valuation remained relatively flat despite the decrease in revenues primarily due to a decrease in forecasted demand as a result of market conditions.

Net cash used by operating activities was $29 million in the first six months of 2001 primarily due to net income of $142 million, adjusted for depreciation and amortization of $312 million, offset by a decrease of $483 million in net changes in operating assets and liabilities.

Net cash used by investing activities was $514 million in the first six months of 2002 primarily due to $371 million used for the purchases of property, plant and equipment, $30 million, net of cash acquired, to purchase Alchemy Semiconductor and $118 million of net cash outflow from purchases and sales of available-for-sale securities.

Net cash used by investing activities was $485 million in the first six months of 2001 primarily due to $378 million used for the purchases of property, plant and equipment and $122 million of additional equity investments in FASL, offset by $15 million of net cash inflow from the purchases and sales of available-for-sale securities.

Net cash provided by financing activities was $474 million in the first six months of 2002 primarily due to $486 million in proceeds, net of $14 million in debt issuance costs, from issuing our convertible senior debentures, $75 million in borrowings under our loan agreement, $16 million in proceeds from the issuance of stock in connection with stock option exercises and purchases under our Employee Stock Purchase Plan and $75 million of capital investment grants from the German government as part of the Dresden Fab 30 loan agreements, these proceeds were offset by $185 million in payments on debt and capital lease obligations.

Net cash provided by financing activities was $331 million during the first six months of 2001 primarily due to $327 million from borrowing activities, $18 million of capital investment grants from the German government as part of the Dresden Fab 30 loan agreements, and $33 million in proceeds from issuance of stock in connection with stock option exercises and purchases under our Employee Stock Purchase Plan, offset by $48 million in payments on debt and capital lease obligations.

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Notes Payable to Banks

We entered into a Loan and Security Agreement (the Loan Agreement) with a consortium of banks led by a domestic financial institution on July 13, 1999. The Loan Agreement provides for a four-year secured revolving line of credit of up to $200 million. We can borrow, subject to amounts that may be set aside by the lenders, up to 85 percent of our eligible accounts receivable from original equipment manufacturers and 50 percent of our eligible accounts receivable from distributors. We must comply with certain financial covenants if the level of domestic cash we hold declines to $200 million or the amount of borrowings under the Loan Agreement rises to 50 percent of available credit. Under these circumstances the Loan Agreement restricts our ability to pay cash dividends on our common stock. Our obligations under the Loan Agreement are secured by a pledge of all of our accounts receivable, inventory, general intangibles and the related proceeds. As of June 30, 2002, we had borrowed $75 million under the Loan Agreement.

As of June 30, 2002, we had approximately $18 million in lines of credit available to our foreign subsidiaries under other financing agreements, of which approximately $7 million was outstanding.

Senior Convertible Debt

On January 29, 2002, we closed a private offering of $500 million aggregate principal amount of our 4¾% Convertible Senior Debentures Due 2022 issued pursuant to Rule 144A and Regulation S of the Securities Act. The debentures bear interest at a rate of 4¾ percent per annum. The interest rate will be reset on each of August 1, 2008, August 1, 2011 and August 1, 2016 to a rate per annum equal to the interest rate payable 120 days prior to such date on 5-year U.S. Treasury Notes, plus 43 basis points. The interest rate will not be less than 4¾ percent and will not exceed 6¾ percent. Holders of the debentures will also have the right to require us to repurchase all or a portion of their debentures on February 1, 2009, February 1, 2012, and February 1, 2017, at a price equal to 100 percent of the principal amount plus accrued and unpaid interest. The debentures are convertible by the holders into our common stock at a conversion price of $23.38 per share at any time. At this conversion price, each $1,000 principal amount of the debentures will be convertible into approximately 43 shares of our common stock. We intend to use the net proceeds generated from the offering for capital expenditures, working capital, and general corporate purposes. We may elect to purchase or otherwise retire our bonds with cash, stock or assets from time to time in open market or privately negotiated transactions, either directly or through intermediaries where we believe that market conditions are favorable to do so. Such purchases may have a material effect on our liquidity, financial condition and results of operations.

Dresden Term Loans and Dresden Guarantee

AMD Saxony Limited Liability Company & Co. KG (formerly known as AMD Saxony Manufacturing GmbH) (AMD Saxony), an indirect wholly owned German subsidiary of AMD, continues to facilitize Dresden Fab 30, which began production in the second quarter of 2000. AMD, the Federal Republic of Germany, the State of Saxony, and a consortium of banks are providing credit support for the project. We currently estimate that the construction and facilitization costs of Dresden Fab 30 will be $2.5 billion when it is fully equipped by the end of 2003. As of June 30, 2002, we had invested $2.0 billion. In March 1997, AMD Saxony entered into a loan agreement and other related agreements (the Dresden Loan Agreements) with a consortium of banks led by Dresdner Bank AG, a German financial institution, in order to finance the project. Because most of the amounts under the Dresden Loan Agreements are denominated in deutsche marks (converted to euros), the dollar amounts are subject to change based on applicable conversion rates. We used the exchange rate that was permanently fixed on

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January 1, 1999, of 1.95583 deutsche marks to one euro for the conversion of deutsche marks to euros, and then used exchange rate of 1.01 euro to one U.S. dollar as of June 30, 2002, to value the amounts denominated in deutsche marks. The Dresden Loan Agreements provide for the funding of the construction and facilitization of Dresden Fab 30. The funding consists of:

• equity, subordinated loans and loan guarantees from AMD;

• loans from a consortium of banks; and

• grants, subsidies and loan guarantees from the Federal Republic of Germany and the State of Saxony.

The Dresden Loan Agreements require that we partially fund Dresden Fab 30 project costs in the form of subordinated loans to, or equity investments in, AMD Saxony. In accordance with the terms of the Dresden Loan Agreements, as of June 30, 2002, we have invested $597 million in the form of subordinated loans to and equity investments in AMD Saxony, which are eliminated in our consolidated financial statements. In addition to support from AMD, the consortium of banks referred to above has made available up to $759 million in loans to AMD Saxony to help fund Dresden Fab 30 project costs. AMD Saxony had $558 million of such loans outstanding through June 30, 2002, which are included in our consolidated balance sheets.

Finally, the Federal Republic of Germany and the State of Saxony are supporting the Dresden Fab 30 project, in accordance with the Dresden Loan Agreements, in the form of:

• guarantees equal to the lesser of 65 percent of AMD Saxony bank debt or $759 million;

• capital investment grants and allowances totaling $287 million; and

• interest subsidies totaling $147 million.

Of these amounts, AMD Saxony had received approximately $284 million in capital investment grants and allowance, $80 million in interest subsidies and $28 million in research and development subsidies through June 30, 2002, which are included in our consolidated financial statements. The grants and subsidies are subject to conditions, including meeting specified levels of employment at December 2001 and maintaining those levels until June 2007. Noncompliance with the conditions of the grants and subsidies could result in the forfeiture of all or a portion of the future amounts to be received, as well as the repayment of all or a portion of amounts received to date. As of June 30, 2002, we were in compliance with all of the conditions of the grants and subsidies.

As of July 1, 2002, AMD Saxony was converted from a GmbH (limited liability company) into a KG (limited partnership). The partners in AMD Saxony are AMD Saxony Holding GmbH, AMD’s wholly owned subsidiary that held the shares of AMD Saxony before the conversion, and two newly formed wholly owned subsidiaries of AMD, AMD Saxony Admin GmbH (held indirectly) and AMD Saxony LLC. In addition, the Dresden Loan Agreements were amended in June 2002. Under the June 2002 amendments, we reduced our obligation to reimburse AMD Saxony for the cost of producing wafers for us. We also agreed to increase the maximum amount of revolving loans that we make available to AMD Saxony from $500 million to $750 million, and we agreed that interest payments on the revolving loans would be capitalized until the bank loans are repaid in full. As of June 30, 2002, $161 million of revolving loans were

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outstanding. Because the loans are due to be repaid by our subsidiary, AMD Saxony, the related intercompany loan and debt is not recorded on our consolidated financial statements.

The Dresden Loan Agreements, as amended, also require that we:

• provide interim funding to AMD Saxony if either the remaining capital investment allowances or the remaining interest subsidies are delayed, such funding to be repaid to AMD as AMD Saxony receives the grants or subsidies from the State of Saxony;

• fund shortfalls in government subsidies resulting from any default under the subsidy agreements caused by AMD Saxony or its affiliates; and

• guarantee up to 35 percent of AMD Saxony’s obligations under the Dresden Loan Agreements, which guarantee must not be less than $110 million or more than $304 million, until the bank loans are repaid in full.

AMD Saxony would be in default under the Dresden Loan agreement if we, AMD Saxony or AMD Saxony Holding GmbH (AMD Holding) fail to comply with certain obligations thereunder or upon the occurrence of certain events including:

• material variances from the approved plan and specifications;

• our failure to fund equity contributions or shareholder loans or otherwise comply with our obligations relating to the Dresden Loan Agreements;

• the sale of shares in AMD Saxony or AMD Holding;

• the failure to pay material obligations;

• the occurrence of a material adverse change or filings or proceedings in bankruptcy or insolvency with respect to us, AMD Saxony or AMD Holding; and

• the occurrence of a default under the Loan Agreement.

Generally, any default with respect to borrowings made or guaranteed by AMD that results in recourse to us of more than $2.5 million, and is not cured by us, would result in a cross-default under the Dresden Loan Agreements and the Loan Agreement. As of June 30, 2002, we were in compliance with all conditions of the Dresden Loan Agreements.

In the event we are unable to meet our obligations to AMD Saxony as required under the Dresden Loan Agreements, we will be in default under the Dresden Loan Agreements and the Loan Agreement, which default would permit acceleration of certain indebtedness, which could have a material adverse effect on us. We cannot assure that we will be able to obtain the funds necessary to fulfill these obligations. Any such failure would have a material adverse effect on us.

FASL Facilities and Guarantees

FASL, a joint venture formed by AMD and Fujitsu Limited in 1993, operates advanced wafer fabrication facilities in Aizu-Wakamatsu, Japan (FASL JV1, FASL JV2 and FASL JV3), for the production of Flash memory devices, which are sold to us and Fujitsu. FASL is continuing the facilitization of FASL JV2 and FASL JV3. We expect FASL JV2 and JV3, including

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equipment, to cost approximately $2.2 billion when fully equipped. As of June 30, 2002, approximately $1.6 billion of these costs had been funded by cash generated from FASL operations. These costs are incurred in Japanese yen and are, therefore, subject to change due to foreign exchange rate fluctuations. We used the exchange rate on June 30, 2002 of 119.72 yen to one U.S. dollar to translate the amounts denominated in yen into U.S. dollars.

In 2000, FASL further expanded its production capacity through a foundry arrangement with Fujitsu Microelectronics, Inc. (FMI), a wholly owned subsidiary of Fujitsu Limited. In connection with FMI equipping its wafer fabrication facility in Gresham, Oregon (the Gresham Facility) to produce Flash memory devices for sale to FASL, we agreed to guarantee the repayment of up to $125 million to Fujitsu in connection with its obligation as a co-signer with FMI under its global multicurrency revolving credit facility (the Credit Facility) with a third-party bank (the Guarantee). On November 30, 2001, Fujitsu announced that it was closing the Gresham Facility, due to the downturn of the Flash memory market. On March 26, 2002, we received notice from Fujitsu that FMI requested an advance of funds from Fujitsu to avoid default under the Credit Facility, which notice is required as a condition to our obligations under the Guarantee. However, to date we have not received a demand for payment under the terms of the Guarantee from Fujitsu. Furthermore, we continue to disagree with Fujitsu as to the amount, if any, of our obligations under the Guarantee. While we continue to discuss this matter with Fujitsu, we cannot at this time reasonably predict its outcome including any amounts we might be required to pay Fujitsu, and, therefore, have not recorded any liability in our consolidated financial statements associated with the Guarantee.

A significant portion of FASL’s capital expenditures in 2002 will continue to be funded by cash generated from FASL’s operations. However, to the extent that additional funds are required for the full facilitization of FASL JV2 and FASL JV3, we will be required to contribute cash or guarantee third-party loans in proportion to our 49.992 percent interest in FASL, up to 25 billion yen ($209 million). As of June 30, 2002, we had $176 million in loan guarantees outstanding with respect to FASL’s outstanding third-party loans.

UMC

On January 31, 2002, we announced an alliance with United Microelectronics Corporation (UMC) under which UMC and AMD will establish a joint venture to operate a state-of-the-art, 300-mm wafer fabrication facility in Singapore for high-volume production of PC processors and other logic products. As part of the alliance, UMC and AMD will collaborate in the development of advanced process technologies for semiconductor logic products. We separately announced a foundry agreement under which UMC will produce PC processors to augment Dresden Fab 30 production capacity for devices produced on 130-nanometer and smaller-geometry technology.

Other Financing Activities

We plan to make capital investments of approximately $430 million during the remainder of 2002, including amounts related to the continued facilitization of Dresden Fab 30. We believe that cash flows from our operations and current cash balances, together with available external

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financing, will be sufficient to fund our operations and capital investments for the next twelve months.

Recently Adopted Accounting Pronouncements

We adopted Statement of Financial Accounting Standards No. 141, “Business Combinations” (SFAS 141), Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Asset” (SFAS 142) and Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (SFAS 144) at the beginning of the 2002 fiscal year. The adoption of these standards did not have a material impact on our financial statements.

In July 2002, the FASB issued Statement of Financial Accounting Standards No. 146 “Accounting for Costs Associated with Exit or Disposal Activities” (SFAS 146). SFAS 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies EITF Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” (EITF 94-3). The principal difference between SFAS 146 and EITF 94-3 relates to SFAS 146’s timing for recognition of a liability for a cost associated with an exit or disposal activity. SFAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. Under EITF 94-3 a liability for an exit cost as generally defined in EITF 94-3 was recognized at the date of an entity’s commitment to an exit plan. SFAS 146 is effective for exit or disposal activities that are initiated after December 31, 2002. SFAS 146 is applied prospectively upon adoption and, as a result, would not have a material impact on our current financial position or results of operations.

RISK FACTORS

Fluctuations in the Personal Computer Market May Continue to Materially Adversely Affect Us.    Our business is closely tied to the personal computer industry. Industry-wide fluctuations in the PC marketplace have materially adversely affected us, including the industry downturn experienced during 2001 and currently, and may materially adversely affect us in the future. There is currently excess PC processor inventory in the supply chain. If market conditions do not improve, this could limit our shipments until customer demand increases and inventories are balanced to end user demand.

The Cyclical Nature of the Semiconductor Industry May Limit Our Ability to Maintain or Increase Revenue and Profit Levels During Industry Downturns.    The semiconductor industry is highly cyclical, to a greater extent than other less dynamic or less technology-driven industries. In the past, including during 2001, the first half of 2002 and currently, our financial performance has been negatively affected by significant downturns in the semiconductor industry as a result of:

• the cyclical nature of the demand for the products of semiconductor customers;

• excess inventory levels in the channels of distribution, including our customers;

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• excess production capacity; and

• accelerated declines in average selling prices.

If current conditions do not improve in the near term or if these or other conditions in the semiconductor industry occur in the future, we will be adversely affected.

If We are Unable to Develop, Produce and Successfully Market Higher-Performing Microprocessor Products, We May Be Materially Adversely Affected.    The microprocessor market is characterized by short product life cycles and migration to ever-higher performance microprocessors. To compete successfully against Intel in this market, we must transition to new process technologies at a fast pace and offer higher-performance microprocessors in significantly greater volumes. If we fail to achieve yield and volume goals or to offer higher-performance microprocessors in significant volume on a timely basis, we could be materially adversely affected.

We must continue to market successfully our seventh-generation Microsoft Windows compatible microprocessors, the AMD Athlon and AMD Duron microprocessors. To sell the volume of AMD Athlon and AMD Duron microprocessors we currently plan to manufacture through 2002, we must increase sales to existing customers and develop new customers in both consumer and commercial markets. Our production and sales plans for microprocessors are subject to other risks and uncertainties, including:

• our ability to continue offering new higher performance microprocessors competitive with Intel’s Pentium 4 processor;

• our ability to maintain and improve the successful marketing position of the AMD Athlon XP microprocessor, which relies on market acceptance of a metric based on overall processor performance versus processor speed;

• our ability to maintain average selling prices of microprocessors despite increasingly aggressive Intel pricing strategies, marketing programs, new product introductions and product bundling of microprocessors, motherboards and chipsets;

• our ability, on a timely basis, to produce microprocessors in the volume and with the performance and feature set required by customers;

• the pace at which we will be able to convert production in Dresden Fab 30 to 90-nanometer copper interconnect process technology beginning in 2003;

• our ability to expand our chipset and system design capabilities; and

• the availability and acceptance of motherboards and chipsets designed for our microprocessors.

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Our ability to increase microprocessor product revenues and benefit fully from the substantial investments we have made and continue to make related to microprocessors depends on the continuing success of the AMD Athlon and AMD Duron microprocessors, our seventh-generation processors, and the success of future generations of microprocessors.

Shipments of our eighth-generation processors for desktops, AMD Athlon processors based on Hammer technology, are planned to begin in the fourth quarter of 2002 depending on platform availability. There is a risk that platform availability could lag processor availability, which could cause us to delay first customer shipments of our processors until platforms are available. Shipments of our eighth-generation enterprise class processor for workstations and servers, the AMD Opteron^™ processor based on Hammer technology, are planned to begin in the first half of 2003. These processors will be produced in Dresden Fab 30, initially on 130-nanometer process technology employing silicon on insulator technology. These processors are designed to provide high performance for both 32-bit and 64-bit applications. The success of our eighth-generation processors are subject to risks and uncertainties including our ability to produce them in a timely manner on new process technologies in the volume and with the performance and feature set required by customers, market acceptance of them and the availability, performance and feature set of motherboards and chipsets designed for our eighth-generation processors.

If we fail to achieve continued and expanded market acceptance of our seventh-generation microprocessors or if we fail to introduce in a timely manner, or achieve market acceptance for, our eighth-generation microprocessors, we may be materially adversely affected.

Weak Market Demand for Our Flash Memory Products or Any Difficulty in Our Transition to MirrorBit Technology May Have a Material Adverse Impact on Us.    While improving somewhat, the demand for Flash memory devices continues to be weak due to the sustained downturn in the communications and networking equipment industries and excess inventories held by our customers. In addition, we expect competition in the market for Flash memory devices to continue to increase as competing manufacturers introduce new products and industry-wide production capacity increases. We may be unable to maintain or increase our market share in Flash memory devices as the market develops and Intel and other competitors introduce competitive products. A decline in unit sales of our Flash memory devices and/or lower average selling prices could have a material adverse effect on us.

In July 2002 we commenced production shipments of our first product with MirrorBit^™ technology. Our MirrorBit technology is a new memory cell architecture that enables Flash memory products to hold twice as much data as standard Flash memory devices. MirrorBit technology is expected to result in reduced cost of our products. Any substantial difficulty in transitioning our Flash memory products to MirrorBit technology, or failure to achieve the cost savings we expect, could reduce our ability to be competitive in the market and could have a material adverse effect on us.

Intel Corporation’s Dominance of the PC Processor Market May Limit Our Ability to Compete Effectively in that Market.    Intel has dominated the market for microprocessors used in PCs for many years. As a result, Intel has been able to control x86 microprocessor and PC system standards and dictate the type of products the market requires of Intel’s competitors. In addition, the financial strength of Intel allows it to market its product aggressively, target our customers and our channel partners with special incentives and discipline customers who do

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business with us. These aggressive activities can result in lower unit sales and average selling prices for us and adversely affect our margins and profitability. Intel also exerts substantial influence over PC manufacturers and their channels of distribution through the “Intel Inside” brand program and other marketing programs. As long as Intel remains in this dominant position, we may be materially adversely affected by its:

• pricing and allocation strategies;

• product mix and introduction schedules;

• product bundling, marketing and merchandising strategies;

• control over industry standards, PC manufacturers and other PC industry participants, including motherboard, chipset and basic input/output system (BIOS) suppliers; and

• user brand loyalty.

We expect Intel to maintain its dominant position in the marketplace as well as to continue to invest heavily in research and development, new manufacturing facilities and other technology companies.

Intel also dominates the PC system platform. As a result, PC OEMs are highly dependent on Intel, less innovative on their own and, to a large extent, distributors of Intel technology.

In marketing our microprocessors to these OEMs and dealers, we depend on companies other than Intel for the design and manufacture of core-logic chipsets, graphics chips, motherboards, BIOS software and other components. In recent years, many of these third-party designers and manufacturers have lost significant market share or exited the business. In addition, these companies produce chipsets, motherboards, BIOS software and other components to support each new generation of Intel’s microprocessors, and Intel has significant leverage over their business opportunities.

Our microprocessors are not designed to function with motherboards and chipsets designed to work with Intel microprocessors. Our ability to compete with Intel in the market for seventh-generation and eighth-generation microprocessors will depend on our ability to ensure that the microprocessors can be used in PC platforms designed to support our microprocessors or that platforms are available that support both Intel processors and our microprocessors. A failure of the designers and producers of motherboards, chipsets, processor modules and other system components to support our microprocessor offerings would have a material adverse effect on us.

Worldwide Economic and Political Conditions May Affect Demand for Our Products and Slow Payment by Our Customers.    The economic slowdown in the United States and worldwide, exacerbated by the occurrence and threat of terrorist attacks and consequences of sustained military action, has adversely affected demand for our microprocessors, Flash memory devices and other integrated circuits. Similarly, a continued decline of the worldwide semiconductor market or a significant decline in economic conditions in any significant

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geographic area would likely decrease the overall demand for our products, which could have a material adverse effect on us. In addition, these economic conditions are also affecting our customers. If the economic slowdown continues or worsens, it could adversely impact our customers’ ability to pay us in a timely manner.

If We Were to Lose Microsoft Corporation’s Support for Our Products or Its Logo License, Our Ability to Market Our Processors May be Materially Adversely Affected.    Our ability to innovate beyond the x86 instruction set controlled by Intel depends on support from Microsoft in its operating systems. If Microsoft does not provide support in its operating systems for our x86 instruction sets, including our x86-64 Hammer technology that will be introduced with our eighth-generation AMD Athlon and AMD Opteron processors, independent software providers may forego designing their software applications to take advantage of our innovations. In addition, we have entered into logo license agreements with Microsoft that allow us to label our products as “Designed for Microsoft Windows,” which expire in November 2002 and which may be terminated without cause on 30 days notice by either party. If we fail to retain the support and certification of Microsoft or if we are unable to renew or renegotiate the license agreements on acceptable terms, our ability to market our processors could be materially adversely affected.

We Plan for Significant Capital Expenditures in 2002 and Beyond and if We Cannot Generate that Capital Internally or Obtain it Externally, We May Be Materially Adversely Affected.    We plan to continue to make significant capital expenditures to support our microprocessor and Flash memory products both in the near and long term, including approximately $430 million during the remainder of 2002. These capital expenditures include those relating to the continued facilitization of our manufacturing facilities known as Dresden Fab 30, in Dresden, Germany, and Fab 25, in Austin, Texas. These capital expenditures will be a substantial drain on our cash flow and may also decrease our cash balances. To the extent that we cannot generate the required capital internally or obtain such capital externally, we could be materially adversely affected.

In March 1997, AMD Saxony entered into a loan agreement and other related agreements with a consortium of banks led by Dresdner Bank AG. These agreements require that we partially fund Dresden Fab 30 project costs in the form of subordinated loans to, or equity investments in, AMD Saxony. We currently estimate that the maximum construction and facilitization costs to us of Dresden Fab 30 will be $2.5 billion when fully equipped by the end of 2003. We had invested $2.0 billion as of June 30, 2002. If we are unable to meet our obligations to AMD Saxony as required under these agreements, we will be in default under the loan agreement, which would permit acceleration of indebtedness.

Our joint venture with Fujitsu Limited, FASL, continues to facilitize its manufacturing facilities in Aizu-Wakamatsu, Japan, known as FASL JV2 and FASL JV3. We expect FASL JV2 and FASL JV3, including equipment, to cost approximately $2.2 billion when fully equipped. As of June 30, 2002, approximately $1.6 billion of this cost had been funded. To the extent that additional funds are required for the full facilitization of FASL JV2 and FASL JV3, we will be required to contribute cash or guarantee third-party loans in proportion to our 49.992 percent interest in FASL. In 2000, FASL further expanded its production capacity through a foundry

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arrangement with Fujitsu Microelectronics, Inc. (FMI), a wholly owned subsidiary of Fujitsu Limited. In connection with FMI equipping its wafer fabrication facility in Gresham, Oregon (the Gresham Facility) to produce Flash memory devices for sale to FASL, we agreed to guarantee the repayment of up to $125 million to Fujitsu in connection with its obligation as a co-signer with FMI under its global multicurrency revolving credit facility (the Credit Facility) with a third-party bank (the Guarantee). On November 30, 2001, Fujitsu announced that it was closing the Gresham Facility, due to the downturn of the Flash memory market. On March 26, 2002, we received notice from Fujitsu that FMI had requested an advance of funds from Fujitsu to avoid default under the Credit Facility. Although we disagree with Fujitsu as to the amount, if any, of our obligations under the Guarantee, Fujitsu has indicated its belief that we are obligated to pay the full $125 million. If we are unable to fulfill our obligations with respect to FASL, our business could be materially and adversely affected.

While the FASL joint venture has been successful to date, there can be no assurance that Fujitsu and AMD will elect to continue the joint venture in its present form or at all.

Our Inability to Quickly Adapt to Significant Fluctuations in Demand for Our Products Relative to the Capacity of Our Manufacturing Facilities Could Have a Material Adverse Effect on Us.    Because we cannot quickly adapt our manufacturing capacity to rapidly changing market conditions, at times we underutilize our manufacturing facilities as a result of reduced demand for certain of our products. We are substantially increasing our manufacturing capacity by making significant capital investments in Dresden Fab 30, Fab 25, FASL JV3 and our test and assembly facility in Suzhou, China. If the increase in demand for our products is not consistent with our expectations, we may underutilize our manufacturing facilities, and we could be materially adversely affected. This has in the past had, and in the future may have, a material adverse effect on our earnings.

There may also be situations in which our manufacturing facilities are inadequate to meet the demand for certain of our products. Our inability to obtain sufficient manufacturing capacity to meet demand, either in our own facilities or through foundry or similar arrangements with others, could have a material adverse effect on us.

At this time, the most significant risk is that we will have underutilized capacity in Fab 25 as we continue to transition the production of microprocessors out of Fab 25 and into Dresden Fab 30 and as we convert Fab 25 to a Flash memory device production facility while demand for Flash memory products remains depressed.

Further, during periods where we are implementing new process technologies, our manufacturing facilities may not be fully productive. For example, as we convert Fab 25 to Flash memory device production, Fab 25 will not be fully productive. A substantial delay in the successful conversion of Fab 25 or the technology transitions in Dresden Fab 30 to 130-nanometer process technology employing silicon on insulator technology and then to smaller geometries could have a material adverse effect on us.

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We Cannot Be Certain that Our Substantial Investments in Research and Development of Process Technologies Will Lead to Improvements in Technology and Equipment Used to Fabricate Our Products.    We make substantial investments in research and development of process technologies in an effort to improve the technologies and equipment used to fabricate our products. For example, the successful development and implementation of silicon on insulator technology is critical to our eighth-generation family of microprocessors. However, we cannot be certain that we will be able to develop or obtain or successfully implement leading-edge process technologies needed to fabricate future generations of our products.

Any Substantial Interruption of or Problems with Our Manufacturing Operations Could Materially Adversely Affect Us.    Any substantial interruption of our manufacturing operations, either as a result of a labor dispute, equipment failure or other cause, could materially adversely affect us. Further, manufacturing yields may be adversely affected by, among other things, errors and interruptions in the fabrication process, defects in raw materials, implementation of new manufacturing processes, equipment performance and process controls. A decline in manufacturing yields may have a material adverse effect on our earnings.

Our Inability to Effectively Transition to a New Enterprise Resource Planning Program Could Have a Material Adverse Effect on Us.    We are currently in the process of transitioning to an SAP software system as our new enterprise resource planning system, which is intended to provide an integrated information system to serve all of AMD. The first phase of the implementation was successfully completed in January 2002. Future phases of the implementation are expected to occur through 2003. We are heavily dependent on the proper function of our internal systems to conduct our business. System failure or malfunctioning may result in disruptions of operations and inability to process transactions. If we encounter unforeseen problems with respect to the system operations or future implementations, we could be materially adversely affected.

If Our Products Are Not Compatible with Some or All Industry-Standard Software and Hardware, We Could be Materially Adversely Affected.    It is possible that our products may not be compatible with some or all industry-standard software and hardware. Further, we may be unsuccessful in correcting any such compatibility problems in a timely manner. If our customers are unable to achieve compatibility with software or hardware after our products are shipped in volume, we could be materially adversely affected. In addition, the mere announcement of an incompatibility problem relating to our products could have a material adverse effect on us.

Costs Related to Defective Products Could Have a Material Adverse Effect on Us.    It is possible that one or more of our products may be found to be defective after the product has been shipped to customers in volume. The cost of a recall, software fix, product replacements and/or product returns may be substantial and could have a material adverse effect on us. In addition, modifications needed to fix the defect may impede performance of the product.

If Essential Raw Materials Are Not Available to Manufacture Our Products, We Could Be Materially Adversely Affected.    Certain raw materials we use in the manufacture of our products are available from a limited number of suppliers. Interruption of supply or increased demand in the industry could cause shortages and price increases in various essential materials. If we are unable to procure certain of these materials, we might have to reduce our manufacturing operations. Such a reduction could have a material adverse effect on us.

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Our Operations in Foreign Countries Are Subject to Political and Economic Risks, Which Could Have a Material Adverse Effect on Us.    Nearly all product assembly and final testing of our products are performed at our manufacturing facilities in Penang, Malaysia; Bangkok, Thailand; Suzhou, China; Japan; and Singapore; or by subcontractors in the United States and Asia. We also depend on foreign foundry suppliers and joint ventures for the manufacture of a portion of our finished silicon wafers and have international sales operations. The political and economic risks associated with our operations in foreign countries include:

• expropriation;

• changes in a specific country’s or region’s political or economic conditions;

• trade protection measures and import or export licensing requirements;

• difficulty in protecting our intellectual property;

• changes in foreign currency exchange rates and currency controls;

• changes in freight and interest rates;

• disruption in air transportation between the United States and our overseas facilities; and

• loss or modification of exemptions for taxes and tariffs;

any of which may have a material adverse effect on us.

Our Inability to Continue to Attract and Retain Key Personnel May Hinder Our Product Development Programs.    Our future success depends upon the continued service of numerous key engineering, manufacturing, marketing, sales and executive personnel. If we are not able to continue to attract, retain and motivate qualified personnel necessary for our business, the progress of our product development programs could be hindered, and we could be otherwise adversely affected.

Our Operating Results are Subject to Substantial Quarterly, Annual and Seasonal Fluctuations.    Our operating results are subject to substantial quarterly and annual fluctuations due to a variety of factors, including decreases in average selling prices of our products, general worldwide economic conditions, the gain or loss of significant customers, market acceptance of our products and new product introductions by us or our competitors. In addition, changes in the mix of products produced and sold in the mix of sales by distribution channels, in the availability and cost of products from our suppliers or in production capacity and manufacturing yields can contribute to periodic fluctuations in operating results.

Our operating results also tend to vary seasonally. Our revenues are generally lower in the first, second and third quarters of each year than in the fourth quarter. This seasonal pattern is largely

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a result of decreased demand in Europe during the summer months and higher demand in the retail sector of the PC market during the winter holiday season.

Our Inability to Adapt to the Rapid Technological Change Characteristic of the Market for Our Products Could Materially Adversely Affect Us.    The market for our products is generally characterized by rapid technological developments, evolving industry standards, changes in customer requirements, frequent new product introductions and enhancements, short product life cycles and severe price competition. Our success depends substantially on our ability, on a cost-effective and timely basis, to continue to enhance our existing products, develop and introduce new products that take advantage of technological advances and meet the demands of our customers.

Intense Competition in the Integrated Circuit Industry May Materially Adversely Affect Us.    The integrated circuit industry is intensely competitive. Products compete on performance, quality, reliability, price, adherence to industry standards, software and hardware compatibility, marketing and distribution capability, brand recognition and availability. After a product is introduced, costs and average selling prices normally decrease over time as production efficiency improves, competitors enter the market and successive generations of products are developed and introduced for sale. Failure to reduce our costs on existing products or to develop and introduce, on a cost-effective and timely basis, new products or enhanced versions of existing products with higher margins, would have a material adverse effect on us.

Our Customers Can Cancel or Revise Purchase Orders Without Penalty. We Must Commit Resources to the Manufacture of Products Without Any Advance Purchase Commitments from Customers, Which Could Result in Excess Costs to Us.    Sales of our products are made primarily pursuant to purchase orders for current delivery or agreements covering purchases over a period of time, which may be revised or canceled without penalty. As a result, we must commit resources to the manufacture of products without any advance purchase commitments from customers. Therefore, the failure of demand for our products to match the supply of our products could result in the expenditure of excess costs, which could have a material adverse effect on us.

Our Obligations Under Specific Provisions in our Agreements with Distributors Expose Us to Material Adverse Effects When We Experience an Unexpected Significant Decline in the Price of Our Products.    Distributors typically maintain an inventory of our products. In most instances, our agreements with distributors protect their inventory of our products against price reductions, as well as products that are slow moving or have been discontinued. These agreements, which may be canceled by either party on a specified notice, generally allow for the return of our products. The price protection and return rights we offer to our distributors could materially adversely affect us if there is an unexpected significant decline in the price of our products.

If We Cannot Adequately Protect Our Technology or Other Intellectual Property, in the United States and Abroad, Through Patents, Copyrights, Trade Secrets, Trademarks and Other Measures, We May Lose a Competitive Advantage and Incur Significant Expenses.    We may not be able to adequately protect our technology or other intellectual property, in the

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United States and abroad, through patents, copyrights, trade secrets, trademarks and other measures. Any patent licensed by us or issued to us could be challenged, invalidated or circumvented or rights granted thereunder may not provide a competitive advantage to us. Further, patent applications that we file may not be issued. Despite our efforts to protect our rights, others may independently develop similar products, duplicate our products or design around our patents and other rights. In addition, it is difficult to cost-effectively monitor compliance with, and enforce, our intellectual property on a worldwide basis.

From time to time, we have been notified that we may be infringing intellectual property rights of others. If any such claims are asserted against us, we may seek to obtain a license under the third party’s intellectual property rights. We cannot assure you that all necessary licenses can be obtained on satisfactory terms, if at all. We could decide, in the alternative, to resort to litigation to challenge such claims. Such challenges could be extremely expensive and time-consuming and could have a material adverse effect on us. We cannot assure you that litigation related to the intellectual property rights of us and others will always be avoided or successfully concluded.

Failure to Comply with Applicable Environmental Regulations Could Subject Us to Fines, Suspension of Production, Alteration of Our Manufacturing Operations or Regulatory Action.    Our business involves the use of hazardous materials. If we fail to comply with governmental regulations related to the use, storage, handling, discharge or disposal of toxic, volatile or otherwise hazardous chemicals used in our manufacturing process, we may be subject to fines, suspension of production, alteration of our manufacturing processes or cessation of our operations. Such regulations could require us to procure expensive remediation equipment or to incur other expenses to comply with environmental regulations. Any failure to control the use of, disposal or storage of, or adequately restrict the discharge of, hazardous substances could subject us to future liabilities and could have a material adverse effect on us. Violations of environmental laws may result in criminal and civil liabilities.

Terrorist Attacks, Such as the Attacks That Occurred in New York and Washington, DC on September 11, 2001, and Other Acts of Violence or War May Materially Adversely Affect the Markets in which We Operate, Our Operations and Our Profitability.    Terrorist attacks may negatively affect our operations. These attacks or armed conflicts may directly impact our physical facilities or those of our suppliers or customers. Furthermore, these attacks may make travel and the transportation of our products more difficult and more expensive and ultimately affect our sales.

Also as a result of terrorism, the United States has entered into an armed conflict that could have a further impact on our sales, our supply chain, and our ability to deliver products to our customers. Political and economic instability in some regions of the world may also result and could negatively impact our business. The consequences of any of these armed conflicts are unpredictable, and we may not be able to foresee events that could have an adverse effect on our business.

More generally, any of these events could cause consumer confidence and spending to decrease or result in increased volatility in the United States and worldwide financial markets and economy. They also could result in or exacerbate economic recession in the United States or

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abroad. Any of these occurrences could have a significant impact on our operating results, revenues and costs and may result in the volatility of the market price for our securities and on the future price of our securities.

Our Corporate Headquarters, Assembly and Research and Development Activities Are Located in an Earthquake Zone and these Operations Could Be Interrupted in the Event of an Earthquake.    Our corporate headquarters, assembly operations in California and research and development activities related to process technologies are located near major earthquake fault lines. In the event of a major earthquake, we could experience business interruptions, destruction of facilities and/or loss of life, all of which could materially adversely affect us.

We Have a Substantial Amount of Debt and Debt Service Obligations, Which Could Adversely Affect Our Financial Position.    Our Loan Agreement provides for a four-year secured revolving line of credit of up to $200 million, which currently expires on July 14, 2003. Under this agreement, we can borrow, subject to amounts which may be set aside by the lenders, up to 85 percent of our eligible accounts receivable from OEMs and 50 percent of our eligible accounts receivable from distributors. If the level of cash we hold in the United States declines below $200.0 million or the amount of borrowings rises to 50 percent of available credit, we must comply with financial covenants that require us to maintain particular adjusted tangible net worth levels as detailed in the Loan Agreement. Our obligations under this agreement are secured by a pledge of most of our accounts receivable, inventory, general intangibles and the related proceeds. As of June 30, 2002, $75 million was outstanding under the Loan Agreement.

Our indirect wholly owned subsidiary, AMD Saxony Limited Liability Company & Co. KG (formerly known as AMD Saxony Manufacturing GmbH) (AMD Saxony), is a party to a loan agreement and other related agreements with a consortium of banks led by Dresdner Bank AG. These agreements require that we partially fund Dresden Fab 30 project costs in the form of subordinated loans to, or equity investments in, AMD Saxony. If we are unable to meet our obligations to AMD Saxony as required under these agreements, we will be in default under the Loan Agreement, which would permit acceleration of indebtedness under both agreements. In addition, the Dresden Loan Agreement prohibits AMD Saxony from paying any dividends, so cash held by AMD Saxony will not be available for the repayment of the debentures. 32 percent of our consolidated assets were held by AMD Saxony as of June 30, 2002.

To the extent that additional funds are required for the full facilitization of FASL JV2 and FASL JV3, we will be required to contribute cash or guarantee third-party loans in proportion to our 49.992 percent interest in FASL. If we are unable to fulfill our obligations to FASL, our business could be materially and adversely affected. In 2000, FASL further expanded its production capacity through a foundry arrangement with Fujitsu Microelectronics, Inc. (FMI), a wholly owned subsidiary of Fujitsu Limited. In connection with FMI equipping its wafer fabrication facility in Gresham, Oregon (the Gresham Facility) to produce Flash memory devices for sale to FASL, we agreed to guarantee the repayment of up to $125 million to Fujitsu in connection with its obligation as a co-signer with FMI under its global multicurrency revolving credit facility (the Credit Facility) with a third-party bank (the Guarantee). On November 30, 2001, Fujitsu announced that it was closing the Gresham Facility, due to the downturn of the Flash memory market. On March 26, 2002, we received notice from Fujitsu that FMI had requested an advance

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of funds from Fujitsu to avoid default under the Credit Facility, which notice is required as a condition to our obligations under the Guarantee. However, to date we have not received a demand for payment under the terms of the Guarantee from Fujitsu. Furthermore, we continue to disagree with Fujitsu as to the amount, if any, of our obligations under the Guarantee. While we continue to discuss this matter with Fujitsu, we cannot at this time reasonably predict its outcome including any amounts we might be required to pay Fujitsu, and, therefore, have not recorded any liability in our consolidated financial statements associated with the Guarantee.

On January 29, 2002, we closed a private offering of $500 million aggregate principal amount of our 4¾% Convertible Senior Debentures Due 2022 (the Debentures). The debentures bear interest at a rate of 4¾ percent per annum. The interest rate will be reset on each of August 1, 2008, August 1, 2011 and August 1, 2016 to a rate per annum equal to the interest rate payable 120 days prior to such date on 5-year U.S. Treasury Notes, plus 43 basis points. The interest rate will not be less than 4¾ percent and will not exceed 6¾ percent. Holders of the debentures will also have the right to require us to repurchase all or a portion of their debentures on February 1, 2009, February 1, 2012 and February 1, 2017, at a price equal to 100% of the principal amount plus accrued and unpaid interest. For federal income tax purposes, holders of debentures have agreed to treat the debentures as “contingent payment debt instruments,” which allows us to deduct interest significantly in excess of cash we pay as interest payments while the debentures are outstanding. If this agreed upon treatment was successfully challenged by the Internal Revenue Service, our ability to deduct these excess amounts may be limited.

Our ability to make payments on and to refinance our debt or our guarantees of other parties’ debts will depend on our financial and operating performance, which may fluctuate significantly from quarter to quarter and is subject to prevailing economic conditions and to financial, business and other factors beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our Loan Agreement in an amount sufficient to enable us to pay our debt or Debentures, or to fund our other liquidity needs. We may need to refinance all or a portion of our debt, including the Debentures, on or before maturity. We cannot assure you that we will be able to refinance any of our debt, including our Loan Agreement or the Debentures, on commercially reasonable terms or at all.

We may incur substantial additional debt in the future. As of June 30, 2002, we had the ability to borrow $200 million under the Loan Agreement, of which $75 million was outstanding. If new debt is added to our and our subsidiaries’ current debt levels, the risk of our inability to repay our debt, including the Debentures, could intensify.

The Price of Our Common Stock Continues to Be Highly Volatile.    Based on the trading history of our common stock, we believe that the following factors have caused and are likely to continue to cause the market price of our common stock to fluctuate substantially:

• quarterly fluctuations in our operating and financial results;

• announcements of new technologies, products and/or pricing by us or our competitors;

• the pace of new process technology and product manufacturing ramps;

• fluctuations in the stock price and operating results of our competitors, particularly Intel;

• changes in earnings estimates or buy/sell recommendations by financial analysts;

• changes in the ratings of our debentures or other securities;

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• production yields of key products; and

• general conditions in the semiconductor industry.

In addition, an actual or anticipated shortfall in revenue, gross margins or earnings from securities analysts’ expectations could have an immediate effect on the trading price of our common stock. Technology company stocks in general have experienced extreme price and volume fluctuations that are often unrelated to the operating performance of the companies. Market volatility may adversely affect the market price of our common stock, which could affect the price of our debentures and limit our ability to raise capital or to make acquisitions.

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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

On January 29, 2002, we closed a private offering of $500 million aggregate principal amount of our 4¾% Convertible Senior Debentures Due 2022 issued pursuant to Rule 144A and Regulation S of the Securities Act. The debentures bear interest at a rate of 4¾ percent per annum. The debentures are convertible by the holders into our common stock at a conversion price of $23.38 per share at any time. At this conversion price, each $1,000 principal amount of the debentures will be convertible into approximately 43 shares of our common stock. We intend to use the net proceeds generated from the offering for capital expenditures, working capital and general corporate purposes.

Reference is made to Part II, Item 7A, Quantitative and Qualitative Disclosures about Market Risk, in our Annual Report on Form 10-K for the fiscal year ended December 30, 2001. We experienced a significant increase in accumulated other comprehensive income (loss) due to a significant appreciation of both the euro and yen during the second quarter of 2002. We cannot give any assurance as to the effect that future changes in foreign currency rates will have on our consolidated financial position, results of operations or cash flows.

40

PART II.    OTHER INFORMATION

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

AMD’s annual meeting of stockholders was held on April 25, 2002. The following are the results of the voting on the proposals submitted to stockholders at the annual meeting.

Proposal No. 1    Election of Directors.    The following individuals were elected as directors:

Name	For	Withheld
W.J. Sanders III	270,091,790	5,862,012
Hector de J. Ruiz	272,299,224	3,654,578
Charles M. Blalack	272,001,559	3,952,243
R. Gene Brown	272,076,740	3,877,062
Robert B. Palmer	272,381,552	3,572,250
Joe L. Roby	270,051,647	5,902,155
Friedrich Baur	272,225,531	3,728,271
Leonard Silverman	272,335,232	3,618,570

Proposal No. 2:    The proposal to ratify the appointment of Ernst & Young LLP as AMD’s independent auditors for the current fiscal year was approved.

For: 270,617,163            Against: 3,849,145            Abstain: 1,487,490

Proposal No. 3:    The proposal to approve the amendments to the 1996 Stock Incentive Plan was approved.

For: 240,113,462            Against: 32,862,551          Abstain: 2,977,788

41

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

(a)	Exhibits
	3.2 By-Laws, as amended, filed as Exhibit 3.2 to AMD’s Amendment No. 4 to Form S-3 Registration Statement filed with the Securities and Exchange Commission on August 6, 2002, is hereby incorporated by reference.
	**10.43 (a-4) Amendment Agreement No. 4 to the Syndicated Loan Agreement, dated as of June 3, 2002, among AMD Saxony Manufacturing GmbH, Dresdner Bank AG, Dresdner Bank Luxembourg S.A. and the banks party thereto.
	**10.43 (f-5) Accession Agreement and Fourth Amendment to Sponsor’s Support Agreement, dated as of June 3, 2002, among AMD, AMD Saxony Holding GmbH, AMD Saxony LLC, AMD Saxony Admin GmbH, Dresdner Bank AG and Dresdner Bank Luxembourg S.A.
	10.43 (g-4) Third Amendment to Sponsors’ Loan Agreement, dated as of June 3, 2002, among AMD, AMD Saxony Holding GmbH and AMD Saxony Manufacturing GmbH.
	10.43 (h-1) First Amendment to Sponsors’ Subordination Agreement, dated as of February 20, 2001, among AMD, AMD Saxony Holding GmbH, AMD Saxony Manufacturing GmbH, and Dresdner Bank Luxembourg S.A. and Dresdner Bank A.G.
	10.43 (h-2) Accession Agreement and Second Amendment to Sponsors’ Subordination Agreement, dated as of June 3, 2002, among AMD, AMD Saxony Holding GmbH, AMD Saxony LLC, AMD Saxony Admin GmbH, AMD Saxony Manufacturing GmbH, and Dresdner Bank Luxembourg S.A. and Dresdner Bank AG.
	10.43 (l-4) Third Amendment to AMD Saxonia Wafer Purchase Agreement, dated as of June 3, 2002, between AMD Saxony Holdings GmbH and AMD Saxony Manufacturing GmbH.
	10.43 (o-1) First Amendment to AMD Inc. Subordination Agreement, dated as of February 20, 2001, among AMD, AMD Saxony Holding GmbH, Dresdner Bank Luxembourg S.A. and Dresdner Bank A.G.
	10.43 (o-2) Accession Agreement and Second Amendment to AMD, Inc. Subordination Agreement, dated as of June 3, 2002, among AMD, AMD Saxony Holding GmbH, AMD Saxony LLC, AMD Saxony Admin GmbH, Dresdner Bank Luxembourg S.A. and Dresdner Bank AG.

42

(b) Reports on Form 8-K

A Current Report on Form 8-K dated April 17, 2002 reporting under Item 5—

Other Events, was filed announcing our first quarter results.

**Confidential treatment has been requested with respect to certain parts of this Exhibit.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Advanced Micro Devices, Inc.

Date: August 12, 2002

By:    /s/    ROBERT J. RIVET

Robert J. Rivet

Senior Vice President, Chief Financial Officer

Signing on behalf of the registrant and as
the principal accounting officer

43

EX-10.43(A-4)

                                                             Exhibit 10.43 (a-4)

*** Confidential treatment has been requested as to certain portions of this
agreement. Such omitted confidential information has been designated by an
asterisk and has been filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended, and the Commission's rules and regulations promulgated under the
Freedom of Information Act, pursuant to a request for confidential treatment.
***


                            AMENDMENT AGREEMENT NO. 4

                                      dated
                                  June 3, 2002

                                  by and among

                          AMD SAXONY MANUFACTURING GMBH

                                       and

                                DRESDNER BANK AG

                                       and

                                    the other
                        BANKS and FINANCIAL INSTITUTIONS
                                  named herein

                                       and

                          DRESDNER BANK LUXEMBOURG S.A.

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

                                     TO THE

                            SYNDICATED LOAN AGREEMENT

                                      dated

                           11 March 1997 (As Amended)

                          AND OTHER OPERATIVE DOCUMENTS

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



                                     INDEX

                                                                           Page

          Preamble ........................................................   1

ss. 1     Definitions .....................................................   2

ss. 2     Conversion to a Limited Partnership .............................   4

ss. 3     Amendment of the Loan Agreement .................................   4

ss. 4     Condition Precedent .............................................   5

ss. 5     Covenants .......................................................   7

ss. 6     Representations and Warranties ..................................   8

ss. 7     Miscellaneous ...................................................  10



Schedules

Schedule 1       The Amended and Restated Syndicated Loan Agreement
Schedule 2       Amendment Agreement to Sponsors' Support Agreement
Schedule 3       Amendment Agreement to the AMD Saxonia Wafer Purchase Agreement
Schedule 4       Consent/Acknowledgement under the AMD Holding Wafer Purchase
                 Agreement
Schedule 5       Amendment Agreement to Sponsors' Subordination Agreement
Schedule 6       Amendment Agreement to AMD Inc. Subordination Agreement
Schedule 7       Amendment Agreement to Revolving Loan Facility Agreement
Schedule 8       Amendment Agreement to Sponsors' Loan Agreement
Schedule 9       Amendment Agreement to AMD Saxonia Assignment (U.S.A)
Schedule 10      Clarification and Security Agreement
Schedule 11      AMD Inc. Pledge Agreement over Membership Interests in AMD
                 Saxony LLC
Schedule 12      AMD Saxony LLC Security Agreement
Schedule 13      AMD Saxony LLC Pledge Agreement over KG Partnership Interest in
                 AMD Saxonia
Schedule 14      AMD Holding Pledge Agreement over GmbH-share in AMD Admin
Schedule 15      AMD Admin Global Assignment Agreement
Schedule 16      AMD Admin Pledge Agreement over KG Partnership Interest in AMD
                 Saxonia
Schedule 17      AMD Admin Pledge of Bank Accounts
Schedule 18      AMD Holding Pledge Agreement over KG Partnership Interest in
                 AMD Saxonia
Schedule 19      Legal Opinion of O'Melveny & Myers LLP (U.S.A.)
Schedule 20      Legal Opinion of Norr, Stiefenhofer & Lutz
Schedule 21      Legal Opinion of Baker & McKenzie
Schedule 22      Legal Opinion of White & Case, Feddersen
Schedule 23      Fairness Opinion from Ernst & Young relating to Management Plan




              AMENDMENT AGREEMENT TO THE SYNDICATED LOAN AGREEMENT
                        DATED 11 MARCH 1997 (AS AMENDED)

                                 by and between

1.   AMD SAXONY MANUFACTURING GMBH, Dresden, registered in the Commercial
     Register of the Dresden Local Court under HRB 13186 (presumably to be known
     as "AMD Saxony LLC & Co. KG" following the Registration), - hereinafter
     referred to as "AMD Saxonia" -


2.         DRESDNER BANK AG,

                                 - hereinafter referred to as "Security Agent" -


3.   the other Banks and Financial Institutions named on the signature pages
     herein
            - the parties referred to at 3 and 4 hereinafter each referred to as
                       a "Bank" or together as the "Banks", as the case may be -

and

4.   DRESDNER BANK LUXEMBOURG S.A.
                                         - hereinafter referred to as "Agent" or
                                            "Paying Agent", as the case may be -



                                    PREAMBLE

1.   AMD Saxonia, Dresdner Bank AG (in its capacity as Security Agent), the
     Banks and Dresdner Bank Luxembourg S.A. (in its capacity as Agent and
     Paying Agent) are party to the Loan Agreement (as defined below) with
     respect to loan facilities totalling DM 1,500,000,000 for the purpose of
     co-financing the Project Costs defined therein.

2.   Pursuant to the Conversion Documents, AMD Saxonia proposes to change its
     legal form to a Kommanditgesellschaft (a limited partnership organized
     under the laws of the Federal Republic of Germany), with AMD Saxony Holding
     GmbH ("AMD Holding") and AMD Saxony Admin GmbH ("AMD Admin") as




     its sole limited partners (Kommanditisten) and AMD Saxony LLC ("AMD Saxony
     LLC") as its sole general partner (Komplementar);

3.   The parties hereto have agreed to make certain changes to the Syndicated
     Loan Agreement dated 11 March 1997, as amended on 6 February 1998, 29 June
     1999 and 20 February 2001 (hereinafter the "Loan Agreement"), and to the
     Operative Documents referred to therein, to reflect the Conversion and to
     make certain other amendments, all in accordance with the terms of this
     Agreement.

                                      ss. 1
                                   Definitions

1.1  The terms defined in the Loan Agreement will have the same meanings when
     used in this Agreement, except where the context otherwise requires. In
     addition, the following terms shall have the meaning set forth below:

"Agreed Terms" means, in respect of any document, that document substantially in
the form thereof which has been initialled (for the purposes of identification)
by or on behalf of AMD Saxonia and the Agent.

"Agreement" means this amendment agreement.

"Amendment Agreements" means those agreements and documents described in ss.ss.
4.1.1 through 4.1.9 below.

"Conversion" means the change in the legal form of AMD Saxonia from a
Gesellschaft mit beschrankter Haftung (a limited liability company) to a Limited
Partnership in accordance with the Conversion Documents and the Registration.

"Conversion Documents" means the following agreements and documents, each in the
Agreed Terms: (i) the Certificate of Formation of AMD Saxony LLC; (ii) the AMD
Admin Articles of Association; (iii) the Formation Protocol for AMD Admin, (iv)
the Application to the Commercial Register for Formation of AMD Admin; (v) the
Resolution of AMD Holding as Shareholder of AMD Admin for Section 181 German
Civil Code Release, (vi) the List of Shareholders for AMD Admin, (vii) the AMD
Saxony LLC Agreement; (viii) the Partnership Agreement of AMD Saxony LLC & Co.,
KG, (ix) the Assignment and Trust Agreement between AMD Holding and AMD

                                        2



Saxony LLC, (x) the Purchase and Assignment Agreement between AMD Holding and
AMD Admin, (xi) the Resolution of AMD Holding as Shareholder of AMD Saxonia for
Transfer of Fractional Share to AMD Saxony LLC, (xii) the Notification to AMD
Saxonia of Assignment of Fractional Share to AMD Admin, (xiii) the List of
Shareholders of AMD Saxonia (reflecting addition of AMD Admin), (xiv) the
Resolution of AMD Holding and AMD Saxony LLC as Shareholders of AMD Saxonia for
Transfer of Fractional Share to AMD Admin, (xv) the Notification to AMD Saxonia
of Assignment of Fractional Share to AMD Saxony LLC, (xvi) the List of
Shareholders of AMD Saxonia (reflecting addition of AMD Saxony LLC), (xvii) the
Resolution of AMD Holding, AMD Admin and AMD Saxony LLC as Shareholders of AMD
Saxonia Approving Conversion to a Limited Partnership, (xviii) the Resolution of
AMD Inc. as Shareholder of AMD Holding Approving Conversion of AMD Saxonia,
(xix) Application to the Commercial Register for Conversion of AMD Saxonia to a
Limited Partnership; (xx) Application to the Real Estate Register for Change in
AMD Saxonia's Name, (xxi) the Transfer Agreement for Transfer Back Of Fractional
Share between AMD Holding and AMD Saxony LLC, (xxii) Application to the
Commercial Register for Transfer Back of Fractional Share by AMD Saxony LLC to
AMD Holding, (xxiii) Power of Attorney regarding Removal of AMD Saxony LLC as
General Partner of AMD Saxonia, and (xxiv) any other agreement or document
designated by the AMD Companies (with the consent of the Agent) in addition to
or in substitution for any of the above-named documents or agreements as a
"Conversion Document."

"Conversion Effective Date" means the date on which the Registration takes
effect.

"Limited Partnership" means a limited partnership (Kommanditgesellschaft) under
the laws of the Federal Republic of Germany.

"Registration" means the registration of the Conversion with the Commercial
Register at the Local Court in Dresden.

1.2  Unless the context requires otherwise, any reference to an Operative
     Document or a Project Agreement shall be a reference to such Document or
     Agreement as it shall have been, or from time to time be, amended,
     supplemented or replaced in accordance with the terms of the Loan Agreement
     and the respective Operative Document or Project Agreement.

                                        3



                                      ss. 2
                       Conversion to a Limited Partnership

2.1  Subject to ss. 4 and ss. 5.2, the Agent, the Security Agent and the Banks
     consent to and approve the Conversion in accordance with the terms and
     conditions of the Conversion Documents.

                                      ss. 3
                         Amendment of the Loan Agreement

3.1  With effect from the Conversion Effective Date, and subject to ss.4 and ss.
     5.2:

     3.1.1     the Loan Agreement is hereby amended in accordance with the
               changes marked as set out in Schedule 1 of this Agreement; and

     3.1.2     Schedules 1, 14, 22 and 62 of the Loan Agreement are hereby
               deleted and replaced with Schedules 1, 14, 22 and 62 as set out
               in Schedule 1 of this Agreement and the documents noted under the
               heading "Schedule 24" (as included in Schedule 1 of this
               Agreement) are to be added to the end of Schedule 24 of the Loan
               Agreement.

3.2  Save to the extent amended by ss. 3.1 above, the provisions of the Loan
     Agreement, together with the Schedules thereto, remain in full force and
     effect.



                                      ss. 4
                               Condition Precedent

4.1  ss.ss. 2 and 3 of this Agreement are subject to the condition precedent of
     the Agent having confirmed to the Banks in writing that it has received the
     documents set out in ss. 4.1.1 through ss. 4.1.27. The documents set out in
     ss. 4.1.18 through ss. 4.1.20, and ss. 4.1.27 must be satisfactory to the
     Agent in terms of content and form. The agreements specified in ss. 4.1.1
     through ss. 4.1.17, and in ss. 4.1.26 must have been entered into and/or
     executed in a legally binding manner and

                                        4



     their validity may not be subject to any conditions (except conditions as
     to the occurrence of the Registration):

     4.1.1     Amendment Agreement to Sponsors' Support Agreement pursuant to
               Schedule 2;

     4.1.2     Amendment Agreement to the AMD Saxonia Wafer Purchase Agreement
               pursuant to Schedule 3;

     4.1.3     Consent/Acknowledgement under the AMD Holding Wafer Purchase
               Agreement pursuant to Schedule 4;

     4.1.4     Amendment Agreement to Sponsors' Subordination Agreement pursuant
               to Schedule 5;

     4.1.5     Amendment Agreement to AMD Inc. Subordination Agreement pursuant
               to Schedule 6;

     4.1.6     Amendment Agreement to Revolving Loan Facility Agreement pursuant
               to Schedule 7;

     4.1.7     Amendment Agreement to Sponsors' Loan Agreement pursuant to
               Schedule 8;

     4.1.8     Amendment Agreement to AMD Saxonia Assignment (U.S.A.) pursuant
               to Schedule 9;

     4.1.9     Clarification and Security Agreement pursuant to Schedule 10;

     4.1.10    AMD Inc. Pledge Agreement over Membership Interests in AMD Saxony
               LLC pursuant to Schedule 11;

     4.1.11    AMD Saxony LLC Security Agreement pursuant to Schedule 12;

     4.1.12    AMD Saxony LLC Pledge Agreement over KG Partnership Interest in
               AMD Saxonia pursuant to Schedule 13;

                                        5



     4.1.13    AMD Holding Pledge Agreement over GmbH-share in AMD Admin
               pursuant to Schedule 14;

     4.1.14    AMD Admin Global Assignment Agreement pursuant to Schedule 15;

     4.1.15    AMD Admin Pledge Agreement over KG Partnership Interest in AMD
               Saxonia pursuant to Schedule 16;

     4.1.16    AMD Admin Pledge of Bank Accounts pursuant to Schedule 17;

     4.1.17    AMD Holding Pledge Agreement over KG Partnership Interest in AMD
               Saxonia pursuant to Schedule 18;

     4.1.18    Written Acknowledgement of Sachsische Aufbaubank GmbH regarding
               the amendment of the Loan Agreement and the other Operative
               Documents contemplated herein;

     4.1.19    Written Approval of the Guarantors regarding the amendment of the
               Loan Agreement and the other Operative Documents contemplated
               herein;

     4.1.20    Written Acceptance of the Guaranty Decision executed by AMD Inc.
               and AMD Saxonia;

     4.1.21    Legal Opinion of the Law Office O'Melveny & Myers LLP, Counsel to
               AMD Inc, under U.S. law pursuant to Schedule 19;

     4.1.22    Legal Opinion of the Law Office Norr, Stiefenhofer & Lutz,
               Counsel to the AMD Companies pursuant to Schedule 20;

     4.1.23    Legal Opinion of the Law Office Baker & McKenzie, Counsel to the
               Agent and to the Banks pursuant to Schedule 21;

     4.1.24    Legal Opinion of the Law Office White & Case, Feddersen, Counsel
               to the Agent and to the Banks pursuant to Schedule 22;

                                        6



     4.1.25    Fairness Opinion from Ernst & Young relating to Management Plan
               pursuant to Schedule 23;

     4.1.26    Certified copies of the Conversion Documents duly executed and in
               notarial form (as appropriate) and/or certified by the Secretary
               of State of the State of Delaware (as appropriate);

     4.1.27    Evidence that the increase of the Total Revolving Loan Commitment
               Amount has been consented to by the banks under the Loan and
               Security Agreement of 13 July 1999, as amended.

                                      ss. 5
                                    Covenants

5.1  AMD Saxonia undertakes with the Agent and the Banks to cause certificates
     in the form attached as Annexes I and II to Schedule 22 to the Loan
     Agreement to be delivered to the Agent by AMD Inc.'s Insurance Broker
     within 60 days following the Conversion Effective Date, at the Agent's
     request.

5.2  AMD Saxonia hereby undertakes with the Agent and the Banks that:

     5.2.1     it will promptly notify the Agent of the execution of the
               Conversion Documents; and

     5.2.2     it will not make any application for Registration prior to the
               Agent having given to the Banks the written confirmation referred
               to in ss. 4.1.

5.3  Any breach by AMD Saxonia of its obligations under ss. 5.2 shall constitute
     an event which entitles the Banks to terminate the Loan Agreement pursuant
     to Section 21 thereof.

5.4  AMD Saxonia undertakes to furnish the Agent promptly (and in any event
     within twenty days of the Registration) with a certified Commercial
     Registry extract for AMD Saxonia following the Registration.

                                        7



5.5  The Agent undertakes that it shall provide to the Banks the written
     confirmation referred to in ss. 4.1 promptly following its receipt of the
     documents referred to in ss. 4.1.1 through ss. 4.1.27 in accordance with
     ss. 4.1 and to inform AMD Saxonia accordingly.

                                      ss. 6
                         Representations and Warranties

6.1  AMD Saxonia represents and warrants to the Banks, as of the date hereof and
     as of the Conversion Effective Date, as follows:

     6.1.1     AMD Saxonia has taken all necessary steps and obtained all
               necessary consents to enter into this Agreement, and, when
               entered into, will have taken all necessary steps and have
               obtained all necessary consents to enter into the Conversion
               Documents to which it is party, the Amendment Agreements to which
               it is a party and each other document referred to in ss. 4.1 to
               which it is a party in a legally binding manner and to exercise
               its rights thereunder.

     6.1.2     The execution by AMD Saxonia of this Agreement and the execution
               by each of AMD Inc., AMD Saxonia, AMD Holding, AMD Saxony LLC and
               AMD Admin of the Conversion Documents, the Amendment Agreements
               and each other document referred to in ss. 4.1 to which it is
               party, and the compliance by each of them of their obligations
               thereunder and the exercise by each of them of their rights
               thereunder:

               (i)   does not and, in the case of the Conversion Documents, the
                     Amendment Agreements and each of the documents referred to
                     in ss. 4.1 when entered into by it, will not violate any
                     provision of applicable law, any judgment or any
                     requirements or any approvals of any authority or the like
                     or contractual obligations or any other obligations
                     applicable to each of AMD Inc., AMD Saxonia, AMD Holding,
                     AMD Saxony LLC and AMD Admin;

               (ii)  does not and, in the case of the Conversion Documents, the
                     Amendment Agreements and each of the documents referred to

                                        8



                     in ss. 4.1 when entered into by it, will not result in the
                     termination or acceleration of any other obligations of
                     each of AMD Inc., AMD Saxonia, AMD Holding, AMD Saxony LLC
                     and AMD Admin;

               (iii) subject to securities to be furnished, if necessary, in
                     accordance with Secs. 204, 22 UmwG (German Act on
                     Transformation of Companies), does not and, in the case of
                     the Conversion Documents, the Amendment Agreements and each
                     of the documents referred to in ss. 4.1 when entered into
                     by it, will not result in an obligation of any of AMD Inc.,
                     AMD Saxonia, AMD Holding, AMD Saxony LLC and AMD Admin to
                     create any security in favor of any third party, save as
                     contemplated in the Security Documents or in the Loan
                     Agreement (as amended by this Agreement).

     6.1.3     This Agreement, the Conversion Documents, the Amendment
               Agreements and each other document referred to in ss. 4.1 to
               which AMD Inc., AMD Saxonia, AMD Holding, AMD Saxony LLC and AMD
               Admin is a party constitutes, or when entered into by it, will
               constitute, its legally binding obligations which are enforceable
               in accordance with their terms, subject to the reservations made
               in the Legal Opinions. Those reservations comprise limitations on
               the enforceability of legal documents which are governed by
               German law or by U.S. federal or state law if and to the extent
               that express reservations have been made in this respect in the
               Legal Opinions to be delivered to and to be approved by the Agent
               pursuant to ss. 4.1.21 through ss. 4.1.24.

                                        9



                                      ss. 7
                                  Miscellaneous

7.1  This Agreement is part of the Loan Agreement. All references in the Loan
     Agreement and in the Operative Documents and all statements and
     declarations relating thereto shall apply in the same manner to this
     Agreement.

7.2  Without prejudice to the foregoing, AMD Saxonia hereby ratifies and
     confirms that its obligations under the Loan Agreement, as amended, shall
     continue in full force and effect following the Conversion.

7.3  This Agreement and all documents referred to herein shall be deemed
     Operative Documents within the meaning of the Loan Agreement.

7.4  This Agreement may be executed in any number of counterparts and by
     different parties on separate counterparts which when taken together shall
     constitute one agreement.

7.5  Paragraphs 25.1, 27, 28 and 29 of the Loan Agreement shall apply mutatis
     mutandis to this Agreement.

7.6  The references in the Operative Documents to the General Terms and
     Conditions of the Security Agent shall relate to the version applicable
     from time to time.

                                       10



AMD SAXONY MANUFACTURING GMBH

 /s/  Dr. Hans-Raimund Deppe
- --------------------------------------------------
Dr. Hans-Raimund Deppe
Its Managing Director (Geschaftsfuhrer)



DRESDNER BANK AG,
(as Security Agent and Lending Bank)

          /s/  Prellwitz
- --------------------------------------------------
Its Signatory under power of attorney


Other Lending Banks:


KREDITANSTALT FUR WIEDERAUFBAU

          /s/  Prellwitz
- --------------------------------------------------
Its Signatory under power of attorney


DZ BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK

          /s/  Prellwitz
- --------------------------------------------------
Its Signatory under power of attorney


LANDESBANK BADEN-WURTTEMBERG

          /s/  Prellwitz
- --------------------------------------------------
Its Signatory under power of attorney


LANDESBANK SACHSEN GIROZENTRALE

          /s/  Prellwitz
- --------------------------------------------------
Its Signatory under power of attorney


                                       11



BAYERISCHE LANDESBANK GIROZENTRALE

          /s/  Prellwitz
- --------------------------------------------------
Its Signatory under power of attorney


HVB BANQUE LUXEMBOURG SOCIETE ANONYME

          /s/  Prellwitz
- --------------------------------------------------
Its Signatory under power of attorney


BAYERISCHE HYPO- UND VEREINSBANK AG; MUNCHEN

          /s/  Prellwitz
- --------------------------------------------------
Its Signatory under power of attorney


BHF-BANK AKTIENGESELLSCHAFT

          /s/  Prellwitz
- --------------------------------------------------
Its Signatory under power of attorney


COMMERZBANK AKTIENGESELLSCHAFT, Filiale Dresden

          /s/  Prellwitz
- --------------------------------------------------
Its Signatory under power of attorney


DEUTSCHE POSTBANK AG BONN

          /s/  Prellwitz
- --------------------------------------------------
Its Signatory under power of attorney


HAMBURGISCHE LANDESBANK - GIROZENTRALE -

          /s/  Prellwitz
- --------------------------------------------------
Its Signatory under power of attorney


IKB DEUTSCHE INDUSTRIEBANK AG

          /s/  Prellwitz
- --------------------------------------------------
Its Signatory under power of attorney

                                       12



LANDESBANK RHEINLAND-PFALZ - GIROZENTRALE

               /s/  Prellwitz
- ------------------------------------------
Its Signatory under power of attorney


ABN AMRO BANK (DEUTSCHLAND) AG, Frankfurt

               /s/  Prellwitz
- ------------------------------------------
Its Signatory under power of attorney


CREDITANSTALT AG, Wien

               /s/  Prellwitz
- ------------------------------------------
Its Signatory under power of attorney


THE SUMITOMO MITSUI BANKING CORPORATION, Niederlassung Dusseldorf

               /s/  Prellwitz
- ------------------------------------------
Its Signatory under power of attorney


DRESDNER BANK LUXEMBOURG S.A.
(as Agent and Paying Agent)

               /s/  Prellwitz
- ------------------------------------------
Its Signatory under power of attorney


                                       13




English translation of the legally
binding German Loan Agreement as amended.                   Amended and Restated
Translation prepared for convenience only.                  --------------------



                            SYNDICATED LOAN AGREEMENT

                              Dated 11 March 1997,

   as amended by Supplemental Agreements dated 6 February 1998, 29 June 1999,
                        20 February 2001 and 3 June 2002

                                      among

                          AMD SAXONY MANUFACTURING GMBH
                (proposed to be renamed "AMD Saxony LLC & Co KG")
                                  -as Borrower-

                                       and

                                DRESDNER BANK AG
                              - as Security Agent -

                                       and

                   THE OTHER BANKS AND FINANCIAL INSTITUTIONS
                                  named herein

                                  -as Lenders-

                                       and

                          DRESDNER BANK LUXEMBOURG S.A.
                          - as Agent and Paying Agent -

                     Baker & McKenzie/Doser Amereller Noack

                                    Frankfurt



                                     INDEX
                                     -----

Paragraph                                                                   Page
- ---------                                                                   ----

ss.1       Definitions and Interpretation .................................    2
ss.2       Facilities .....................................................   11
ss.3       Purpose ........................................................   12
ss.4       Utilization of the Facilities ..................................   12
ss.5       Conditions to Drawing ..........................................   14
ss.6       Interest, Commitment Fee, Payments .............................   20
ss.7       Term and Repayment .............................................   24
ss.8       Security .......................................................   25
ss.9       Illegality .....................................................   29
ss.10      Market Disruption; Alternative Method of Calculation ...........   29
ss.11      Increased Costs ................................................   30
ss.12      Indemnity ......................................................   31
ss.13      No Deductions or Withholdings ..................................   32
ss.14      Continuity Clause ..............................................   33
ss.15      Representations and Warranties .................................   33
ss.16      Reporting and Information Requirements .........................   37
ss.17      Covenants ......................................................   39
ss.18      Project Budget; Project Schedule ...............................   46
ss.19      Project Accounts ...............................................   46
ss.20      Consent of the Banks ...........................................   47
ss.21      Termination of the Facilities by the Banks .....................   48
ss.22      Agency Provisions ..............................................   53
ss.23      Administration of Security .....................................   56
ss.24      Paying Agent ...................................................   58
ss.25      Costs ..........................................................   59
ss.26      Assignment; Sub-participations .................................   60
ss.27      Miscellaneous ..................................................   61
ss.28      Governing Law ..................................................   65
ss.29      Jurisdiction ...................................................   65


                                       i



                                    Schedules


               
Schedule 1        Commitments of the Banks
Schedule 2        Drawdown Schedule
Schedule 3        Drawdown Notice
Schedule 4        Interest Rate Notice
Schedule 5        Notice of Prepayment
Schedule 6        Project Budget
Schedule 7        Project Schedule / Project Phases
Schedule 8        Quarterly Status Report
Schedule 9        [Scheduled Project Phase] Technical Completion Certificate (Obligors)
Schedule 10       [Scheduled Project Phase] Technical Completion Certificate (Technical Advisor)
Schedule 11       [left intentionally blank]
Schedule 12       [left intentionally blank]
Schedule 13       [left intentionally blank]
Schedule 14       Management Plan
Schedule 15       Disclosure Schedule
Schedule 16       Statement of Use and Source of Funds
Schedule 17       Financial Covenants
Schedule 18       Certificate of Compliance (Financial Covenants)
Schedule 19       Statement to Report of the Technical Advisor
Schedule 20       Governmental Approvals, Permits and Measures
Schedule 21       Confirmation of Auditor
Schedule 22       Insurance Provisions
Schedule 23       Cash Equivalent Investments
Schedule 24       Guaranty Decision
Schedule 25       AMD/Dresdner Subsidy Agreement
Schedule 26       SAB/Dresdner Subsidy Agreement
Schedule 27       AMD Inc. Guaranty
Schedule 28       Sponsors' Support Agreement
Schedule 29       Sponsors' Loan Agreement
Schedule 30       Sponsors' Subordination Agreement
Schedule 31       Sponsors' Consent and Agreement
Schedule 32       Sponsors' Guaranty
Schedule 33       AMD Holding Wafer Purchase Agreement
Schedule 34       AMD Holding Research, Design and Development Agreement
Schedule 35       AMD Saxonia Wafer Purchase Agreement
Schedule 36       AMD Saxonia Research, Design and Development Agreement
Schedule 37       Management Service Agreement
Schedule 38       License Agreement
Schedule 39       Design/Build Agreement; Contractors' Consent and Agreement
Schedule 40       Material Equipment Supply/Service Contracts; Consent and Agreement
Schedule 41       AMD Inc. Share Pledge Agreement
Schedule 42       AMD Inc. Subordination Agreement


                                       ii



                              Schedules (Continued)


               
Schedule 43       AMD Saxonia Land Charge
Schedule 44       AMD Saxonia Security Assignment of Current Assets
Schedule 45       AMD Saxonia Security Assignment of Fixed Assets
Schedule 46       AMD Saxonia Assignment of Insurances
Schedule 47       AMD Saxonia Global Assignment
Schedule 48       AMD Saxonia Charge of Project Accounts
Schedule 49       AMD Saxonia Assignment of Contractual Rights
Schedule 50       AMD Saxonia Assignment (U.S.A.)
Schedule 50a      AMD Saxonia Hedging Agreement
Schedule 51       AMD Holding Share Pledge Agreement
Schedule 52       AMD Holding Security Assignment of Current Assets
Schedule 53       AMD Holding Global Assignment
Schedule 54       AMD Holding Charge of Bank Accounts
Schedule 55       AMD Holding Assignment of Contractual Rights
Schedule 56       AMD Holding Assignment (U.S.A.)
Schedule 57       Legal Opinion of Bronson, Bronson & McKinnon LLP (Indenture, Credit Agreement)
Schedule 58       Legal Opinion of O'Melveny & Myers LLP
Schedule 59       Legal Opinion of Norr Stiefenhofer & Lutz
Schedule 60       Legal Opinion of Baker & McKenzie
Schedule 61       Legal Opinion of Feddersen Laule Scherzberg & Ohle Hansen Ewerwahn
Schedule 62       General Terms and Conditions
Scheduel 63       Maximum 65/35 Guaranty Amount


                                      iii



                            SYNDICATED LOAN AGREEMENT
                            -------------------------

                                     between

1.   AMD SAXONY MANUFACTURING GMBH (proposed to be renamed "AMD Saxony LLC & Co
     KG"), Dresden, registered in the Commercial Register of the Dresden County
     Court,

                                    - hereinafter referred to as "AMD Saxonia" -
                                                                 - as Borrower -

2.   DRESDNER BANK AG,

        - hereinafter also referred to as "Security Agent", as the case may be -

3.   The Banks and financial institutions listed in Schedule 1

       - the parties referred to at 2 and 3 hereinafter each referred to as a
                         "Bank" or together as the "Banks", as the case may be -
                                                                 - as Lenders -.

     and

4.   DRESDNER BANK LUXEMBOURG S.A.

          - hereinafter referred to as the "Agent" or the "Paying Agent", as the
                                                                   case may be -



                                    PREAMBLE
                                    --------

     1.   AMD Saxonia owns and operates a fabrication facility in Dresden for
          the manufacture of microchip silicon wafers (the "Fabrication
          Facility") together with an integrated research and development center
          (the "Design Center") (which together are referred to as the
          "Project"). Prior to its conversion to a limited partnership, AMD
          Saxonia was a wholly owned subsidiary of AMD Saxony Holding GmbH
          domiciled in Dresden, registered in the Commercial Register of the
          Dresden County Court under HRB 13931 ("AMD Holding") whose sole
          shareholder is Advanced Micro Devices, Inc., a Delaware corporation of
          One AMD Place, Sunnyvale, California 94088 - 3453 ("AMD Inc.").

     2.   The investment cost required for implementation of the Project has
          been partially financed in an amount of up to DM 1,500,000,000 through
          the credit facilities made available to AMD Saxonia on and subject to
          the terms and conditions of this syndicated loan agreement (the
          "Agreement").

     3.   AMD Inc. made available to AMD Saxonia, via AMD Holding, equity in the
          form of ordinary share capital in an aggregate amount of DM
          217,550,000, together with subordinated loans pursuant to the terms of
          the Sponsors' Support Agreement and the





          Sponsors' Loan Agreement, totalling in aggregate DM 645,000,000 as at
          31 December 1999. Furthermore, AMD Inc. has undertaken to make
          available to AMD Saxonia subordinated revolving loans in an aggregate
          amount of US$750,000,000 pursuant to the Revolving Loan Facility
          Agreement (as defined below) to finance the general corporate funding
          requirements of AMD Saxonia.

     4.   The Free State of Saxony has agreed to provide regional aid for the
          Project comprising (i) a dedicated purpose investment grant in an
          aggregate amount of DM 476,687,000 (which together with investment
          subsidies in an aggregate amount of DM 23,813,000 totals an aggregate
          amount of DM 500,500,000), and (ii) a dedicated purpose interest
          subsidy in an amount of DM 300,000,000 which in each case will be paid
          to AMD Saxonia by Dresdner Bank AG in Dresden, in its capacity as
          house bank.

     5.   Pursuant to the Conversion Documents, AMD Saxonia has changed its
          legal form to a Limited Partnership.

     6.   The Banks have agreed to make available to AMD Saxonia the facilities
          referred to above on and subject to the following terms and
          conditions.

IT IS AGREED AS FOLLOWS:

                                      ss. 1

                         Definitions and Interpretation

1.1  Definitions of terms not defined above are as follows:

Agreed Terms:
     in respect of any document, that document substantially in the form thereof
     which has been initialled (for the purposes of identification) by or on
     behalf of AMD Saxonia and the Agent.

AMD/Dresdner Subsidy Agreement (AMD/Dresdner Zuschussvertrag):
     the agreement between AMD Saxonia and Dresdner Bank AG in its capacity as
     house bank to AMD Saxonia, in the form set out in Schedule 25.
                                                       -----------

AMD Admin:
     AMD Saxony Admin GmbH, a limited liability company, with its seat in
     Dresden, a wholly-owned subsidiary of AMD Holding.

AMD Companies (AMD-Gesellschaften):
     together AMD Saxonia, AMD Holding, AMD Saxony LLC, AMD Admin and AMD Inc.

AMD Holding Wafer Purchase Agreement:
     the agreement between AMD Holding and AMD Inc., in the form set out in
     Schedule 33.
     -----------

AMD K6 microprocessor:
     the Microsoft Windows compatible general purpose microprocessor under
     development by AMD Inc. to compete with Intel Corporation's Pentium Pro
     microprocessor.

                                       2



AMD Saxonia Partnership Agreement (AMD Saxonia Gesellschaftsvertrag):
     the partnership agreement of AMD Saxonia between AMD Holding, AMD Admin and
     AMD Saxony LLC dated 3 June 2002.

AMD Saxonia Wafer Purchase Agreement:
     the agreement between AMD Saxonia and AMD Holding, in the form set out in
     Schedule 35.

AMD Saxony LLC:
     a limited liability company organised under the laws of the State of
     Delaware, United States of America, a wholly-owned subsidiary of AMD Inc.

Amendment Agreements (Nachtragsvereinbarungen):
     the following agreements and documents, each dated 3 June 2002:

     (i)    the Amendment Agreement No. 4 to this Syndicated Loan Agreement
            between AMD Saxonia, the Security Agent, the Banks and the Agent;

     (ii)   the Accession Agreement and Fourth Amendment to the Sponsors'
            Support Agreement between the Sponsors, AMD Saxony LLC, AMD Admin,
            the Agent and the Security Agent;

     (iii)  the Third Amendment to the AMD Saxonia Wafer Purchase Agreement
            between AMD Holding and AMD Saxonia;

     (iv)   the Consent/Acknowledgement under the AMD Holding Wafer Purchase
            Agreement executed by AMD Holding, AMD Inc. and the Security Agent;

     (v)    the Accession Agreement and Second Amendment to the Sponsors'
            Subordination Agreement between the Sponsors, AMD Saxony LLC, AMD
            Admin, AMD Saxonia, the Agent and the Security Agent;

     (vi)   the Accession Agreement and Second Amendment to the AMD Inc.
            Subordination Agreement between the Sponsors, AMD Saxony LLC, AMD
            Admin, the Agent and the Security Agent;

     (vii)  the First Amendment to the Revolving Loan Facility Agreement between
            the Sponsors and AMD Saxonia;

     (viii) the Third Amendment to the Sponsors' Loan Agreement between the
            Sponsors and AMD Saxonia;

     (ix)   the First Amendment to the AMD Saxonia Assignment (U.S.A.) between
            AMD Saxonia and the Security Agent; and

     (x)    the Clarification and Security Agreement between the AMD Companies,
            the Agent and the Security Agent.

                                       3



Assignment and Trust Agreement:
     the agreement referred to in (ix) of the definition of Conversion
     Documents.

Available Revolving Loan Facility Amount:
     means, on any date, any amount (which must be positive) of:

     (i)  the Total Revolving Loan Commitment Amount on such date;

     less

     (ii) the aggregate unpaid principal amount of all Revolving Loans
          outstanding on such date.

Auditor (Wirtschaftsprufer):
     Ernst & Young Wirtschaftsprufungsgesellschaft mbH or such other firm of
     auditors charged with duties relating to the Project as may be appointed by
     AMD Saxonia with the consent of the Agent, such consent not to be
     unreasonably withheld.

Banks' Auditor (Wirtschaftsprufer der Banken):
     BDO Deutsche Warentreuhand AG Wirtschaftsprufungsgesellschaft or such other
     firm of auditors charged with duties relating to the Project as may be
     appointed by the Banks with the consent of AMD Saxonia, such consent not to
     be unreasonably withheld.

Banking Day (Bankarbeitstag):
     each day on which banks are generally open for business in London,
     Frankfurt am Main, Dresden and Luxembourg.

Capital Expenditure (Investitionskosten):
     acquisition and manufacturing costs in respect of fixed and movable assets
     in accordance with ss. 266 2 A II of the Commercial Code and acquisition
     costs for intangible assets in accordance with ss. 266 2 A I of the
     Commercial Code, to the extent the same have a useful operational life of
     more than one year (not being expenditures chargeable to the profit and
     loss account).

Completion (Fertigstellung):
     the date on which the initial satisfaction of all conditions set forth in
     the Technical Completion Certificate (Obligors) and the Technical
     Completion Certificate (Technical Advisor) set out in Schedules 9 and 10 is
     confirmed to the Agent by the submission of properly executed originals of
     such Certificates.

Conversion (Umwandlung):
     the change in legal form of AMD Saxonia from a Gesellschaft mit
     beschrankter Haftung (a limited liability company) to a Limited Partnership
     in accordance with the Conversion Documents and the Registration.

Conversion Documents (Umwandlungsdokumente):
     means the following agreements and documents, each in the Agreed Terms:

                                       4



     (i)     the Certificate of Formation of AMD Saxony LLC;

     (ii)    the AMD Admin Articles of Association;

     (iii)   the Formation Protocol for AMD Admin;

     (iv)    the Application to the Commercial Register for Formation of AMD
             Admin;

     (v)     the Resolution of AMD Holding as Shareholder of AMD Admin relating
             to the releases of the managing director from the restrictions of
             Section 181 German Civil Code;

     (vi)    the List of Shareholders for AMD Admin;

     (vii)   the AMD Saxony LLC Agreement;

     (viii)  the AMD Saxonia Partnership Agreement;

     (ix)    the Assignment and Trust Agreement between AMD Holding and AMD
             Saxony LLC;

     (x)     the Purchase and Assignment Agreement between AMD Holding and AMD
             Admin;

     (xi)    the Resolution of AMD Holding as Shareholder of AMD Saxonia for
             Transfer of Fractional Share to AMD Saxony LLC;

     (xii)   the Notification to AMD Saxonia of Assignment of Fractional Share
             to AMD Admin;

     (xiii)  the List of Shareholders of AMD Saxonia (reflecting addition of AMD
             Admin);

     (xiv)   the Resolution of AMD Holding and AMD Saxony LLC as Shareholders of
             AMD Saxonia for Transfer of Fractional Share to AMD Admin;

     (xv)    the Notification to AMD Saxonia of Assignment of Fractional Share
             to AMD Saxony LLC;

     (xvi)   the List of Shareholders of AMD Saxonia (reflecting addition of AMD
             Saxony LLC);

     (xvii)  the Resolution of AMD Holding, AMD Admin and AMD Saxony LLC as
             Shareholders of AMD Saxonia Approving Conversion to Limited
             Partnership;

     (xviii) the Resolution of AMD Inc. as Shareholder of AMD Holding Approving
             Conversion of AMD Saxonia;

     (xix)   Application to the Commercial Register for Conversion of AMD
             Saxonia to Limited Partnership;

                                       5



     (xx)    Application to the Real Estate Register for Change in AMD Saxonia's
             Name;

     (xxi)   the Transfer Agreement for Transfer Back Of Fractional Share
             between AMD Holding and AMD Saxony LLC;

     (xxii)  Application to the Commercial Register for Transfer Back of
             Fractional Share by AMD Saxony LLC to AMD Holding;

     (xxiii) Power of Attorney regarding Removal of AMD Saxony LLC as General
             Partner of AMD Saxonia; and

     (xxiv)  any other agreement or document designated by the AMD Companies
             (with the consent of the Agent) in addition to or in substitution
             for any of the above-named documents or agreements as a "Conversion
             Document."

Conversion Effective Date (Umwandlungsstichtag):
     the date on which the Registration takes effect.

Disclosure Schedule:
     the list of matters disclosed by AMD Saxonia set out in Schedule 15.

Drawdown Notice (Auszahlungsverlangen):
     a Drawdown Notice in the form of the specimen set out in Schedule 3.

Drawdown Schedule (Auszahlungsplan):
     the drawdown schedule set out in Schedule 2, as the same may be revised in
     accordance with the Project Budget.

Equipment Supply Contract (Liefervertrag):
     each agreement (also in the form of an order) between AMD Saxonia and
     suppliers (including AMD Inc. or one of its affiliates) relating to the
     acquisition by, and delivery to, AMD Saxonia of fixed or tangible current
     assets for the Project but excluding Excepted Software Agreements.

Event of Default (Kundigungsgrund):
     any event which would entitle a party to an Operative Document, possibly
     after the giving or expiry of notice and/or lapse of time, to terminate the
     relevant Operative Document.

Euro:
     the currency introduced at the start of the third stage of economic and
     monetary union pursuant to the treaty establishing the European Community,
     as amended by the treaty on European Union effective January 1, 1999.

Excepted Software Agreements (Ausgenommene Softwarevertrage):
     means software licenses and software service agreements entered into by AMD
     Saxonia which are used exclusively:

                                       6



     (i)   for financial planning, business administration systems and similar
           ancillary administrative functions and which are not linked to, or
           connected with (a) the production process in the Fabrication
           Facility; (b) general bookkeeping and invoicing and (c) production
           planning; or

     (ii)  in the Design Center.

Facilities (Kredite):
     as defined in ss. 2.1.

Guarantors (Burgen):
     the Federal Republic of Germany and the Free State of Saxony in their
     respective capacities as guarantors pursuant to the 65/35 Guaranty.

Guaranty Decision (Burgschaftsentscheidung):
     the decision dated 2 July 1996 set out in Schedule 24 concerning the
     guaranty application made by AMD Saxonia, including the following
     documents:

     (i)   the specimen credit agreement F 13.09.1990 (1993 Edition)
           Federal/State or THA;

     (ii)  the General Terms and Conditions applicable to the assumption of
           Guaranties by the Federal Republic of Germany and the States of the
           Accession Territory (States) in the edition dated F 04.01.1993
           Federal/State;

     (iii) Notes relating to applications for guaranties and loans of the
           Treuhandanstalt Berlin and/or Federal and State guaranties for
           projects in the Accession Territory in the edition dated 1993 F
           12.10.1990;

     (iv)  the Memorandum of Understanding ("Gemeinsame Feststellungen") of 19
           February 1997, the Amendment Decision of 12 December 1997 and the
           letter from C&L Deutsche Revision AG dated 5 January 1998;

     (v)   the letters from C&L Deutsche Revision AG to Dresdner Kleinwort
           Benson and Dresdner Kleinwort Wasserstein, respectively, dated 17
           November 2000 and 7 February 2001; and

     (vi)  the letter from C&L Deutsche Revision AG to Dresdner Kleinwort
           Wasserstein/Dresdner Bank AG dated 22 May 2002.

65/35 Guaranty (65/35 Burgschaft):
     the several maximum amount shortfall guaranties issued by each of the Free
     State of Saxony (26%) and the Federal Republic of Germany (39%) in
     accordance with the Guaranty Decision up to a maximum aggregate amount of
     65% of the Facilities (in aggregate DM 975,000,000), together with the
     shortfall of interest and costs, vested with a first right of satisfaction
     in favor of the Banks over all security granted by the AMD Companies as
     security for the Banks' risk of recovery (but subject to a set off of 65%
     of payments made (if any) under the Sponsors' Guaranty in the form of
     Schedule 32, as

                                       7



     amended, to this Agreement against the Guarantors' obligations under the
     aforesaid shortfall guaranties).

Insurance Advisor (Versicherungsberater):
     Willis Ltd., London or such other insurance advisor as may from time to
     time be appointed by the Agent with the consent of AMD Saxonia, which
     consent shall not be unreasonably withheld.

Interest Period (Zinsperiode):
     the interest periods to be designated for individual advances, in each case
     in accordance with ss.ss. 6.1 to 6.4.

Lending Office (kreditausreichende Geschaftsstelle):
     the lending office of each Bank referred to in Schedule 1 to this
     Agreement.

LIBOR-Rate (LIBOR-Satz):
     the LIBOR-rate so defined in ss. 6.1.1.

Limited Partnership (Kommanditgesellschaft):
     a limited partnership (Kommanditgesellschaft) under the laws of the Federal
     Republic of Germany.

Management Plan:
     the management plan in the form set out in Schedule 14.

Material Service Contract (wesentlicher Leistungsvertrag):
     each Service Contract

     (i)   pursuant to which AMD Saxonia incurs obligations in aggregate in
           excess of DM 2,500,000 during the term of the contract, or

     (ii)  which has an initial term in excess of 12 months, or which has an
           indefinite term, and in either case cannot be terminated by AMD
           Saxonia on less than 12 months' notice; or

     (iii) which is listed in Part I of Schedule 40.

Material Equipment Supply Contract (wesentlicher Liefervertrag):
     is each Equipment Supply Contract:

     (i)   pursuant to which AMD Saxonia incurs obligations in aggregate in
           excess of DM 3,750,000, or

     (ii)  which has an initial term in excess of 12 months, or which has an
           indefinite term, and in either case cannot be terminated by AMD
           Saxonia on less than 12 months' notice; or

     (iii) which is listed in Part I of Schedule 40.

                                       8



Minimum Liquidity Covenant (Mindestliquiditatskennzahl):
     as defined in Schedule 17, ss. 4.

Operative Documents (Transaktionsdokumente):
     each of the following:

     (i)   the Project Agreements;

     (ii)  this Agreement, the Sponsors' Support Agreement, the Sponsors' Loan
           Agreement in the form set out in Schedule 29, the Security Documents,
           the Sponsors' Consent and Agreement in the form set out in Schedule
           31, the AMD Saxonia Hedging Agreement in the form set out in Schedule
           50a, the AMD/Dresdner Subsidy Agreement, the SAB/Dresdner Subsidy
           Agreement, the Sale and Settlement Agreement between AMD Saxonia and
           the City of Dresden dated 11 June 1996, together with amendments
           dated 25 October 1996 and 28 February 1997, and the Revolving Loan
           Facility Agreement;

     (iii) the Loan and Security Agreement dated as of July 13, 1999, as
           amended, between, inter alia, AMD Inc. and the Bank of America
           National Trust and Savings Association, the Management Plan, the
           Project Budget, the Project Schedule, the Plans and Specifications,
           the Information Memorandum of AMD Saxonia of September 1996, the
           [Scheduled Project Phase] Technical Completion Certificates
           (Obligors), the [Scheduled Project Phase] Technical Completion
           Certificates (Technical Advisor), in the form set out in Schedules 9
           and 10, the Statement of the Use and Source of Funds, in the form set
           out in the Schedule 16, and each Consent and Agreement required
           pursuant to the agreements referred to in this definition in the form
           set out in Part II of Schedule 40, Annex 3 to Schedule 49, Annex 3 to
           Schedule 55 or in such other form to which the Agent has consented;

     (iv)  each of the Conversion Documents and each of the Amendment
           Agreements; and

     (v)   all other Operative Documents within the meaning of the Sponsors'
           Support Agreement and each other instrument or document designated by
           the Agent (with the consent of AMD Saxonia) as an Operative Document
           under this Agreement or the Sponsors' Support Agreement.

Plans and Specifications (Plane und Spezifikationen):
     the plans and specifications to be prepared by AMD Saxonia and to be
     approved by the Technical Advisor, the Agent and each Sponsor for the
     fitting out of the Plant and the Design Center, as the same may be amended
     from time to time with the consent of each of the AMD Companies and the
     Agent. Amendments which do not reduce or affect the value of the Plant and
     the Design Center or the capacity and purpose of the Plant as set out in
     the Plans and Specifications originally approved, shall not require the
     consent of the Agent.

Power of Attorney (Vollmacht):
     the document referred to in (xxiii) of the definition of Conversion
     Documents.

                                       9



Project Accounts (Projektkonten):
     as defined in ss. 19.1.

Project Agreements (Projektvertrage):
     the AMD Saxonia Wafer Purchase Agreement, the AMD Holding Wafer Purchase
     Agreement, the AMD Saxonia Research, Design and Development Agreement, in
     the form set out in Schedule 36, the AMD Holding Research, Design and
     Development Agreement, in the form set out in Schedule 34, the Management
     Service Agreement, in the form set out in Schedule 37, the License
     Agreement, in the form set out in Schedule 38, the Design/Build Agreement,
     in the form set out in Schedule 39, the Equipment Supply Contracts, the
     Service Contracts, the AMD Inc. Guaranty, in the form set out in Schedule
     27 and each other instrument or document designated by the Agent (with the
     consent of AMD Saxonia) as a Project Agreement for the purposes of this
     Agreement.

Project Budget (Projektbudget):
     the budget set out in Schedule 6, including such amendments thereto made
     with the consent of the Agent in accordance with ss. 18.2 of this
     Agreement.

Project Costs (Projektkosten):
     all Capital Expenditure and other costs which are incurred by AMD Saxonia
     in connection with the Project.

Project Phase (Projektabschnitt):
     each project phase set out in the Project Schedule contemplated for the
     implementation of the Project.

Project Schedule (Projektzeitplan):
     the timetable in the form set out in Schedule 7, including amendments
     thereto made with the consent of the Agent in accordance with ss. 18.2 of
     this Agreement.

Reference Rate (Basissatz):
     the reference rate so defined in ss. 6.1.1.

Reference Banks (Referenzbanken):
     the Agent together with Commerzbank AG and ABN AMRO Bank (Deutschland) AG
     or such other Banks designated by the Agent in their stead, subject to the
     approval of AMD Saxonia, such approval not to be unreasonably withheld.

Registration (Eintragung):
     the registration of the Conversion with the Commercial Register in Dresden.

Revolving Loans:
     the subordinated unsecured revolving loans made by the Sponsors under the
     terms of the Revolving Loan Facility Agreement.

                                       10



Revolving Loan Facility Agreement:
         the $750,000,000 subordinated unsecured Revolving Loan Facility
         Agreement dated 20 February 2001 between AMD Inc., AMD Holding, and AMD
         Saxonia, as amended by the First Amendment to the Revolving Loan
         Facility Agreement dated 3 June 2002.

SAB/Dresdner Subsidy Agreement (SAB/Dresdner Zuwendungsvertrag):
         the agreement between the Sachsische Aufbaubank GmbH, Dresden and
         Dresdner Bank AG, Dresden in its capacity as house bank to AMD Saxonia,
         in the form set out in Schedule 26.

Security Documents (Sicherheitenvertrage):
         the agreements and other documents referred to in ss. 8.1.

Service Contract (Leistungsvertrag):
         each contract in respect of services to be performed in favor of AMD
         Saxonia (with the exception of the AMD Saxonia Wafer Purchase
         Agreement, the Management Service Agreement as set out in Schedule 37
         and employment contracts) which is not an Equipment Supply Contract but
         excluding Excepted Software Agreements.

Sponsors (Sponsoren):
         together, AMD Inc. and AMD Holding.

Sponsors' Support Agreement:
         the agreement entered into between AMD Inc., AMD Holding, AMD Saxony
         LLC, AMD Admin, the Agent and the Security Agent entitled "Sponsors"
         Support Agreement".

Subsidy Agreement (Zuschussvertrag/Zuwendungsvertrag):
         together, the AMD/Dresdner Subsidy Agreement and the SAB/Dresdner
         Subsidy Agreement.

Substitution (Komplementarwechsel):
         the substitution of AMD Admin as general partner of AMD Saxonia in
         place of AMD Saxony LLC, pursuant to the AMD Saxonia Partnership
         Agreement.

Technical Advisor (Technischer Berater):
         Fraunhofer Institut fur Siliziumtechnologie, Itzehoe, or such other
         technical advisor as may be appointed by the Agent with the consent of
         AMD Saxonia, which consent shall not be unreasonably withheld.

Total Revolving Loan Commitment Amount:
         means US$750,000,000 (seven hundred and fifty million US Dollars) or
         the "Euro Equivalent" (under, and as defined in, the Revolving Loan
         Facility Agreement) thereof, or such reduced amount as shall have been
         agreed upon by each of the Sponsors, AMD Saxonia, the Agent, and the
         Banks.

US GAAP:
         the generally accepted accounting principles as set forth from time to
         time in the opinions and pronouncements of the United States Accounting
         Principles Board and the American

                                       11



         Institute of Certified Public Accountants and statements and
         pronouncements of the Financial Accounting Standards Board (or agencies
         with similar functions of comparable stature and authority within the
         U.S. accounting profession), which are applicable to the circumstances
         as of the date of determination.

1.2      The terms referred to in the introduction to this Agreement, in the
         Preamble and in ss. 1.1 above shall, except where the context otherwise
         requires, have the same meanings when used in this Agreement. Unless
         the context requires otherwise, such terms shall also have such
         meanings when used in agreements, written notifications, confirmations
         and other documents which are issued pursuant to the terms of this
         Agreement. Unless the context requires otherwise, any reference to an
         Operative Document or a Project Agreement (including, in each case, any
         reference thereto as being in the form set out in a Schedule to this
         Agreement) shall be a reference to such Document or Agreement as it
         shall have been, or from time to time be, amended, varied, re-issued,
         replaced, novated or supplemented, in each case, in accordance with its
         terms and this Agreement. Any reference in this Agreement to the stated
         capital (Stammkapital) of AMD Saxonia shall, following the Conversion
         Effective Date, be deemed to be a reference to the capital (Haftsummen
         and Pflichteinlagen) of a Limited Partnership. Any reference to any
         other term which, in connection with AMD Saxonia, relates to the
         capital structure of a German limited liability company shall,
         following the Conversion Effective Date, be deemed to be a reference to
         that term which corresponds thereto in the context of the capital
         structure of a partnership.

                                      ss. 2
                                   Facilities

2.1      The Banks hereby agree to make available to AMD Saxonia a long term
         investment loan in an amount of up to DM 1,500,000,000 (in words: one
         billion five hundred million Deutsche Marks) (hereinafter "Facility A"
         or the "Facilities", as the case may be). The Facilities will be made
         available by each of the Banks in an amount corresponding to its
         commitment as set out in Schedule 1, as amended.

2.2      Each Bank shall make available its respective commitment under the
         Facilities pursuant to ss. 2.1 and Schedule 1, separately and
         independently from each other Bank, through its Lending Office. AMD
         Saxonia may draw the Facilities from all the Banks only in the
         proportion of their respective commitments in accordance with ss. 2.1
         and Schedule 1. No Bank shall be liable to provide or make available
         any advance in respect of amounts to be provided or made available by
         the other Banks; any joint and several liability of the Banks is hereby
         excluded. The Paying Agent shall be obliged to distribute to AMD
         Saxonia the advances to be made by the other Banks only to the extent
         that the Paying Agent has in fact received payment of such advances.
         Each Bank shall have a claim against AMD Saxonia in the amount of
         advances made by such Bank, secured pro rata by the security to be
         granted in accordance with the terms and conditions of this Agreement.

                                       12



2.3      The failure by any Bank to comply with its obligations under this
         Agreement shall not affect either the enforceability of this Agreement
         as a whole or the obligations of any other party. In such case, AMD
         Saxonia shall have a claim solely against the defaulting Bank.

                                      ss. 3
                                     Purpose

3.1      Facility A shall be used only for the purpose of the partial financing
         of the Project Costs. Utilization of Facility A to finance Project
         Costs which are not Capital Expenditure is permitted only up to a
         maximum amount of DM 100,000,000 and only in respect of costs incurred
         before 1 January 1999.

3.2      The use and source of funds in respect of each Project Phase shall be
         evidenced by furnishing to the Agent a statement of the use and source
         of funds, in the form set out in Schedule 16, certified by the Auditor,
         such statement to be delivered simultaneously with the Scheduled
         Project Phase Technical Completion Certificates pursuant to Schedules 9
         and 10 for the relevant Project Phase and in any event promptly after
         the expiry of each calendar quarter, save as may, in individual cases,
         be otherwise agreed with the Agent.

                                      ss. 4
                          Utilization of the Facilities

4.1      To the extent that all the conditions precedent set out in ss.5 are
         satisfied, the Facilities may be drawn on and subject to the following
         terms and conditions by the delivery to the Paying Agent, with a copy
         to the Agent, of a written Drawdown Notice to be received by the Paying
         Agent, in the case of the first Drawdown Notice at least ten (10)
         Banking Days before the drawdown date and, in the case of any other
         Drawdown Notice five (5) Banking Days before the drawdown date, set out
         in such notice:

4.2      Facility A

         Prior to Completion, advances shall be made up to the cumulative limit
         in each Project Phase set out in the Drawdown Schedule in accordance
         with the Project Schedule. Such limit and any advances drawn after
         Completion shall not, however, without the prior written consent of the
         Guarantors, be greater than the maximum guaranty amount for any
         calendar year prescribed by the Guarantors pursuant to Schedule 63.
         Advances shall be in minimum amounts of DM 15,000,000 and in integral
         multiples of DM 5,000,000 or in an equal amount to the undrawn portion
         of Facility A. No more than one advance may be made in any calendar
         month.

         Drawdowns in any Project Phase are permitted only in the amount of
         Project Costs which have been incurred during the same Project Phase,
         as the same are documented by invoices and other supporting evidence to
         be furnished together with the Drawdown Notice, as required below.
         Drawdowns in a current Project Phase are however permitted in respect
         of Project Costs which are shown to have been incurred in respect of an
         invoice for goods or services performed or delivered, submitted in the
         last thirty days prior to the end of a prior Project Phase and which
         have been included in full in the first Drawdown

                                       13



         Notice of such current Project Phase. The preceding two sentences shall
         not apply to drawdowns requested following Completion.

         Drawdown Notices, and the confirmation contained therein from AMD
         Saxonia in the form set out in Schedule 3, shall be furnished to the
         Agent and the Paying Agent at the same time. The following documents
         shall be furnished to the Agent together with relevant Drawdown Notice:

         (i)      written confirmation of the Managing Directors
                  Geschaftsfuhrung) of AMD Saxonia and an authorized
                  representative of AMD Inc. that the conditions precedent
                  referred to in ss.ss. 5.2.2 to 5.2.4 with respect to it have
                  been satisfied at the time of the Drawdown Notice;

         (ii)     in respect of drawdowns requested prior to Completion only,
                  unless the Agent has waived the same, copies of invoices and a
                  description in reasonable detail of the deliveries and
                  services performed in respect of amounts which are at least
                  equal to the amount proposed to be drawn. Project Costs which
                  are not Capital Expenditure may be supported by evidence other
                  than invoices, in such form as is reasonably satisfactory to
                  the Agent;

         (iii)    in respect of drawdowns requested prior to Completion only,
                  written confirmation of the Auditor that the amounts invoiced
                  are, or were, to the extent already paid, due and any
                  contractually agreed retentions and other deductions, such as
                  discounts, have been deducted in each case, in the form set
                  out in Schedule 21, as amended.

         Amounts drawn and subsequently repaid may not be reborrowed.

4.2.2    [left intentionally blank]

4.2.3    [left intentionally blank]

4.3      Drawings of the Facilities are not permitted after 29 June 2001.

4.4      Drawings under the Facilities shall be permitted only to the extent
         that the making of an advance would not result in the total amount
         advanced by the Banks exceeding by more than three times the total
         amount paid up on the ordinary share capital of AMD Saxonia and the
         total amount of subordinated loans advanced to AMD Saxonia (but
         excluding, for this purpose, Revolving Loans) and/or cash contributions
         made to the reserves and not repaid in accordance with Section 6.3
         second sentence of the Sponsors' Support Agreement and used for Project
         Costs.

4.5      Advances under the Facilities will be made available to AMD Saxonia by
         the Paying Agent crediting AMD Saxonia's *** with the Agent.

- --------------------
*** Confidential information omitted and filed separately with the Securities
    and Exchange Commission.

                                       14



4.6      The Banks shall be entitled to reject Drawdown Notices from AMD Saxonia
         if and to the extent that AMD Saxonia has assigned or charged its
         claims under this Agreement to any third party or if such claims have
         been subject to an attachment order without the consent of the Banks or
         if AMD Saxonia is in default in the payment of any amount due or is in
         breach of a material obligation, under this Agreement.

                                      ss. 5
                              Conditions to Drawing

5.1      Initial utilization of the Facilities is subject to the satisfaction of
         the conditions set out in ss. 4 and all the following conditions
         (including those set out in ss. 5.2) at the date of the Drawdown Notice
         and written confirmation from the Agent and/or the Paying Agent that it
         has received a duly completed Drawdown Notice and confirmation from the
         Agent that it has received the documents referred to in ss. 5.1.1 to
         5.1.16.

5.1.1    Written confirmation of the Chief Financial Officer of AMD Inc. ***

5.1.2    Written confirmation from AMD Saxonia and AMD Inc. that as at the date
         of the initial Drawdown Notice all material governmental approvals,
         consents and measures which are necessary for the implementation and
         ongoing operation of the Project in accordance with the Plans and
         Specifications and the Operative Documents are available, or have been
         taken, as the case may be, which, according to the progress of the
         Project are appropriate and there is no reason to believe that the
         same will be revoked, restricted or made subject to conditions or that
         governmental approvals, consents and measures necessary at a later
         stage of the Project will not be obtained or taken in a timely
         fashion. Schedule 20 contains a list of all material approvals,
         consents and measures within the meaning referred to above. To the
         extent applicable as aforesaid and if any Bank should so reasonably
         require, AMD Saxonia shall furnish the Agent with certified copies of
         all relevant documents required for the performance of the Operative
         Documents, and of the governmental approvals, consents and measures
         necessary for the operation of the Fabrication Facility and the Design
         Center.

5.1.3    Confirmation from AMD Inc. that as at the date of the initial Drawdown
         Notice all consents or approvals necessary from third party creditors
         in relation to the indebtedness or contingent liabilities of AMD Inc.
         and in relation to the execution, delivery and performance by each of
         the AMD Companies of their existing obligations and the subject matter
         of the Operative Documents have been obtained.

5.1.4    Receipt of an extract from the Land Register confirming that AMD
         Saxonia has been registered in the Register as the owner of parcels
         referred to as nos. Folio 851 parcels nos. 150/2, 121/2, 122, 123, 124,
         125/2, 126, 127, 128/2, 129/3, 130, 131, 132, 133/1, 134, 135, 136,
         137, 138, 139, 140, 141, 142, 143, 143a, 144, 145, 146, 147, 148, 149,
         151/2, 152, 153, 154/2, 155, 156, 157, 158, 159, 160/1, 160/2, 161,
         162, 694/1 in the County Court of Dresden von Wilschdorf and that the
         land charge to be granted in accordance with ss. 8.1.6 has been
         registered and that there are no prior registered charges.

- --------------------
*** Confidential information omitted and filed separately with the Securities
    and Exchange Commission.

                                       15



5.1.5    All fees to be borne by AMD Saxonia pursuant to this Agreement and the
         other Operative Documents, to which the Agent, the Security Agent, the
         Paying Agent or the Banks are party, and other payments relating to
         costs incurred pursuant to ss. 25.1 which are due have been paid.

5.1.6    The Agent has received the following duly executed legally binding
         documents whose effectiveness is not conditional (save solely in
         respect of any condition relating to this Agreement):

         (i)      all Security Documents pursuant to ss. 8 with the exception of
                  such Consents and Agreements required in accordance with this
                  Agreement and the Security Documents set out in Schedules 49
                  and 55 which are to be furnished together with the relevant
                  contracts when the same are entered into

         (ii)     Sponsors' Support Agreement, in the form set out in Schedule
                  28

         (iii)    AMD Saxonia Wafer Purchase Agreement, in the form set out in
                  Schedule 35.

         (iv)     AMD Holding Wafer Purchase Agreement, in the form set out in
                  Schedule 33.

         (v)      AMD Saxonia Research, Design and Development Agreement, in the
                  form set out in Schedule 36.

         (vi)     AMD Holding Research, Design and Development Agreement, in the
                  form set out in Schedule 34.

         (vii)    Management Service Agreement, in the form set out in Schedule
                  37.

         (viii)   License Agreement in the form set out in Schedule 38.

         (ix)     Sponsors' Loan Agreement, in the form set out in Schedule 29.

         (x)      Sponsors' Consent and Agreement, in the form set out in
                  Schedule 31.

         (xi)     Design/Build Agreement including Contractor's Consent and
                  Agreement, in the form set out in Schedule 39.

         (xii)    copies, certified by a lawyer as true copies, of Material
                  Equipment Supply Contracts and Material Service Contracts (to
                  the extent executed as at the date of the initial Drawdown
                  Notice), including relevant Consents and Agreements in the
                  form set out in Schedule 40 Part II, Annex 3 of Schedule 49 or
                  in such other form as the Agent has consented to as well as
                  all other Consents and Agreements required in accordance with
                  the Security Documents in the form set out in Schedules 49 and
                  55.

         (xiii)   AMD/Dresdner Subsidy Agreement (Zuschussvertrag).

         (xiv)    SAB/Dresdner Subsidy Agreement (Zuwendungsvertrag).

                                       16



         (xv)     AMD Saxonia Hedging Agreement in the form set out in Schedule
                  50a.

         (xvi)    confirmation in writing from the State Ministry of Saxony for
                  Economics and Labour that it has received a Letter from the
                  European Commission confirming its non-objection to the
                  interest subsidies to be paid under the Subsidy Agreements.

         (xvii)   Sale and Settlement Agreement between AMD Saxonia and the City
                  of Dresden dated 11 June 1996, together with amendments dated
                  25 October 1996 and 28 February 1997.

5.1.7    The Agent has received from AMD Saxonia, AMD Holding and AMD Inc.
         respectively, confirmation that, as at the date of relevant Drawdown
         Notice, subject to any disclosure to the contrary in the Disclosure
         Schedule set out in Schedule 15, (i) its representations and warranties
         in the Operative Documents are true and accurate in all material
         respects as at such date; (ii) none of the events referred to in ss. 21
         has occurred and is continuing, (iii) each of the Operative Documents
         to which it is a party is legally binding on it and in full force and
         effect and (iv) there has been no breach by AMD Saxonia of such
         Operative Documents.

5.1.8    The Agent has been furnished with the following documents:

         (i)      Documents relating to AMD Inc.

                  (a)      a certificate of incorporation of AMD Inc. together
                           with any amendments thereto duly certified by the
                           Secretary of State of the State of Delaware, USA;

                  (b)      a certificate of the Secretary of State of the State
                           Delaware, USA, referring to the certificate of
                           incorporation of AMD Inc. and any amendments and
                           confirming that the same are the only charter
                           documents furnished to the Secretary of State
                           concerning AMD Inc., that AMD Inc. is incorporated in
                           the State of Delaware, USA, and is in good standing
                           and at the date of the certificate all franchise
                           taxes due up to that date have been paid;

                  (c)      a certificate signed by the Secretary of State of the
                           State of California, USA, in customary form,
                           confirming that under Californian law, AMD Inc.
                           satisfies all the conditions for intra-state business
                           and as at the date of the confirmation is entitled to
                           engage in intra-state business, subject to any
                           required permits of the State of California otherwise
                           required;

                  (d)      a duly signed confirmation of the Recorder of Deeds
                           of New Castle County, Delaware, USA, in customary
                           form, confirming that a certified copy of the
                           certificate of incorporation of AMD Inc. together
                           with all amendments referred to in the certificate
                           delivered pursuant to ss. 5.1.8 (b), has been
                           furnished to his office;

                  (e)      a duly signed  confirmation of the Secretary of the
                           Franchise Tax Board of the State of California,  USA,
                           in customary form, confirming that AMD

                                       17



                           Inc. is in good standing, has no unpaid tax
                           obligations known to the Franchise Tax Board and is
                           entitled to carry on business in the State of
                           California; the provision of such confirmation shall
                           not, however, be necessary to the extent that such
                           confirmation cannot be provided for the reasons
                           disclosed in the Disclosure Schedule, provided the
                           decisions concerning the tax assessments have been
                           challenged bona fide in appropriate proceedings and
                           provision has been made therefor in accordance with
                           US GAAP.

         The date of the documents referred to above shall not be more than one
         month prior to the date of the initial Drawdown Notice.

         (ii)     Documents relating to AMD Holding

                  (a)      certified copy of the Commercial Registry extract and
                           the articles of incorporation of AMD Holding in the
                           form certified by the County Court. The date of the
                           Commercial Registry extract shall not be more than
                           one month prior to the date of the Drawdown Notice;

                  (b)      confirmation of the Managing Directors
                           (Geschaftsfuhrung) of AMD Holding that the matters
                           set out in the documents referred to in (a) are true
                           and accurate in all respects as they relate to the
                           actual facts;

                  (c)      audited financial statements of AMD Holding,
                           including notes to the statements and a management
                           report, together with an unqualified report by the
                           Auditors for the year ended 31 December 1996.

         (iii)    Documents relating to AMD Saxonia

                  (a)      certified copy of the Commercial Registry extract and
                           the articles of incorporation of AMD Saxonia in the
                           form certified by the County Court; the date of the
                           Commercial Registry extract shall not be more than
                           one month prior to the date of the initial Drawdown
                           Notice;

                  (b)      written confirmation of the Managing Directors
                           (Geschaftsfuhrung) of AMD Saxonia that the documents
                           referred to in (a) are true and accurate in all
                           respects as they relate to the actual facts.

                  (c)      audited financial statements of AMD Saxonia including
                           notes to the statements and a management report,
                           together with an unqualified report by the Auditors
                           for the year ended 31 December 1996.

5.1.9    The Agent has received from AMD Inc. confirmation in the form of
         Schedule 3, dated as of the date of the initial Drawdown Notice,
         stating that there is attached (i) a written resolution of its Board of
         Directors authorizing execution of the Operative Documents and (ii) a
         copy of its by-laws in effect at the date of the initial Drawdown
         Notice and (iii) a list of its agents and officers who have signed the
         Operative Documents and the documents relating thereto as authorized
         signatories.

                                       18



5.1.10   The Agent has received an opinion acceptable to it from a recognized
         reputable first class US financial advisory firm confirming that the
         Operative Documents to which AMD Inc. is a party are fair to AMD Inc.
         from a financial point of view.

5.1.11   The Agent has received the following legal opinions:

         (i)      legal opinion (including an Exhibit A thereto in a form
                  satisfactory to the Agent) of Bronson, Bronson & McKinnon LLP,
                  counsel to AMD Inc., in the form set out in Schedule 57,
                  relating to the Senior Secured Note Indenture dated 1 August
                  1996 and the Credit Agreement dated 19 July 1996 each as
                  referred to in ss. 15.1.13, dated not more than 21 calendar
                  after the date hereof;

         (ii)     legal opinion of O'Melveny & Myers LLP, counsel to the AMD
                  Companies, of even date herewith, in the form set out in
                  Schedule 58, together with confirmation in accordance with
                  Schedule 58 from O'Melveny & Myers LLP that the statements
                  referred to in the legal opinion continue to be true and
                  accurate as at a date not more than ten calendar days prior to
                  the date of the initial Drawdown Notice;

         (iii)    legal opinion of Norr, Stiefenhofer & Lutz, counsel to the AMD
                  Companies including an opinion relating to the completeness of
                  the schedule of required governmental approvals, permits and
                  measures (Schedule 20) as well as relating to the status of
                  such required approvals, permits and measures in accordance
                  with the progress of the Project, in a form updated from that
                  set out in Schedule 59 satisfactory to the Banks dated not
                  more than ten calendar days prior to the date of the initial
                  Drawdown Notice; and

         (iv)     legal opinion of Doser Amereller Noack / Baker & McKenzie,
                  counsel to the Agent and the Banks of even date herewith, in
                  the form set out in Schedule 60, together with confirmation
                  from Doser Amereller Noack/Baker & McKenzie that the
                  statements referred to in the legal opinion continue to be
                  true and accurate as at a date not more than ten calendar days
                  prior to the date of the initial Drawdown Notice;

         (v)      legal opinions of Feddersen Laule Scherzberg & Ohle Hansen
                  Ewerwahn, counsel to the Agent and the Banks of even date
                  herewith in the form set out in Schedule 61, together with
                  confirmation from Feddersen Laule Scherzberg & Ohle Hansen
                  Ewerwahn that the statements referred to in the legal opinion
                  continue to be true and accurate as at a date not more than
                  ten calendar days prior to the date of the initial Drawdown
                  Notice.

5.1.12   The Agent has received a technical report (Technical Report) from the
         Technical Advisor, in form and substance satisfactory to the Agent
         together with an updated confirmation from the Technical Advisor that
         the Technical Report continues to be true and accurate in all material
         respects together with the confirmation in writing from AMD Saxonia in
         the form set out in Schedule 19;

                                       19



5.1.13   The Agent has received confirmations from AMD Saxonia's Insurance
         Brokers in the form of Annexes I and II of Schedule 22 as well as
         confirmation from the Insurance Advisor in form and substance
         satisfactory to the Agent evidencing, in particular, that AMD Saxonia
         has taken out insurances in the scope required pursuant to ss. 17.8 and
         Schedule 22.

5.1.14   AMD Saxonia has registered its stated capital of at least DM
         217,500,000 in the Commercial Register of which an amount of at least
         DM 108,750,000 has been paid up, at the latest on the date of the
         initial Drawdown Notice and that a sum in this amount has been credited
         to a Project Account in accordance with ss. 19.

5.1.15   The Technical Advisor has received the Plans and Specifications in form
         and substance satisfactory to the Technical Advisor and the Agent has
         received confirmation in writing, to that effect.

5.1.16   The conditions to initial drawing referred to in the AMD/Dresdner
         Subsidy Agreement and the SAB/Dresdner Subsidy Agreement relating to
         the payment of grants and subsidies have been satisfied.

5.2      Each of the following conditions must be satisfied on each drawing
         (including the first) of the Facilities:

5.2.1    the Agent and the Paying Agent have received a Drawdown Notice and the
         Agent has received the documents to be submitted simultaneously with
         such notice pursuant to ss. 4.1. Each Drawdown Notice shall in
         particular contain confirmation that the conditions referred to in ss.
         5.2.2 to ss. 5.2.4 below are true and accurate;

5.2.2    the representations and warranties given by each of the AMD Companies
         in each of the Operative Documents are true and accurate in all
         material respects as at the date of the Drawdown Notice and will be
         true and accurate as at the date of drawing, save to the extent that
         their content relates solely to an earlier date;

5.2.3    as at the date of the Drawdown Notice and as at the date of drawing,
         none of the events referred to in ss. 21 which would entitle the Banks
         to terminate this Agreement has occurred;

5.2.4    as at the date of the Drawdown Notice and as at the date of drawing no
         event which has a "Material Adverse Effect" within the meaning of the
         Sponsors' Support Agreement has occurred;

5.2.5    the Agent has received a copy certified by a lawyer of each Material
         Equipment Supply Contract and each Material Service Contract entered
         into by such date, together with the written Consent and Agreements of
         the other contracting party relating to the transfer of the relevant
         contracts in the form set out in Part II of Schedule 40 or in such
         other form to which the Agent shall have consented together with all
         Consents and Agreements required pursuant to the Security Documents set
         out in Schedules 49 and 55 which have not already been obtained;

                                       20



5.2.6    the Agent has received evidence reasonably requested by it that all the
         governmental approvals, permits and measures necessary according to the
         progress of the Project have been granted and, or taken, in accordance
         with Part B of Schedule 20 as well as, at the beginning of each Project
         Phase, a legal opinion acceptable to it from Norr, Stiefenhofer & Lutz
         relating to the completeness and the legal validity of such approvals,
         permits and measures;

5.2.7    the Agent has received at the beginning of each then current Project
         Phase confirmation in the form of the Scheduled Project Phase Technical
         Completion Certificates in accordance with Schedules 9 and 10 stating
         that the relevant preceding Project Phase has been completed;

5.2.8    the Agent has received at the end of each calendar year confirmations
         from AMD Saxonia's Insurance Brokers in the form of Annexes I and II of
         Schedule 22 as well as confirmation of the Insurance Advisor pursuant
         to ss. 5.1.13;

5.2.9    the Agent has received all evidence reasonably requested by it relating
         to compliance with or the enforceability of AMD Saxonia's obligations
         under this Agreement and the Security Documents.

                                      ss. 6
                       Interest, Commitment Fee, Payments

6.1      AMD Saxonia may elect, by a notification in a Drawdown Notice and/or an
         interest rate notice, whether a variable rate, a fixed rate or a
         combination of variable and fixed rates should apply to drawings under
         Facility A.

         The rate of interest applicable to each advance drawn and the Interest
         Period applicable thereto as determined in accordance with ss. 6.2
         shall be, at AMD Saxonia's option:

         (i)      in respect of a fixed rate, the sum of the Reference Rate and
                  the margin,

         (ii)     in respect of a variable rate, the sum of the LIBOR-Rate and
                  the margin.

6.1.1    The Reference Rate is the arithmetic mean (rounded up to the fourth
         decimal place) of the fixed rates per annum for DM interest rate swaps
         (fixed rate as against 6 months LIBOR) in an amount equal to the
         relevant advance for the Interest Period requested by AMD Saxonia, as
         corresponds to the rate quoted by the Reference Banks at 11.00 a.m.
         (London time) as the offered rate on the second Banking Day prior to
         the relevant Interest Period, as determined by the Paying Agent.

         The LIBOR-Rate is the DM interest rate per annum in the London
         Interbank Market which in accordance with "Telerate Screen" page 3750
         (or such other page as may be substituted for page 3750 on that system
         for the purpose of displaying offered rates for DM deposits) is quoted
         as the offered rate at 11.00 a.m. (London time) on the second Banking
         Day prior to the relevant Interest Period for such Interest Period.

                                       21



         To the extent that no interest rate is displayed on the relevant
         "Telerate Screen" page at the relevant time on any day for the
         determination of the interest rate, the rate determined by the Paying
         Agent shall be the arithmetic mean (rounded to the fourth decimal
         place) quoted to the Paying Agent by the Reference Banks as the DM
         interest rate per annum at which the Reference Banks offer to prime
         banks in the London Interbank Market on the relevant date at 11.00 a.m.
         London time for deposits for the relevant period and in an amount
         comparable to the relevant advance.

         If any Reference Bank does not notify such a rate to the Paying Agent
         for any relevant period, the LIBOR-Rate and/or the Reference Rate as
         applicable shall be determined on the basis of the rates notified by
         the other Reference Banks.

6.1.2    The margin applicable to Facility A prior to 31 December 2001 shall be
         one percent (1.00%) per annum. After 31 December 2001, the margin shall
         be calculated by reference to:

                  (a)      the rating of the public long-term senior unsecured
                           debt securities of AMD Inc. by Moody's Investor
                           Services, Inc.(or any successor or other undertaking
                           which has assumed the relevant functions of Moody's
                           Investor Service, Inc. which is a rating agency of
                           international repute) in effect at the relevant time;
                           and

                  (b)      the ratio (expressed as a percentage of utilization)
                           of outstanding advances under Facility A to DM
                           1,500,000,000,-,

         in each case, corresponding to the interest rate set out in the right
         hand column of the following table:



         ========================================== ===================================== ===========================
                          Rating                           Utilization percentage                   Margin
         ========================================== ===================================== ===========================
                                                                                    
         less than "investment grade (Baa3)"        70% or more                           1.00% per annum;
         or no rating
         ------------------------------------------ ------------------------------------- ---------------------------
         less than "investment grade (Baa3)"        at least 50% but less than 70%        0.90% per annum;
         or no rating
         ------------------------------------------ ------------------------------------- ---------------------------
         less than "investment grade (Baa3)"        less than 50%                         0.75% per annum;
         or no rating
         ------------------------------------------ ------------------------------------- ---------------------------
         "investment grade (Baa3)"                  70% or more                           0.75% per annum;
         or better
         ------------------------------------------ ------------------------------------- ---------------------------
         "investment grade (Baa3)"                  at least 50% but less than 70%        0.70% per annum; and
         or better
         ------------------------------------------ ------------------------------------- ---------------------------
         "investment grade (Baa3)"                  less than 50%                         0.55% per annum.
         or better
         ========================================== ===================================== ===========================


                                       22



         Adjustments to the margin in respect of each advance shall be made at
         the beginning of the next Interest Period and/or at the next interest
         payment date as set out in ss. 6.6, as the case may be.

         AMD Saxonia shall ensure that the Interest Periods elected by it always
         correspond with the repayment schedule in ss. 7.2 of this Agreement. To
         the extent that any advance must be prepaid prior to the Interest
         Period agreed therefor in order to comply with such repayment schedule,
         the provisions of ss. 7.5 shall apply accordingly.

6.2      In respect of a variable interest rate, the Interest Periods shall be
         1, 3, 6 or 12 months (to the extent available). The Interest Periods in
         respect of fixed interest rates shall be of a duration of integral
         multiples of one year or of such duration as AMD Saxonia and the Agent
         may agree in order to match the dates on which repayment instalments
         are made in accordance with ss. 7.2 but shall not in any event exceed
         five nor be less than two years.

         Upon the Agent's request, AMD Saxonia will consolidate individual
         outstanding advances so that not more than ten separate advances are
         outstanding at any one time.

6.3      AMD Saxonia will notify the Agent, with a copy to the Paying Agent, in
         an irrevocable Drawdown Notice and/or an interest rate notice to be
         received at the latest by the fifth Banking Day prior to an Interest
         Period of the relevant interest rate (variable or fixed rate), the
         amount for which the specified interest rate shall apply and the
         duration of the relevant Interest Period. If the Agent has not received
         in the time specified therefor an interest rate notice in the form set
         out in Schedule 4 for the next Interest Period, the relevant advance
         shall be for an Interest Period of the same duration as the previous
         Interest Period and bear interest on the same interest rate basis
         applicable to such Period.

6.4      The first Interest Period for each advance will commence on the date of
         drawing. Each succeeding Interest Period will commence on the
         expiration of the immediately preceding Interest Period. If the last
         day of an Interest Period does not fall on a Banking Day, the Interest
         Period shall be deemed to end on the next following Banking Day or if
         the Interest Period relates to an advance bearing interest at a
         variable rate and the next following Banking Day would otherwise fall
         in the next calendar month, such Interest Period shall be deemed to end
         on the immediately preceding Banking Day. If an Interest Period for any
         advance would otherwise extend beyond a due date for payment pursuant
         to ss. 7.2 of this Agreement, the relevant Interest Period shall be
         deemed to end on the relevant due date.

6.5      Interest in respect of the variable interest rate shall be calculated
         on the basis of the actual number of days elapsed and a 360 day year.
         Interest in respect of the fixed interest rate shall be calculated on
         the basis of a 30 day month and a 360 day year.

6.6      Interest shall be paid on the last day of an interest period. In the
         case of an Interest Period for a variable rate advance of more than 3
         months interest shall be due and payable at the end of every 3 months.
         In the case of a fixed rate advance, interest shall be

                                       23



         paid on the last day of each calendar quarter or, if such day is not a
         Banking Day, on the next succeeding Banking Day.

6.7      AMD Saxonia shall be in default (Verzug), without any requirement for
         notice, if it has failed to make payments which are due hereunder on
         the relevant due date or if it does not make such payments in full. AMD
         Saxonia shall pay default interest on the outstanding amount of the
         overdue payment at the rate equal to 4 percentage points per annum
         above the applicable discount rate of the German Bundesbank, or the
         equivalent rate following introduction of the single currency under
         European Monetary Union, from the due date until receipt by the Paying
         Agent of the outstanding amounts. Should there be no such rate
         following introduction of the single currency, the Banks shall
         determine the applicable rate in accordance with ss. 315 BGB. If AMD
         Saxonia is in default of payment of interest, AMD Saxonia shall pay to
         the Banks liquidated damages. The amount of such liquidated damages
         shall correspond to a rate of interest of 4 percentage points above the
         applicable discount rate of the German Bundesbank (or the equivalent
         rate following introduction of the single currency under European
         Monetary Union) from the due date until receipt by the Paying Agent of
         the overdue interest amounts. Should there be no such rate following
         introduction of the single currency, the Banks shall determine the
         applicable rate in accordance with ss. 315 BGB.

6.8      AMD Saxonia agrees to pay to the Paying Agent for the account of each
         Bank as from the date of execution of this Agreement until the end of
         the availability period pursuant to ss. 4.2 a commitment fee at the
         rate of 0,2% per annum on such Bank's commitment of the unused portion
         of the Facilities calculated on the basis of the actual days elapsed
         and on the basis of a 360 day year. The commitment fee shall be
         calculated on a quarterly basis and shall be payable at the end of each
         calendar quarter for that quarter.

6.9      All payments to be made by AMD Saxonia to the Banks pursuant to the
         terms of this Loan Agreement shall at all times be made to the Paying
         Agent's account no. *** with Dresdner Bank in Frankfurt or such other
         account as may be specified by the Paying Agent on the relevant due
         date. The Security Agent is hereby also authorised to debit the
         relevant amounts due from AMD Saxonia's account no. *** with the
         Security Agent in Dresden on or after the due date and to pay the same
         to the Agent for distribution to the individual Banks. Payments made
         otherwise than in accordance with this provision shall not constitute
         good discharge in favour of AMD Saxonia.

6.10     AMD Saxonia shall not be entitled to assert any rights of set off or
         retention against the claims of the Banks for payment hereunder.

                                      ss. 7
                               Term and Repayment

7.1      The Facilities shall be for a term expiring on 31 December 2005.

7.2      The Facilities shall be amortized, commencing on 30 June 2001,

- --------------------
*** Confidential information omitted and filed separately with the Securities
    and Exchange Commission.

                                       24



         in semi-annual repayments in the percentages set out below on the last
         Banking Day of the relevant six month period:



         =========================================== ===============================================================
                                                              Percentage of the aggregate principal amount
                                                      of the Facilities outstanding at the end of the availability
                        Instalments                                     period pursuant to ss. 4.2
         =========================================== ===============================================================
                                                  
         first and second instalment                                         6.50% each
         ------------------------------------------- ---------------------------------------------------------------
         third and fourth instalment                                        13.50% each
         ------------------------------------------- ---------------------------------------------------------------
         fifth and sixth instalment                                         14.25% each
         ------------------------------------------- ---------------------------------------------------------------
         seventh and eighth instalment                                      10.50% each
         ------------------------------------------- ---------------------------------------------------------------
         ninth and tenth instalment                                          5.25% each
         =========================================== ===============================================================


         Each scheduled repayment of the Facilities shall be made, together with
         all interest accrued at the due date for repayment and with all other
         amounts due under this Agreement at such date.

7.3      AMD Saxonia is entitled to prepay the outstanding amount of the
         Facilities, in whole or in part, but not in an amount of less than DM
         10,000,000 or, if higher, an integral multiple of DM 5,000,000 or the
         total amount outstanding provided that it shall have notified the
         Paying Agent (with a copy to the Agent) at least five Banking Days in
         advance by notice in writing, substantially in the form of Schedule 5.
         Each repayment shall include accrued interest up to the date of
         repayment.

7.4      At the latest on 15 August 2002, AMD Saxonia shall make a prepayment of
         the outstanding Facilities in an amount equal to the excess (if any)
         of:

7.4.1    all drawdowns under the Facilities made after Completion,

         over

7.4.2    Capital Expenditure incurred between 1 January 2001 and 1 July 2002, as
         set out in the Statement as to the Use and Sources of Funds submitted
         pursuant to ss. 16.2.6 (ii) for such period, signed by the Auditor.

7.5      Prepayments shall be applied to payments pursuant to ss. 7.2 in inverse
         order of maturity. In the event that the Banks incur a loss arising
         from a repayment (save for a repayment at the end of an Interest
         Period) by virtue of the fact that the reinvestment of any advances
         repaid by AMD Saxonia is only possible at interest rates lower than
         those agreed with AMD Saxonia, AMD Saxonia shall indemnify the Banks in
         respect of reinvestment losses so incurred as a result of prepayment.
         In such circumstances, the Banks shall be entitled to make a claim for
         the reinvestment loss which is equal to the difference between the rate
         of interest which would have been payable by AMD Saxonia for the
         relevant remaining term of the Interest Period on the basis of the
         applicable rates and the rate available to the Banks for such period as
         the reinvestment rate. For this purpose, the reinvestment rate for the
         remaining term and/or the remaining term of the Interest Period

                                       25



       is capital market rate corresponding to the offered rate for German
       Pfandbriefe/Kommunalobligationen (Inhaberschuldverschreibungen) of an
       equivalent maturity in the interbank market, determined in accordance
       with ss. 6.1. The difference in interest rates shall be discounted to net
       present value at a discount rate equivalent to the reinvestment rate. The
       Banks shall be entitled to make a claim for any loss incurred by them
       which is higher. AMD Saxonia shall have the right to prove that damages
       have not been incurred or not in the amount claimed. All notices in
       relation to a prepayment shall be irrevocable.

                                      ss. 8

                                    Security

8.1    The Facilities are secured by the 65/35 Guaranty in the form known to the
       Banks and AMD Saxonia, as set out in Schedule 24 including in particular
       deeds of guaranty in the form set out in the specimen annexed thereto. A
       copy of the Guaranty Decision is also set out in Schedule 24 and the
       terms of such Decision constitute a material term of this Agreement. All
       terms and conditions of the Guaranty Decision to be incorporated herein
       are hereby agreed by the parties notwithstanding that the same are not
       expressly set out in this Agreement; this shall apply in particular to
       the obligation to agree to amendments to this Agreement only with the
       consent of the Guarantors. AMD Saxonia undertakes to observe and comply
       with all relevant conditions of the Guaranty Decision directly applicable
       to it and to do all things to enable AMD Inc. to observe and comply with
       all obligations incumbent on it in connection with the Guaranty Decision.
       The Guarantors are entitled to appoint authorized representatives for the
       purpose of administering the 65/35 Guaranty. In addition, AMD Saxonia
       shall grant, or procure that there is granted, in favor of the Banks and
       the Security Agent the following security as security for all claims of
       the Banks as well as any potential claims of the Guarantors arising under
       or in connection with this Agreement:

8.1.1  a joint and several guaranty by the Sponsors in an amount of up to the
       greater of (i) thirty five percent (35%) of all amounts outstanding under
       this Agreement, and (ii) DM 217,500,000, in each case plus interest
       thereon and costs and expenses, but subject to a maximum amount of DM
       600,000,000, as set out in the Sponsors' Guaranty in the form of Schedule
       32, as amended;

8.1.2  a subordination agreement between AMD Saxonia, the Sponsors, the Agent
       and the Security Agent, in the form set out in Schedule 30;

8.1.3  a guaranty by AMD Inc. of obligations of AMD Holding under certain
       Operative Documents, in the form set out in Schedule 27;

8.1.4  a pledge of all shares in AMD Holding held by AMD Inc. in the form set as
       out in Schedule 41;

8.1.5  a subordination agreement between AMD Holding, AMD Inc., the Agent and
       the Security Agent, in the form set out in Schedule 42.

                                       26



8.1.6  a first priority land charge over real property registered in the Land
       Registry of the Dresden County Court, Dresden von Wilschdorf parcels
       numbers Folio 851 parcels nos. 150/2, 121/2, 122, 123, 124, 125/2, 126,
       127, 128/2, 129/3, 130, 131, 132, 133/1, 134, 135, 136, 137, 138, 139,
       140, 141, 142, 143, 143a, 144, 145, 146, 147, 148, 149, 151/2, 152, 153,
       154/2, 155, 156, 157, 158, 159, 160/1, 160/2, 161, 162, 694/1 of AMD
       Saxonia in respect of an amount of DM 1,650,000,000 together with
       interest in an amount of 15% per annum together with a lump sum payment
       in an amount of 5% of the total charge amount as an immediately
       enforceable charge without prior charges in Section III of the Register
       in favor of the Security Agent together with a personal acknowledgement
       of enforceability by AMD Saxonia to be granted in the form set out in
       Schedule 43;

8.1.7  a security assignment of the current assets of AMD Saxonia (raw
       materials, supplemental and operational materials, finished and
       unfinished products as well as trading products), in the form set out in
       Schedule 44;

8.1.8  a security assignment of fixed assets of AMD Saxonia, in the form set out
       in Schedule 45;

8.1.9  a security assignment of insurance claims of AMD Saxonia, in the form set
       out in Schedule 46;

8.1.10 a global assignment of all receivables of AMD Saxonia not otherwise
       assigned from the supply of equipment and other services and from other
       claims against debtors other than the Sponsors, in the form set out in
       Schedule 47;

8.1.11 a pledge of all amounts standing to the credit of AMD Saxonia in the
       Project Accounts in the form set out in Schedule 48;

8.1.12 an assignment of AMD Saxonia's rights under the Design/Build Agreement in
       the form set out in Schedule 39, the Equipment Supply Contracts, the
       Service Contracts and other contracts not governed by the laws of the
       United States of America or any state thereof together with an offer to
       transfer such contracts as required by Schedule 49 and with Consents and
       Agreements in the form of Annex 3 to Schedule 49 as therein required. AMD
       Saxonia is hereby authorized by the Security Agent to enforce on its
       behalf rights in its name under the agreements referred to above as
       against the relevant obligor for as long as no circumstances exist which
       entitle the Banks to terminate this Agreement; AMD Saxonia hereby accepts
       such authorization;

8.1.13 an assignment of claims and contractual rights of AMD Saxonia under the
       AMD Saxonia Wafer Purchase Agreement, the Equipment Supply Contracts, the
       Service Contracts and rights under other contracts governed by the laws
       of the United States of America or any state thereof, in the form set out
       in Schedule 50;

8.1.14 a pledge of all shares in AMD Saxonia held by AMD Holding, in the form
       set out in Schedule 51;

                                       27



8.1.15 a security assignment of current assets of AMD Holding (raw materials,
       supplemental and operational materials, finished and unfinished products
       as well as trading products), in the form set out in Schedule 52;

8.1.16 a global assignment of all receivables of AMD Holding not otherwise
       assigned from the supply of equipment and other services and of other
       claims against all debtors, with the exception of AMD Inc., in the form
       set out in Schedule 53;

8.1.17 a pledge of all amounts standing to the credit of AMD Holding in bank
       accounts, in the form set out in Schedule 54;

8.1.18 an assignment of AMD Holding's rights under contracts not governed by
       laws of the United States of America or any state thereof and an offer to
       transfer such contracts, pursuant to the form set out in Schedule 55
       together with Consents and Agreements in the form set out in Annex 3 to
       Schedule 55 as therein required; AMD Holding will be authorized by the
       Security Agent to enforce on its behalf rights in its name under the
       agreements referred to above as against the relevant obligor for so long
       as no circumstances exist which entitle the Banks to terminate this
       Agreement;

8.1.19 an assignment of claims and contractual rights of AMD Holding under the
       AMD Holding Wafer Purchase Agreement and other contracts governed by the
       laws of the United States of America or any state thereof, in the form
       set out in Schedule 56;

8.1.20 the AMD Inc. Pledge Agreement over Membership Interests in AMD Saxony LLC
       dated 3 June 2002 between AMD Inc. and the Security Agent;

8.1.21 the AMD Saxony LLC Security Agreement dated 3 June 2002 between AMD
       Saxony LLC and the Security Agent;

8.1.22 the AMD Saxony LLC KG Partnership Interest Pledge Agreement in AMD
       Saxonia dated 3 June 2002 between AMD Saxony LLC and the Security Agent;

8.1.23 the AMD Holding Share Pledge Agreement over GmbH shares in AMD Admin
       dated 3 June 2002 between AMD Holding and the Security Agent;

8.1.24 the AMD Admin Global Assignment Agreement dated 3 June 2002 between AMD
       Admin and the Security Agent;

8.1.25 the AMD Admin Pledge of Bank Accounts dated 3 June 2002 between AMD Admin
       and the Security Agent;

8.1.26 the AMD Admin KG Partnership Interest Pledge Agreement in AMD Saxonia
       dated 3 June 2002 between AMD Admin and the Security Agent;

8.1.27 the AMD Holding KG Partnership Interest Pledge Agreement in AMD Saxonia
       dated 3 June 2002 between AMD Holding and the Security Agent; and

                                       28



8.1.28 the Clarification and Security Agreement dated 3 June 2002 between the
       AMD Companies, the Security Agent and the Agent.

8.2    AMD Saxonia undertakes that, in the event of any material deterioration
       of the security as a whole, in particular as a result of reduction in
       value and/or loss, it will on the request of the Agent grant additional
       security or repay the Facilities accordingly. AMD Saxonia undertakes to
       charge real property which is not presently charged or which is acquired
       in the future if the same is or intended to be used for operational
       purposes.

8.3    If AMD Saxonia is of the opinion that the realizable value of the
       security as a whole (with the exception of the 65/35 Guaranty) exceeds at
       any time by a material amount the total outstanding claims of the Banks
       under this Agreement, otherwise than temporarily, AMD Saxonia may by
       notice to the Security Agent, including supporting material, require the
       release of security. The Security Agent will pass a copy of such notice
       to the Guarantors for their comment.

       Following receipt of the Guarantors' comments, the Security Agent and the
       Banks will release security to the extent a material
       over-collateralization has been adequately demonstrated.

       The Security Agent shall be obliged to agree to a release if and to the
       extent that the realizable value as determined in accordance with the
       individual Security Documents of all Security provided by AMD Saxonia
       exceeds 120% of the secured claims of the Banks other than temporarily.
       The choice of the securities released shall be at the discretion of the
       Security Agent and of the Banks, as the case may be.

8.4    In the event that the Banks are entitled to terminate the Facilities
       pursuant to ss. 21 of this Agreement, AMD Saxonia hereby authorizes the
       Agent, on behalf of the Banks, to satisfy on its behalf all obligations
       of, and to discharge all claims against it (including those arising under
       extended retention of title clauses), at the expense of AMD Saxonia. AMD
       Saxonia waives its rights pursuant to ss. 267 II BGB and undertakes to
       reimburse the Agent promptly after request by the Agent all reasonable
       costs and expenses which the Agent may have incurred in connection with
       the exercise of its rights to satisfy obligations and discharge claims as
       aforesaid.

                                      ss. 9
                                   Illegality

If it becomes illegal or unlawful pursuant to domestic or foreign legislation or
it becomes contrary to any requirement of any domestic or foreign authority or
public body for any Bank to comply with its outstanding obligations - in whole
or in part - under this Agreement such Bank may immediately after it has become
aware thereof inform AMD Saxonia through the Agent. After receipt of such
notification, the Facilities made available by the relevant Bank affected by the
illegality or unlawfulness shall be cancelled without notice or on such
reasonable notice as may be determined by the relevant Bank and specified in the
notification referred to, as the case may be. In such case, AMD Saxonia shall
repay to the Paying Agent for distribution to the relevant Bank all outstanding
amounts under the affected Facilities at the date such notice

                                       29



becomes effective, together with accrued interest and all other amounts due at
the date of such notice.

                                     ss. 10
              Market Disruption; Alternative Method of Calculation

10.1   The Paying Agent shall immediately notify AMD Saxonia and the Banks if
       any of the following events occur in relation to any interest period:

       (i)    the Paying Agent, after consultation with the Reference Banks,
              determines that due to circumstances affecting the London
              interbank market, the LIBOR rate or the reference rate cannot be
              adequately and reasonably determined; or

       (ii)   in the case of a LIBOR rate, no interest rate for the relevant
              interest period appears on the Telerate Monitor and less than two
              (2) Reference Banks provide the Paying Agent with a LIBOR rate or
              in the case of the reference rate, less than two Reference Banks
              provide the Paying Agent with a reference rate; or

       (iii)  a majority of Banks, as determined pursuant to ss. 22.5, inform
              the Paying Agent (with a copy to the Agent) that in respect of the
              relevant interest period no DM funds in the required amount are
              available in the London interbank market or that the average of
              the LIBOR-rates appearing on the Telerate Monitor do not
              adequately reflect the cost to such Banks of making or maintaining
              their respective participations in the relevant advance for such
              interest period.

       Following receipt of such notification no further advances may be made
       until an alternative method of calculation pursuant to ss. 10.2 is agreed
       upon or such notice is revoked by further notification from the Paying
       Agent to AMD Saxonia and the Banks.

10.2   As soon as notification pursuant to ss. 10.1 has been made, AMD Saxonia
       and the Paying Agent, in coordination with the Banks, will negotiate in
       good faith for a maximum period of thirty days with a view to setting an
       alternative method of refinancing the affected advances as well as the
       applicable interest rate, the interest period and the payment dates. To
       the extent that instead of a LIBOR rate, a reference rate can be
       determined or instead of a reference rate, a LIBOR rate can be
       determined, AMD Saxonia shall be entitled to require that the rate which
       is available shall apply to the relevant advance. If agreement as to the
       alternative interest rate is reached between the Banks and AMD, the
       alternative calculation method agreed shall apply for all relevant
       advances. If no agreement in respect of an alternative method of
       calculation is achieved within thirty days and agreed upon in writing or
       if AMD Saxonia does not require an alternative available Reference Rate
       or LIBOR-Rate, the following shall apply:

       (i)    to the extent that the Facilities have not been drawn, no drawing
              will be permitted. AMD Saxonia shall then be obliged to pay
              immediately all amounts due to the Paying Agent for distribution
              to the Banks pursuant to the terms of this Agreement;

                                       30



       (ii)   to the extent that the Facilities have already been drawn, AMD
              Saxonia and the Agent (in consultation with the Paying Agent) may
              determine a repayment date for the entire outstanding amount of
              the Facilities affected of not less than thirty days. Repayment
              shall be effected on such day together with interest in an amount
              equivalent to the costs of the Banks of making or maintaining
              their respective participations in the relevant advance for such
              interest period together with the margin to the Paying Agent for
              distribution to the Banks. In the event that such costs of the
              Banks cannot be determined, the applicable rate shall be
              determined in accordance with ss. 315 BGB.

                                     ss. 11
                                 Increased Costs

11.1   If a Bank or its Lending Office determines that the introduction of or a
       change of any law applicable to it or change in interpretation of any
       such law or the application or compliance with any regulation of any
       public body results or will result:

       (i)    in the affected Bank being obliged to pay any tax or other payment
              relating to any advance made by it or to any payment to be made by
              AMD Saxonia to it, or

       (ii)   the affected Bank being subject to any other measure which leads
              to an increase in the costs of that Bank in funding advances or
              that the amount or the effective return in relation to any payment
              which the affected Bank receives pursuant to this Agreement is
              reduced, or

       (iii)  the affected Bank being subject to additional costs which arise
              from its commitment under the Facility,

       such Bank shall be entitled to inform AMD Saxonia through the Agent. AMD
       Saxonia shall then be obliged on request and irrespective of whether
       advances made are repaid to the affected Bank to pay such amount to the
       Paying Agent for the account of the affected Bank as is demonstrated to
       be necessary to compensate the affected Bank for the relevant increase in
       costs or reduction of payment. The foregoing shall apply only to the
       extent that the affected Bank has informed AMD Saxonia, via the Agent, of
       the relevant circumstance in respect of paragraphs (i) to (iii).

11.2   An increase in costs or reduction of payment referred to in ss. 11.1 does
       not include:

       (i)    any tax on overall net income of any Bank or a branch thereof;

       (ii)   any tax required to be deducted or withheld from any amount
              payable by AMD Saxonia which AMD Saxonia has paid in accordance
              with ss. 13;

       (iii)  any amount relating to any reserve amount, special deposits,
              equity, cost ratio, liquidity or capital adequacy requirement or
              any other form of banking or monetary control resulting from any
              law or regulation in effect at the date of this Agreement.

                                       31



11.3   For as long as the circumstances referred to in 11.1 above continue, AMD
       Saxonia shall be entitled by written notice to the Paying Agent, with a
       copy to the Agent, to repay all outstanding advances made by the affected
       Bank on thirty days notice expiring at the end of an interest period and
       to cancel the Facilities only as they relate to the affected Bank.

                                     ss. 12
                                    Indemnity

12.1   Without prejudice in particular to the provisions of ss. 6.7, ss. 7.5,
       ss. 10 and ss. 11, AMD Saxonia shall be obliged to hold harmless from and
       to indemnify each Bank and the Paying Agent on demand in respect of all
       losses, obligations, damage, costs and expenses (including loss of
       profit) under or arising out of this Agreement which are suffered by a
       Bank or the Paying Agent as result of:

       (i)    the occurrence of circumstances which entitle the Banks to
              terminate this Agreement or breach by AMD Saxonia of its
              obligations under this Agreement;

       (ii)   the failure to draw down funds under the Facilities following a
              Drawdown Notice;

       (iii)  any amounts prepaid otherwise than in accordance with the terms of
              this Agreement (in particular also pursuant to ss. 10 and ss. 11).

12.2   The obligation to hold harmless and indemnify includes also all costs and
       expenses which a Bank incurs as result of the redeployment of funds which
       are obtained for the purposes of refinancing its commitment under the
       Facilities as well as all interest, fees and costs which arise as a
       result of the funding of the amounts not drawn.

12.3   The Paying Agent will maintain books of account in accordance with
       customary banking practice which will at all relevant times record the
       amounts owed by AMD Saxonia pursuant to this Agreement. In the event of
       disputes or other questions in connection with this Agreement, the
       contents of the Paying Agent's books of account as they relate to the
       obligations of AMD Saxonia pursuant to this Agreement and the amount
       thereof shall be conclusive, save in the case of manifest error. AMD
       Saxonia's ability to prove any error in the contents of such books of
       account shall remain unaffected.

                                     ss. 13
                          No Deductions or Withholdings

13.1   All sums payable by AMD Saxonia under this Agreement shall be paid in
       full without set off or withholding in respect of tax or other
       deductions. The right to set off or the enforcement of any rights of
       retention or other claims is hereby excluded. To the extent that AMD
       Saxonia or a third party is obliged by law to make deductions or
       withholdings or to retain money for tax or other reasons, AMD Saxonia
       shall be obliged to make a payment of the difference together with the
       relevant amount in such additional amount as will ensure that the
       relevant Bank or the Paying Agent (as applicable) receives the full
       amount which would otherwise have been received by it if the relevant
       deduction or withholding had not been made. AMD Saxonia shall be obliged
       to furnish the Paying Agent, with a copy to the Agent, immediately with
       copies of all the relevant documents

                                       32



       confirming that the amount deducted or withheld has been paid to the
       relevant tax or other authority in the full amount.

13.2   If AMD Saxonia becomes aware that deductions or withholdings within the
       meaning of 13.1 are required, AMD Saxonia shall notify the Paying Agent,
       with a copy to the Agent, immediately giving details and information
       relating to the relevant regulations.

13.3   If any Bank receives the benefit of a tax credit or a relief or remission
       of tax resulting from the receipt of any additional amount under ss. 13.1
       such Bank shall promptly reimburse to AMD Saxonia such part of that
       benefit as will leave such Bank after such payment in no more and no less
       favourable a position than would have applied if no such benefit or
       relief had been received. The relevant Bank shall be obliged to take all
       reasonable steps to claim such credit, relief or remission from or
       against its tax liabilities even if this results in an obligation to make
       a reimbursement to AMD Saxonia. The Banks shall not, however, be obliged
       to permit AMD Saxonia to inspect its books in connection with the
       obligation referred to above nor to take any particular steps in relation
       to their tax affairs.

13.4   No additional amount will be payable to a Bank under ss. 13.1 to the
       extent that such additional amount becomes payable as a result only of a
       change in the Lending Office of the relevant Bank, unless (i) such change
       is requested by AMD Saxonia, or (ii) under the relevant laws,
       regulations, treaties or rules in effect at the time of the change in
       Lending Office, such additional amount would not have been payable.

13.5   If AMD Saxonia is obliged to pay an additional amount under ss. 13.1, AMD
       Saxonia may prepay in whole (but not in part) (without prejudice to ss.
       12.1) the amount made available to it under this Agreement by the
       affected Bank, on AMD Saxonia giving not less than five Banking Days'
       prior written notice to the Paying Agent (with a copy to the Agent) and
       the affected Bank, provided that such notice is given within thirty (30)
       days of AMD Saxonia becoming aware that it would be obliged to pay such
       amount; prepayments under this ss. 13.5 shall not be permitted after the
       expiry of such period. The liability of such Bank to make any further
       advances available to AMD Saxonia shall be cancelled on the giving of
       such notice.

                                     ss. 14
                                Continuity Clause

European Economic and Monetary Union anticipates the introduction of a single
currency and the substitution of the national currencies of Member States
participating in such Monetary Union. On the date on which the Deutsche Mark is
replaced by the single currency, conversion into such currency shall take
effect. The denomination of the original currency shall be retained for so long
as this is legally permissible. Conversions shall be based on the officially
fixed rate of conversion. Neither the introduction of the single currency nor
the substitution of the national currencies of the Member States participating
in such Monetary Union nor the fixing of the official rate of conversion nor any
economic consequences that arise from any of the aforementioned events or in
connection with such Monetary Union shall give rise to any right to terminate
prematurely, contest, cancel, rescind, modify, or renegotiate this Agreement or
any of

                                       33



its provisions or to raise any other objections and/or exceptions or to assert
any claims for compensation. This Agreement shall continue in full force and
effect in accordance with its terms; in particular, interest rates which have
been set for an interest period shall remain unchanged for such interest period,
subject to any mandatory provisions.

                                     ss. 15

                         Representations and Warranties

15.1     AMD Saxonia represents and warrants to the Banks as follows:

15.1.1   AMD Saxonia is a duly organised and existing Limited Partnership; each
         of AMD Holding and AMD Admin is a duly organised and existing limited
         liability company (Gesellschaft mit beschankter Haftung) under the laws
         of the Federal Republic of Germany. AMD Saxony LLC is a duly organised
         and existing limited liability company under the laws of the State of
         Delaware, United States of America;

15.1.2   each AMD Company has taken all necessary steps and obtained all
         necessary consents to enter into legally binding obligations pursuant
         to the Operative Documents and the Security Documents and to exercise
         its respective rights thereunder;

15.1.3   the certified Commercial Registry extracts furnished to the Agent and
         the notarially certified articles of association of AMD Saxonia, AMD
         Admin and AMD Holding, and a copy of the Certificate of Formation of
         AMD Saxony LLC, certified by the Secretary of State of the State of
         Delaware, the Conversion Documents and the other documents to be
         furnished pursuant to ss. 16.5 reflect in all respects the actual
         position existing on the date furnished to the Agent;

15.1.4   the execution of the Operative Documents by each of the AMD Companies
         and the compliance by each of them of their obligations thereunder and
         the exercise by each of them of their rights thereunder:

         (i)      do not violate any provision of applicable  law, any judgment
                  or any  requirements  or any approvals of any authority or the
                  like or contractual obligations applicable to them or any
                  other obligations;

         (ii)     will not result in the termination or acceleration of any of
                  their other respective obligations;

         (iii)    will not result in an obligation of any of them to create or
                  grant any security in favor of any third party, save as
                  contemplated in the Security Documents or in this Agreement.

15.1.5   All Operative Documents entered into by the AMD Companies constitute
         the legally valid and binding obligations of AMD Saxonia, AMD Holding,
         AMD Saxony LLC, AMD Admin, and/or AMD Inc., respectively, enforceable
         in accordance with their terms, subject, however, to the Opinion
         Reservations. For this purpose, "Opinion Reservations" means
         limitations on the enforceability of legal documents which are subject
         to German law or the law of the United States of America or one of its
         states to the extent that in

                                       34



         respect of these circumstances qualifications are expressly made in the
         legal opinions which were furnished to the Agent pursuant to ss. 5.1.11
         and which were approved by the Agent or in the legal opinions delivered
         to and accepted by the Agent under and pursuant to one of the Amendment
         Agreements to the Loan Agreement dated 6 February, 1998, 29 June, 1999,
         20 February, 2001 and 3 June 2002. The granting of the security
         pursuant to ss. 8.1.1 to ss. 8.1.28 (inclusive) will be effective to
         grant to the Security Agent and / or the Banks a first priority
         security interest in each case, subject to retentions of title
         permitted in accordance with this Agreement. At the date of entering
         into this Agreement, AMD Saxonia does not own any real property, save
         for the real property referred to in ss. 8.1.6;

15.1.6   The audited consolidated financial statements of AMD Holding and the
         audited financial statements of AMD Saxonia each as at 31 December 1996
         which have been furnished to the Agent, together with the relevant cash
         flow statements as at such date were, and the financial statements to
         be delivered pursuant to ss. 16.2.1 will be, prepared in accordance
         with generally accepted accounting principles consistently applied; in
         accordance with these principles they fairly represent, and, in the
         case of the financial statements to be delivered pursuant to ss.
         16.2.1, will fairly represent, the consolidated financial position of
         AMD Holding and AMD Saxonia respectively without qualification and make
         provision for all material indebtedness and other liabilities, actual
         or contingent, of AMD Holding and AMD Saxonia save to the extent set
         out in Schedule 15. Since their respective dates of organisation, there
         has been no material adverse change in the business or financial
         position of AMD Saxonia, AMD Admin, (prior to a Substitution) AMD
         Saxony LLC and AMD Holding;

15.1.7   The audited financial statements of AMD Saxonia to be delivered in
         accordance with ss. 5.1.8 (iii) and ss. 16.2.2 were prepared in
         accordance with generally accepted accounting principles consistently
         applied. They are in accordance with those principles, true and
         accurate in all material respects and fairly represent the financial
         position of AMD Saxonia without qualification; in particular, provision
         has been made for all material indebtedness and all other liabilities,
         actual or contingent. Since the date of the latest audited accounts
         there has been no material adverse change in the business or financial
         position of AMD Saxonia;

15.1.8   There are no actions, suits, proceedings, claims or disputes or
         administrative proceedings pending or threatened against AMD Saxonia,
         AMD Saxony LLC (prior to a Substitution), AMD Admin or AMD Holding or
         the assets or other sources of income of AMD Saxonia, AMD Saxony LLC
         (prior to a Substitution), AMD Admin or AMD Holding which if an
         unfavourable outcome was reasonably probable, could reasonably be
         expected to have a material adverse effect on the financial position of
         AMD Saxonia, AMD Saxony LLC (prior to a Substitution), AMD Admin or AMD
         Holding;

15.1.9   To the best of its knowledge and belief, no Event of Default in
         relation to any of the Operative Documents exists on the Conversion
         Effective Date;

                                       35



15.1.10   None of AMD Holding, AMD Saxony LLC (prior to a Substitution), AMD
          Admin or AMD Saxonia is insolvent or incapable of paying its debts as
          they fall due; none is in liquidation and no steps have been commenced
          for the dissolution of any of them;

15.1.11   100% of the capital partnership interests (Kapitalanteile) in AMD
          Saxonia are held by AMD Admin (as to Euro 250), AMD Holding (as to at
          least 99.99% (rounded to two decimal points) and AMD Saxony LLC (prior
          to a Substitution) (as to Euro 250 prior to its re-transfer of a
          fractional interest pursuant to the Conversion Documents, and as to 0%
          following such re-transfer), each of which holds no investment in any
          other person (except that AMD Admin is a wholly-owned subsidiary of
          AMD Holding). AMD Holding and AMD Saxony LLC are, in turn,
          wholly-owned subsidiaries of AMD Inc.;

15.1.12   The ordinary share capital of AMD Holding has been paid up in full and
          that of AMD Saxonia (prior to the Conversion Effective Date) has been
          paid up in accordance with the provisions of the Sponsors' Support
          Agreement; there have been no repayments of capital. AMD Saxonia has
          no equity participations in other companies;

15.1.13   AMD Holding, AMD Saxony LLC, AMD Admin or AMD Saxonia are"Unrestricted
          Subsidiaries" and not "Restricted Subsidiaries" within the meaning of
          the Loan and Security Agreement of July 13, 1999, as amended, between,
          inter alia, AMD Inc. and the Bank of America National Trust and
          Savings Association, as agent;

15.1.14   The assets and rights of AMD Saxonia, AMD Saxony LLC, AMD Admin and
          AMD Holding are not subject to encumbrances nor has any security been
          granted in favor of third parties in respect thereof save in respect
          of customary retention of title in favor of suppliers agreed in the
          ordinary course of business. No agreements with respect to extended or
          prolonged retention of title nor current account or group retention of
          title agreements have been concluded with material suppliers;

15.1.15   The operation and assets of AMD Holding, AMD Saxony LLC, AMD Admin and
          AMD Saxonia are fully insured against all risks customarily insured
          against by similar businesses and on similar terms. All insurances
          have been entered into with first class reputable insurance companies
          which are not affiliates of AMD Inc. The insurances in force from time
          to time in accordance with the progress of the Project will at a
          minimum satisfy the requirements set out in ss. 17.8 and Schedule 22;

15.1.16   AMD Saxonia, AMD Saxony LLC, AMD Admin and AMD Holding have submitted
          all necessary tax filings within a reasonable time of the relevant due
          date and in any event before penalties attach thereto. None of AMD
          Saxonia, AMD Saxony LLC, AMD Admin or AMD Holding is in default in
          relation to the payment of any tax claims or any other public law
          claims, other than those referred to in ss. 15.1.17, which are due
          except for these which are being contested in good faith by
          appropriate proceedings and for which proper provision has been made
          in accordance with German generally accepted accounting principles or
          US GAAP (as applicable). There is no proposed tax assessment against
          AMD Saxonia, AMD Saxony LLC, AMD Admin or AMD Holding which would, if
          made, have a material adverse effect on the financial position of AMD
          Holding, AMD Saxony LLC, AMD Admin or AMD Saxonia, respectively;

                                       36



15.1.17   All governmental or public law approvals, consents and measures
          (including those from the European Union) necessary for the proper
          implementation of the Project and the compliance by AMD Saxonia, AMD
          Saxony LLC, AMD Admin and AMD Holding of their obligations pursuant to
          the Operative Documents including in particular all such approvals,
          consents and measures necessary to ensure the legally binding nature
          of all governmental subsidies and grants in connection with the
          Project have been obtained, save for those set out in Part B to
          Schedule 20 and there are no grounds to believe that they could be
          revoked or cancelled or made subject to material restrictions;

15.1.18   All governmental or public law approvals, consents and measures set
          out in Part A of Schedule 20 have been obtained or taken and there is
          no reason to believe that (i) the same would be revoked, cancelled,
          limited or made subject to conditions of a material adverse nature nor
          that (ii) the governmental approvals consents and measures set out in
          Part B of Schedule 20 will not ultimately be available on a timely
          basis;

15.1.19   The business of each of AMD Saxonia, AMD Saxony LLC, AMD Admin and AMD
          Holding is not subject to any unusual limitations of a material nature
          which might affect compliance by them of their obligations pursuant to
          the Operative Documents;

15.1.20   Neither AMD Saxonia nor AMD Holding has engaged in any business or
          operation or incurred liabilities save in connection with their
          incorporation, the Project and the Operative Documents. Neither AMD
          Saxony LLC nor AMD Admin has engaged in any business or operation or
          incurred any liabilities save in connection with their incorporation,
          the Conversion Documents and the Operative Documents to which they are
          a party;

15.1.21   The factual information furnished by AMD Saxonia, AMD Saxony LLC, AMD
          Admin or AMD Holding to the Agent or to the Banks in connection with
          any of the Operative Documents or the subject matter thereof
          (including the Information Memorandum dated September 1996) is true
          and accurate in all material respects and have not become misleading
          as a result of the omission of any material fact. All assumptions,
          estimates and projections contained therein have been made with due
          care and attention; and

15.1.22   AMD Saxonia has not entered into any Material Equipment Supply
          Contracts or Material Service Contracts other than those notified to
          the Agent in writing, together with copies of the relevant contract or
          orders.

15.2     The above representations and warranties (with the exception of the
         representation in ss. 15.1.4) shall be deemed repeated in full on the
         date of each Drawdown Notice, on the completion of each Project Phase
         pursuant to the Project Schedule, the Conversion Effective Date, and
         each submission of AMD Saxonia's annual financial statements by
         reference to the facts and circumstances then existing.

                                       37



                                     ss. 16
                     Reporting and Information Requirements

16.1    AMD Saxonia will as soon as possible and in any event within five
        Banking Days after becoming aware thereof inform the Agent of the
        occurrence of an Event of Default within the meaning of ss. 21 or any
        other Event of Default which in the reasonable opinion of an experienced
        third party would affect the legal or risk position of the Banks under
        this Agreement in a manner which is more than immaterial by notice in
        writing setting out the relevant circumstances and describing the
        measures within its powers which AMD Saxonia proposes to take in
        relation thereto.

16.2    AMD Saxonia undertakes to keep the Agent regularly informed of its
        financial affairs during the term of the Facilities. In particular, it
        is agreed as follows:

16.2.1  AMD Saxonia will as soon as possible and in any event within sixty (60)
        days of the end of each quarter of each financial year or, in the case
        of the last quarter of a financial year, within ninety (90) days of such
        quarter, furnish the Agent with (i) quarterly financial statements
        (balance sheet and profit and loss statement as well as a cash flow
        statement) for the relevant quarter and the period of the four preceding
        financial quarters including a comparative statement for the four
        financial quarters preceding such period together with (ii) a
        certificate of compliance in respect of the financial covenants as set
        out in Schedule 18, in each case in a form reasonably satisfactory to
        the Agent. The quarterly financial statements to be delivered hereunder
        shall be prepared in accordance with generally accepted accounting
        principles applicable in Germany as consistently applied.

16.2.2  AMD Saxonia will as soon as possible and at the latest within ninety
        (90) days after the end of each financial year furnish to the Agent
        audited financial statements prepared by the Auditor confirming that the
        financial statements are unqualified and including notes to the
        statements and a management report, together with an audited cash flow
        statement including comparative figures for the preceding financial year
        and an updated Management Plan. At the same time, AMD Saxonia will
        furnish the Agent with confirmation of the Auditor that the quarterly
        financial statements furnished at the end of a financial quarter
        correspond with the audited annual financial statements and AMD
        Saxonia's books of account (including a reconciliation statement) and
        whether the financial covenants set out in Schedule 17 have been
        properly calculated and have been complied with in the relevant
        financial year, together with a confirmation in accordance with ss.
        15.2.

16.2.3  AMD Saxonia will furnish to the Agent, simultaneously with the annual
        financial statements and other documents pursuant to ss. 16.2.1 and ss.
        16.2.2 written confirmation that as at the end of the relevant balance
        sheet date no Event of Default within the meaning of ss. 21.2 has
        occurred or, alternatively, which events have lead to such an Event of
        Default during the relevant balance sheet period. If such Event of
        Default has occurred, written notice thereof in accordance with ss. 16.1
        shall be given to the Agent, together with written confirmation that,
        except as stated therein, to AMD Saxonia's knowledge no other Events of
        Default have occurred.

                                       38



16.2.4  AMD Saxonia will furnish to the Agent immediately after receipt all
        reports and similar documents prepared by the auditors or other
        independent firms of accountants and which relate to audits undertaken
        as of the end of a financial year or any interim audits.

16.2.5  [left intentionally blank]

16.2.6  AMD Saxonia will furnish to the Agent the following:

        (i)     within thirty (30) days after the end of each calendar quarter a
                status report in the form set out in Schedule 8, as amended;

        (ii)    within sixty (60) days of the end of each quarter of each
                financial year, or in the case of the last quarter of a
                financial year within ninety (90) day of such quarter and within
                ninety (90) days after the end of each Project Phase a Statement
                as to the Use and Source of Funds and compliance with the
                reimbursement obligations of the AMD Saxonia Wafer Purchase
                Agreement in accordance with Schedule 16, as amended, signed by
                the Auditor; and

        (iii)   at the latest by 28 February 2002, a status report as of 31
                December 2001 relating to the Project prepared by the Technical
                Advisor updating (and in form similar to) the Technical
                Appraisal of the Technical Advisor dated 5 October 2000.

16.3    AMD Saxonia will inform the Agent promptly in writing in the event that
        production in the Fabrication Facility or research activity in the
        Design Center is not undertaken at any time after first commercial
        shipment of Products (as defined in the AMD Saxonia Wafer Purchase
        Agreement) for a period of more than five (5) successive days or if
        legal administrative or arbitration proceedings are instituted or
        threatened against AMD Saxonia, AMD Saxony LLC, AMD Admin or AMD Holding
        which may have a material adverse affect on the assets or ability of AMD
        Saxonia, AMD Saxony LLC, AMD Admin or AMD Holding to comply with their
        respective obligations under the Operative Documents.

16.4    AMD Saxonia will inform and keep the Agent informed in a reasonable
        manner of all circumstances relating to the operations of AMD Saxonia,
        AMD Saxony LLC, and AMD Admin and their respective other activities as
        well as its economic situation to the extent required by the Agent or
        any Bank or to the extent the same may have a material adverse effect on
        the financial position of AMD Saxonia, AMD Saxony LLC or AMD Admin or
        the viability of the Project. This obligation also applies to
        circumstances affecting any affiliate of AMD Saxonia and which may
        materially adversely affect the operations or other activities or
        economic position of AMD Saxonia, AMD Saxony LLC or AMD Admin or the
        assets which are the subject matter of the Security Documents.

16.5    On any change to the Commercial or Land Registry extracts or the
        Conversion Documents furnished to the Agent, AMD Saxonia will promptly
        inform the Agent of the relevant event by providing copies of the
        documents to be filed with the Commercial or Land Registry or Secretary
        of State of the State of Delaware and, following filing, AMD Saxonia
        will provide the Agent with certified copies of the new extracts.

                                       39



                                     ss. 17
                                    Covenants

17.1    [left intentionally blank]

17.2    AMD Saxonia will comply in all material respects with all relevant laws
        and other regulations and administrative directives applicable to it and
        will on a timely basis comply with all reasonable requirements of the
        fiscal authorities.

17.3    AMD Saxonia will at all times promptly enforce to the full extent
        reasonable all its rights under the Operative Documents and at the
        Agent's request will take all reasonable steps to so do. AMD Saxonia
        hereby irrevocably appoints the Agent to take all measures and to enter
        into all undertakings which the Agent regards as necessary following the
        occurrence of an event which entitles the Banks to terminate this
        Agreement.

17.4    AMD Saxonia undertakes to complete the Project in accordance with:

        (i)     the timetable contained in the Project Schedule (save that the
                completion date of any Project Phase (other than last) may be
                deferred for up to six (6) months in aggregate for all such
                deferrals) provided that Completion shall be no later than 31
                December 2000; and

        (ii)    the Plans and Specifications.

17.5    AMD Saxonia will on a timely basis and to the full extent comply with
        its obligations pursuant to the Operative Documents and particular, take
        all steps to enable AMD Inc. and/or AMD Holding and/or AMD Saxony LLC
        and/or AMD Admin to comply with its respective obligations under the
        Sponsors' Support Agreement, in particular in connection with the
        increase of AMD Saxonia's capital (Haftsummen and Pflichteinlagen) as
        well as the contribution of other capital by the Sponsors. If AMD
        Saxonia intends not to comply with its obligations pursuant to the
        Operative Documents it will immediately inform the Agent thereof in
        writing.

17.6    AMD Saxonia will permit the Agent, the Banks' Auditor and the Technical
        Advisor as well as all other advisors of the Agent who are bound by a
        professional duty of confidence at all reasonable times to inspect its
        properties and to examine the financial and other records of AMD Saxonia
        and to discuss the affairs of AMD Saxonia, AMD Saxony LLC, AMD Admin and
        AMD Holding to the extent relevant to this Agreement and the risk
        position of the Banks hereunder with the management and competent
        employees. AMD Saxonia will provide unrestricted access to its relevant
        records and those of AMD Holding, AMD Saxony LLC and AMD Admin and make
        available a reasonable number of copies thereof at reasonable request.
        All such inspections and examinations shall be performed in such manner
        as not to unreasonably disrupt AMD Saxonia's normal business operations
        and its manufacture of the products described in the preamble to this
        Agreement.

                                       40



17.7    AMD Saxonia will at all times maintain proper books of account and
        prepare its records in accordance with general accepted book keeping and
        accounting principles in Germany as consistently applied. The balance
        sheet assumptions will be applied consistently by reference to generally
        accepted valuation principles.

17.8    AMD Saxonia will at all times maintain insurance which in type (all
        buildings, machines, other equipment, stock, business interruption,
        third party liability and the like), scope and amount is at least equal
        to the insurance cover of a comparable business and which, in addition,
        satisfies the requirements of the Operative Documents. In particular,
        AMD Saxonia undertakes to maintain the insurances referred to in
        Schedule 22 in the scope and on the terms and conditions therein
        referred to, save that AMD Saxonia shall be under no obligation to
        maintain insurance with respect to the risk of earthquake and floods,
        provided that it shall have first furnished to the Agent confirmation
        with respect thereto in writing from a third party (acceptable to the
        Agent) in form and substance satisfactory to the Banks and the
        Guarantors. The persons referred to in Schedule 22 shall be named in all
        contracts of insurance as an additional insured and the Security Agent
        as "loss payee" in accordance with Schedule 22. At the end of each
        financial year, AMD Saxonia will furnish to the Agent a complete list of
        the above insurances for the next succeeding financial year giving the
        details referred to in Schedule 22 together with confirmation from its
        insurance brokers and the Insurance Advisor that AMD's insurance cover
        complies with the said requirements.

17.9    AMD Saxonia will construct the Plant and the Design Center in such a way
        as will ensure that the Plans and Specifications are complied with.

17.10   AMD Saxonia will at all times ensure that it has obtained and/or taken
        and will maintain and/or take on a timely basis all necessary
        governmental approvals, permits and measures required for performance by
        it of its obligations under the Operative Documents to which it is
        party.

17.11   AMD Saxonia will make payment of all fees and other amounts due in
        connection with the 65/35 Guaranty promptly. The Guarantors through
        their authorized representatives, C&L Deutsche Revision AG, Dusseldorf,
        are entitled to payment of one-off and regular fees together with
        commitment fees and processing fees in connection with the 65/35
        Guaranty in accordance with the following provisions (as a genuine
        contract for the direct benefit of third parties):

        (i)     AMD Saxonia shall after acceptance, and for the duration, of the
                65/35 Guaranty pay the following guaranty fees:

                           on the issue of the guaranty commitment, 0.25% of the
                           maximum guaranty amount in relation to the guaranteed
                           indebtedness, whereby the calculation of the fee will
                           be determined in accordance with the drawdowns (in
                           accordance with Section 5 of the Guaranty Decision)
                           so that the fee due on the issue of the documents
                           relating the Guaranty Decision are calculated only by
                           reference to the first drawdown and the first fees
                           due in respect of the following drawdowns are due
                           when

                                       41



                        suchdrawdowns are included in the terms of the Guaranty
                        and/or in the case of special guaranty issues on the
                        issue of the Guaranty.

                        following the issue of the guaranty, on 1 April and 1
                        October of each year in respect of each half year
                        commencing on such dates, 0.25% of the Guaranty amount
                        outstanding at such times (the maximum amount referred
                        to in the Guaranty in respect of the guaranteed
                        indebtedness less payments of principal).

       (ii)   AMD Saxonia undertakes to pay the following amounts to the
              Guarantors, in the event that the Guarantors shall so request:

                        on any extension of the guaranty commitment, a
                        commitment fee up to an amount of 0.25% of the extended
                        guaranty commitment,

                        in the event of material amendments to a guaranty which
                        has been approved but not yet issued, a processing fee
                        in an amount of up to DM 25,000;

       (iii)  the processing fee for material amendments to an approved but
              unissued guaranty is payable to C&L Deutsche Revision AG,
              Dusseldorf to its Account No. 31 308 12, Westdeutsche Landesbank
              Girozentrale, Dusseldorf. Other current fees together with the
              commitment fee are payable to C&L Treuarbeit Deutsche Revision AG,
              Dusseldorf to their trust account "Bundesminister der Finanzen"
              Account No. 30 151 12 at Westdeutsche Landesbank Girozentrale,
              Dusseldorf quoting the reference number of the guaranty.

17.12  AMD Saxonia undertakes to comply with and to fulfill all covenants and
       other ancillary requirements applicable to it in connection with the
       grant of the subsidies. This obligation applies in particular to
       covenants and ancillary requirements which are dealt with in the SAB/
       Dresdner Subsidy Agreement and the AMD/Dresdner Subsidy Agreement
       together with the schedules to these documents. AMD Saxonia also
       undertakes to ensure that AMD Companies undertake all steps applicable to
       them under the covenants and other ancillary requirements in connection
       with the subsidies. AMD Saxonia undertakes furthermore to ensure that all
       obligations undertaken by it in connection with the granting of other
       state aid (in particular investment allowances) are fulfilled.

17.13  AMD Saxonia undertakes to enter into the Equipment Supply Contracts and
       Service Supply Contracts in accordance with the timetable set out in the
       Project Schedule and to ensure that equipment or goods delivered pursuant
       thereto are subject to retention of title only to the extent customary
       and in the ordinary course of business. AMD Saxonia will use its best
       endeavors to ensure that retention of title arrangements are not entered
       into with material suppliers and in any event that no current account,
       group or extended or prolonged retention of title agreements are entered
       into. The Equipment Supply Contracts entered into by AMD Saxonia shall
       not in the aggregate require the making of

                                       42



       advance payments by AMD Saxonia in excess of an aggregate amount of DM
       20,000,000.

17.14  AMD Saxonia undertakes to hedge at least 50% of all variable interest
       rate advances with interest rate caps with the Agent or other Banks and
       to inform the Paying Agent thereof. Any advances for which AMD Saxonia
       has elected a fixed interest rate pursuant to ss. 6.3 shall be deemed
       hedged for the purposes of this ss. 17.14. All rights arising out of
       contracts entered into by AMD Saxonia to hedge interest rate shall be
       assigned to the Security Agent in accordance with the Global Assignment
       in the form set out in Schedule 47; to the extent an assignment is not
       possible, the Banks shall be granted other appropriate security rights.

17.15  AMD Saxonia undertakes that, until satisfaction in full of all claims of
       the Banks under this Agreement, it will not, without the consent of the
       Agent and, in the case of (ii), (v), (ix) and (x) without the consent of
       the Guarantors:

       (i)    grant in favor of third parties any security as security for its
              own obligations or those of a third party save as contemplated or
              permitted by the Operative Documents and save for customary
              retention of title rights in favor of suppliers permitted pursuant
              to ss. 17.13. AMD Saxonia's right to further encumber real
              property already subject to land charges in favor of the Banks
              shall remain unaffected (ss. 1136 BGB);

       (ii)   incur indebtedness for borrowed money or incur liabilities save
              for such liabilities contemplated in the Operative Documents and
              liabilities in the ordinary course of business;

       (iii)  save in respect of the lease agreement in respect of premises at
              Washingtonstrasse 16 A/B, 01139 Dresden, dated 7/13.08.1996
              entered into with Siemens Technopark GmbH Dresden & Co.
              Grundstucksverwaltung OHG or any extension thereof, incur any
              other obligations as lessee, save to the extent that such
              obligations arise under agreements entered into in the ordinary
              course of business in connection with the operation of the
              Fabrication Facility and of the Design Center and do not exceed in
              aggregate more than DM 50,000,000;

       (iv)   establish any subsidiaries or acquire interests in any other
              undertakings or enter into any merger agreements;

       (v)    dispose of any assets or rights and/or remove such assets from the
              location of the Fabrication Facility and the Design Center save to
              the extent (a) contemplated by and permitted in the Operative
              Documents (b) the disposal is of assets replaced by assets of at
              least equal or greater cost in the ordinary course of business
              which are acquired within six months of the sale of the original
              assets (or such longer period as is reasonably necessary in the
              light of the market availability of the relevant asset and
              provided that AMD Saxonia has entered into contractually binding
              agreements for the replacement of the original assets within three
              months of the sale of such assets), or (c) the aggregate book
              value of which does not exceed

                                       43



              DM 25,000,000 in any calendar year or (d) the disposal is of
              assets with an individual acquisition cost of less than DM 50,000
              or of stores supplies in the ordinary course of business;

       (vi)   make any loans to or deposit funds with any third party, purchase
              or acquire securities or other financial instruments, save to the
              extent the same:

              (a)   are assets held in the bank accounts charged pursuant to ss.
                    8 or such other accounts opened with the consent of the
                    Agent, which are charged to the Banks,

              (b)   constitute trade credit,

              (c)   constitute the payment of amounts due under the AMD Saxonia
                    Wafer Purchase Agreement in respect of deliveries
                    thereunder, or

              (d)   are bona fide employee loans which are in aggregate not in
                    excess of DM 5,000,000,

              (e)   relate to the payment of amounts in respect of AMD Saxonia's
                    stated capital which shall be transferred promptly to a
                    Project Account pursuant to ss. 19, or

              (f)   are (for the avoidance of doubt) employee salary funds
                    withheld by AMD Saxonia for employees to acquire stock of
                    AMD Inc. in connection with an employee stock purchase plan;

       (vii)  make any payments (i) in connection with profits (Gewinnanspruch),
              including but not limited to, any and all rights and claims
              arising in connection with the capital accounts (Kapitalkonten),
              loan accounts (Darlehenskonten), and the private accounts
              (Privatkonten) of any partner (Gesellschafter), (ii) in connection
              with claims for distribution-quota (Auseinandersetzungsanspruche),
              including but not limited to, any compensation in case of
              termination (Auflosung), in particular claims for liquidation
              proceeds (Liquidationserlos) and the withdrawal (Ausscheiden) of a
              partner; (iii) in connection with a repayment of capital in the
              case of a capital reduction (Herabsetzung der Einlage oder der
              Pflichteinlage), repayment of capital (Ruckzahlung von Einlagen)
              or (iv) in connection with any other pecuniary claims (geldwerte
              Forderungen) to AMD Holding, AMD Saxony LLC or AMD Admin or (v) to
              make any other payment to AMD Inc. or to any affiliate of AMD
              Inc., save to the extent such payments are permitted pursuant to
              Section 3 of the Sponsors' Subordination Agreement, in the form
              set out in Schedule 30 or Section 6.3 of the Sponsors' Support
              Agreement;

       (viii) make payments pursuant to the Operative Documents (and, in
              particular, not to make any repayment of interest or principal on
              the Sponsors' Loans and the Revolving Loans) save in accordance
              with the terms of such Operative Documents;

                                       44



       (ix)   undertake only business compatible with the purpose set out in the
              first paragraph of the preamble to this Agreement;

       (x)    incur any expenditure (including Capital Expenditure) which is not
              of the type contemplated in the Operative Documents and which is
              not incurred in the ordinary course of business;

       (xi)   terminate or amend any of the Operative Documents, save for

              (a)   Equipment Supply Contracts which are not Material Equipment
                    Supply Contracts;

              (b)   Service Contracts which are not Material Service Contracts;

              (c)   amendments to the agreement set out in Schedule 39
                    (Design/Build Agreement), the Material Equipment Supply
                    Contracts, the Material Service Contracts and the Plans and
                    Specifications which adversely affect the value of the
                    Project, the Fabrication Plant and the Design Center or
                    their purpose, or the production capacity or other
                    characteristics required or agreed in the AMD Saxonia Wafer
                    Purchase Agreement in a manner which is immaterial only and
                    which are in accordance with the Project Budget and the
                    Project Schedule are however permitted without the consent
                    of the Banks;

              (d)   the Project Budget and the Project Schedule which may be
                    amended in accordance with the provisions of ss. 18.

       (xii)  agree to any changes to the AMD Saxonia Partnership Agreement, in
              particular changes of its fiscal year, or grant any general powers
              of attorney with respect to the business of AMD Saxonia, except as
              otherwise permitted in the Operative Documents;

       (xiii) enter into any agreement compliance with which would be contrary
              to any of the obligations of AMD Saxonia pursuant to the Operative
              Documents;

       (xiv)  [left intentionally blank]

       (xv)   at any time during the currency of this Agreement manufacture in
              any quarter microchip silicon wafers containing microprocessors
              other than general purpose microprocessors and related products in
              such number as would, prior to Completion, be in excess of 25% or
              after Completion, be in excess of 35% of all wafers produced by
              AMD Saxonia during the relevant quarter.

17.16  AMD Saxonia undertakes until the satisfaction in full of all claims of
       the Banks under this Agreement to ensure that the financial covenants set
       out in Schedule 17 are complied with at all times and/or to the extent
       AMD Saxonia has no direct influence on compliance with such financial
       covenants, to use its best endeavors to ensure that they are so complied
       with.

                                       45



17.17    AMD Saxonia undertakes to keep and maintain its fixed and current
         assets exclusively within the area of the Plant and Design Center shown
         in Schedules 44 and 45.

17.18    [left intentionally blank]

17.19    AMD Saxonia undertakes, as a genuine contract for the direct benefit of
         third parties, to permit an examination at any time by the Guarantor or
         an authorized representative of the Guarantor as to whether there is
         any possibility of a claim being made pursuant to the 65/35 Guaranty or
         as to whether circumstances exist or have existed which would make such
         a claim possible. AMD Saxonia furthermore undertakes (as a genuine
         contract for the direct benefit of third parties) to provide to the
         Guarantors all information requested by them in connection with the
         65/35 Guaranty. AMD Saxonia is aware that the examination and
         information rights referred to above exist also in favor of the Banks,
         however, only to the extent such documentation relates to the
         guaranteed Facilities. AMD Saxonia hereby relieves and discharges the
         Banks from their duty of confidentiality as against the Guarantors and
         their authorized representatives, to the extent that the aforesaid
         rights in favor of the Banks are exercised. AMD Saxonia undertakes, as
         a genuine contract for the direct benefit of third parties, to bear the
         costs of all examinations by the Guarantors referred to above.

17.20    [left intentionally blank]

17.21    AMD Saxonia undertakes not to enter into any confidentiality and
         non-competition undertakings with its employees, officers or
         contracting parties other than in the form agreed with the Agent prior
         to entering into this Agreement or save as may be otherwise agreed with
         the Agent.

17.22    AMD Saxonia will at the request of the Agent use its best endeavors to
         obtain from any contracting parties a Consent and Agreement, to the
         extent that such Consent and Agreement is not required to have been
         already obtained, for contracts required to be assigned to the Banks in
         accordance with this Agreement or the Security Documents, in the form
         set out in Part II of Schedule 40 or such other form as shall have been
         consented to by the Agent, if the Agent deems the same to be necessary
         to ensure the unrestricted continuation of the Project in the event of
         enforcement of its security and AMD Saxonia does not demonstrate the
         contrary and will make an offer to the Agent enabling it to assume the
         contract in accordance with the provisions of ss. 3 of the Security
         Document referred to in Schedule 49.

17.23    AMD Saxonia will make borrowings under the Revolving Loan Facility
         Agreement (in accordance with the terms thereof):

         (i)      as and to the extent necessary to comply at all times after 1
                  July 2001 with the Minimum Liquidity Covenant (taking into
                  account cash then on deposit in the Project Accounts and Cash
                  Equivalent Investments (under and as defined in Schedule 23)
                  then held); and

         (ii)     as and to the extent and at the times necessary such that AMD
                  Saxonia shall have sufficient funds to finance its general
                  corporate funding requirements, taking into

                                       46



               account amounts then available for drawing under Facility A
               hereunder and other amounts then available to it, including
               without limitation amounts theretofore paid to AMD Saxonia under
               the AMD Saxonia Wafer Purchase Agreement.

         AMD Saxonia undertakes not to reduce or agree to reduce the Total
         Revolving Loan Commitment Amount to less than US$750,000,000 (seven
         hundred and fifty million US Dollars) without the consent of the Agent.

                                     ss. 18
                        Project Budget; Project Schedule

18.1     Prior to Completion, the Project will be implemented pursuant to the
         Project Budget and the Project Schedule.

18.2     Within fourteen (14) days after the end of each Project Phase described
         in the Project Schedule, AMD Saxonia will furnish to the Agent the
         Scheduled Project Phase Technical Completion Certificates signed by the
         AMD Companies and the Technical Advisor in accordance with Schedules 9
         and 10 together with a confirmation pursuant to ss. 15.2. At the same
         time, AMD Saxonia will furnish an updated Management Plan approved by
         the Sponsors setting out all projected future Capital Expenditure in
         connection with the Project. Prior to Completion, AMD Saxonia will
         consult and agree with the Agent on a timely basis any amendments or
         variations to the Project Budget or the Project Schedule which it
         regards as necessary. Project Budgets and Project Schedules amended
         with the consent of the Agent, who may consult with the Technical
         Advisor, the Auditor and the Banks' Auditors with regard thereto, shall
         be regarded as Project Budgets and Project Schedules within the meaning
         of this Agreement.

                                     ss. 19
                                Project Accounts

19.1     AMD Saxonia undertakes to ensure that - without prejudice to ss. 17.15
         (vi) (e) - all payments under the Operative Documents or otherwise in
         connection with the Project which are made to it or to be paid by it
         are effected only through one or more of the accounts maintained with
         the Security Agent (such accounts herein referred to as "Project
         Accounts").

19.2     Amounts standing to the credit of the Project Accounts may be used only
         in the ordinary course of business of AMD Saxonia (including for the
         purpose of financing Capital Expenditure), for the settlement of
         financing costs and for the repayment of the Facilities, the payment of
         interest and the repayment of principal under the Revolving Loan
         Facility Agreement (to the extent permitted under the Sponsors'
         Subordination Agreement set out in Schedule 30, as amended).

19.3     Cash standing to the credit of the Project Accounts may be invested in
         the securities and assets set out in Schedule 23 which shall be
         maintained in a custody account maintained solely with the Security
         Agent forming part of a Project Account or in other custody accounts
         opened with the consent of the Agent and charged to the Banks.

                                       47



19.4     [left intentionally blank].

19.5     The Banks shall be entitled to set off any claims due against AMD
         Saxonia against the amount standing to the credit of any of the Project
         Accounts; it shall be sufficient for this purpose for the Agent to
         issue a declaration of set off.

19.6     All credits securities and assets standing to the credit of the Project
         Accounts shall be charged in favor of the Banks as security for their
         claims under this Agreement pursuant to ss. 8.

                                     ss. 20
                              Consent of the Banks

20.1     In all cases in which AMD Saxonia requires the consent of the Agent,
         the Security Agent or the Banks pursuant to the provisions of this
         Agreement, the Agent, the Security Agent and/or the Banks shall be
         entitled to withhold their consent only if the legal or risk exposure
         of the Banks would otherwise be affected in a manner which is material.
         In this regard circumstances shall be regarded as material which
         relate, in particular, to:

         (i)   the interests of the Banks in receiving payments under this
               Agreement and the other Operative Documents in a timely and
               complete manner or which would affect their ability to realize
               sufficient proceeds from the realization of security;

         (ii)  the shareholding or capital structure of AMD Inc., AMD Holding,
               AMD Admin, AMD Saxony LLC and AMD Saxonia, except in connection
               with the Substitution (if any);

         (iii) the obligations of the Sponsors, AMD Saxony LLC and AMD Admin
               pursuant to the Sponsors' Support Agreement;

         (iv)  the viability of the Project by reference, in particular, to the
               obligations of AMD Inc. under the AMD Holding Wafer Purchase
               Agreement and the AMD Holding Research, Design and Development
               Agreement in the form set out in Schedule 34 or AMD Holding under
               the AMD Saxonia Wafer Purchase Agreement and the AMD Saxonia
               Research, Design and Development Agreement in the form set out in
               Schedule 36; or

         (v)   the compliance in full or the ability to comply with the
               conditions of the Guaranty Decision, the 65/35 Guaranty and the
               AMD/Dresdner Subsidy Agreement.

20.2     Each consent of the Banks shall be in writing. The parties agree that
         the consent of the Banks shall not be deemed to have been given unless
         expressly given in writing and that consents should be given on a
         timely basis taking into account the interests of AMD Saxonia and the
         other Banks. The Agent shall be authorized to give such consent unless
         such consent relates to the duties of the Paying Agent. In such case,
         the Paying Agent may give such consent.

                                       48



                                     ss. 21
                   Termination of the Facilities by the Banks

21.1     The Banks shall be entitled to terminate the Facilities for good cause,
         in whole or in part,  and without notice or subject to such notice as
         they may determine and,

         (i)   to refuse to make available to AMD Saxonia advances under the
               Facilities and/or

         (ii)  to require the immediate repayment of all outstanding advances
               together with accrued interest and other fees and amounts payable
               by AMD Saxonia pursuant to this Agreement and/or

         (iii) to require the payment of damages including any loss of profit
               pursuant to ss. 12 which the Banks may suffer following
               termination between the time of termination and the expiry of the
               relevant Interest Period and/or

         (iv)  to realize the security provided by or on behalf of AMD Saxonia,

21.2     There shall be good cause for termination within the meaning of the
         aforesaid ss. 21.1 and of ss. 19 of the General Terms and Conditions of
         the Agent, in particular, if any of the following events has occurred
         and is continuing and if in the opinion of the Banks, exercising the
         standard of care customary in commercial relations, the legal or risk
         position of the Banks is materially adversely affected thereby:

         (i)   AMD Saxonia shall be in default in any payment of interest or
               principal under this Agreement for more than three months;

         (ii)  the information provided by AMD Saxonia in respect of its
               financial position is incorrect or incomplete in any material
               respect;

         (iii) AMD Saxonia, AMD Admin or AMD Holding ceases payment of its
               creditors or composition, insolvency or similar proceedings are
               applied for in respect of all of the assets of AMD Saxonia, AMD
               Admin or AMD Holding or a material part of the assets of AMD
               Saxonia, AMD Admin or AMD Holding are subject to mandatory
               attachment or AMD Saxonia, AMD Admin or AMD Holding enters into
               negotiations with respect to any extra-judicial composition
               proceedings;

         (iv)  AMD Saxonia, AMD Holding or AMD Inc. are in default of any
               payment due to the Banks pursuant to the Sponsors' Support
               Agreement or any other Operative Document for more than five (5)
               Banking Days following receipt of written notice of default;

         (v)   the Facilities are not used for the purposes set out in ss. 3;

         (vi)  any representation and warranty pursuant to ss. 15 including any
               deemed repetition thereof, was incorrect in any material respect
               at the time it was given;

                                       49



         (vii)    any condition precedent for utilization of the Facilities
                  pursuant to ss. 5 subsequently ceases to be complied with
                  without the previous consent of the Banks;

         (viii)   any of the obligations or covenants pursuant to ss. ss. 17 or
                  18 are breached, whether or not as a result of action by AMD
                  Saxonia, and cannot be complied with or remedied or, to the
                  extent the breach is capable of remedy, the breach is not
                  remedied within seven (7) Banking Days after the Agent has
                  given AMD Saxonia written notice thereof;

         (ix)     AMD Holding, AMD Saxony LLC, AMD Admin or AMD Inc. does not
                  comply with any material provision of the Sponsors' Support
                  Agreement, the Sponsors' Loan Agreement in the form set out in
                  Schedule 29, as amended, the Revolving Loan Facility Agreement
                  or of any other Operative Documents to which it is a party
                  and, to the extent, the breach is capable of remedy, and, is
                  not remedied within seven (7) Banking Days after the Agent has
                  given written notice thereof; Articles I and III and Sections
                  4.1, 4.3, 6.2, 13.1 (i) (a) to (d) and (f), 13.1 (iii) and
                  (iv), 13.2, 13.3, 13.4 (i) to (viii) and (x), 13.5, 13.6 and
                  13.7 of the Sponsors' Support Agreement shall without
                  prejudice to the generality of the foregoing be regarded as
                  material;

         (x)      if AMD Inc. undertakes a "Stock Offering" within the meaning
                  of the Sponsors' Support Agreement in the Fiscal Year 1998
                  and, if permitted under the Indenture referred to in ss. 21.2
                  (xvi) of this Agreement (without utilizing any of the
                  provisions contained in the first proviso to Section 4.07 (iv)
                  thereof), AMD Inc. fails to contribute the full amount of the
                  "Class C Sponsors Loans" within the meaning of the Sponsors'
                  Support Agreement forthwith following receipt of proceeds from
                  the "Stock Offering" referred to above; the events referred to
                  in (ix) above shall remain unaffected;

         (xi)     AMD Saxonia is in breach of any material provision of this
                  Agreement, the Security Documents, the AMD Saxonia Research,
                  Design and Development Agreement in the form set out in
                  Schedule 36 or the AMD Saxonia Wafer Purchase Agreement;

         (xii)    any of the Operative Documents is or becomes invalid or
                  unenforceable or its validity or enforceability is challenged
                  by AMD Saxonia, any of the Sponsors, AMD Saxony LLC or AMD
                  Admin, or the Power of Attorney is revoked by AMD Saxony LLC,
                  AMD Admin or AMD Holding.

         (xiii)   receivership, composition or insolvency proceedings against
                  the assets of the contractor for the Fabrication Facility and
                  the Design Center or against a supplier are commenced or there
                  is a material adverse change in the financial position of such
                  general contractor or such supplier and any such event could
                  reasonably be expected to have a material adverse effect on
                  the Project, unless AMD Saxonia has cured the relevant event
                  by entering into adequate substitute arrangements satisfactory
                  to the Agent within 45 days;

                                       50



         (xiv)   a material adverse change in the financial condition of AMD
                 Saxonia, AMD Holding, AMD Saxony LLC, AMD Admin or AMD Inc., or
                 AMD Inc. on a consolidated basis, and as result there is likely
                 to be a material adverse effect on the Project;

         (xv)    AMD Saxonia, AMD Holding, or AMD Inc. are in default with any
                 payment obligation in favor of a third party in an aggregate
                 amount of more than DM 15,000,000, or AMD Saxony LLC (except
                 with regard to any payment obligation of AMD Saxonia which is a
                 liability of AMD Saxony LLC by virtue of its general
                 partnership interest) or AMD Admin are in default with any
                 payment obligation in favor of a third party in an aggregate
                 amount of more than Euro 100,000;

         (xvi)   The occurrence of an "Event of Default" within the meaning of
                 the Loan and Security Agreement of 13 July 1999, as amended,
                 between, inter alia, AMD Inc. and Bank of America National
                 Trust & Savings Association as "Administrative Agent".

         (xvii)  any action under this Agreement requiring consent is undertaken
                 without the necessary consent unless the refusal to grant
                 consent is unlawful or in contravention of the terms of this
                 Agreement;

         (xviii) the insurances to be maintained pursuant to ss. 17.8 are not
                 maintained in full force and effect;

         (xix)   any material governmental approvals, consents or permits are
                 not granted, are revoked or are made subject to conditions or
                 if any governmental regulations or decrees are passed relating
                 to the Project which will prejudice the viability of the
                 Project and which are not either set aside by adequate action
                 of AMD Saxonia to discharge the effects of such regulations or
                 decrees or if AMD Saxonia has not suggested a course of action
                 reasonably satisfactory to the Agent within 30 days thereof;

         (xx)    any statement made to the Banks by AMD Saxonia, AMD Holding,
                 AMD Saxony LLC, AMD Admin or AMD Inc. in connection with the
                 Project is inaccurate or incomplete in any material respect to
                 the extent that such statement is of material significance for
                 the viability of the Project or for the compliance by AMD
                 Saxonia, AMD Holding, AMD Saxony LLC, AMD Admin or AMD Inc.
                 with its obligations under the Operative Documents;

         (xxi)   AMD Saxony LLC, AMD Admin and AMD Holding cease to be the sole
                 partners of AMD Saxonia (except in connection with the
                 Substitution (if any)), AMD Holding ceases to have a capital
                 partnership interest (Kapitalanteil) of at least 99.99%
                 (rounded to two decimal points) in AMD Saxonia, (except in
                 connection with the Assignment and Trust Agreement), there is
                 any change in the Euro 250 partnership interest of AMD Admin,
                 (save in connection with the Substitution (if any)), AMD
                 Holding or AMD Saxony LLC ceases to be a wholly-owned

                                       51



                  subsidiary of AMD Inc. or AMD Admin ceases to be a
                  wholly-owned subsidiary of AMD Holding.

         (xxii)   AMD Saxonia's ordinary share capital is not fully paid in by
                  31 December 1997 in an amount of at least DM 217,500,000 or
                  subordinated shareholder loans or Revolving Loans or equity
                  are or is, as the case may be, not made available in
                  accordance with the Sponsors' Support Agreement and/or the
                  Revolving Loan Facility Agreement;

         (xxiii)  projections in the current Management Plan (delivered pursuant
                  to ss. 16.2.2) show that AMD Saxonia will be unable, at any
                  time during the period from the date of such Management Plan
                  to 31 December, 2005, to comply with the Minimum Liquidity
                  Covenant, after taking into account:

                  (a) the Available Revolving Loan Facility Amount; and

                  (b) other cash resources available to AMD Saxonia,

                     unless within 10 Banking Days after receipt of written
                     notice from the Agent, AMD Inc. provides the Agent with
                     such evidence as shall be reasonably satisfactory to the
                     Banks in the exercise of their due discretion with respect
                     to the ability of AMD Inc. and AMD Saxonia to fund the
                     amount necessary to ensure compliance with the Minimum
                     Liquidity Covenant as aforesaid.

         (xxiv)   the terms or conditions of the 65/35 Guaranty or of the
                  Guaranty Decision or the Subsidy Agreement are not complied
                  with or breached or the 65/35 Guaranty is no longer available
                  in full, or investment or interest grants or investments
                  subsidies or other material state assistance is not available
                  in the amount promised and AMD Inc. does not make available
                  compensation pursuant to the Operative Documents, or AMD
                  Saxonia, AMD Holding or AMD Inc. breaches the terms and
                  conditions of other state assistance material to the Project
                  and as a result thereof it is likely that the same will not be
                  available in their full amount or are revoked or cancelled;

         (xxv)    [left intentionally blank]

         (xxvi)   any of financial covenants set out in Schedule 17 are not
                  complied with;

         (xxvii)  the Agent becomes aware that AMD Saxonia has breached any
                  other material contractual obligations;

         (xxviii) other circumstances occur or become known which may prejudice
                  the ability of AMD Saxonia to repay the Facility;

         (xxix)   the Agent has not received by 31 March 2000 written
                  confirmation  from the Technical  Advisor to the effect that
                  the conditions required for Completion in the

                                       52



         Technical Completion Certificate (Technical Advisor) as set out in
         Schedule 10 can be satisfied prior to 31 December 2000;

         (xxx)  Proceedings shall have been applied for or commenced in respect
                of AMD Inc. or AMD Saxony LLC:

                (a) seeking (i) to have an order for relief entered, or (ii)
                    seeking a declaration that AMD Inc. or AMD Saxony LLC is
                    insolvent or (iii) a declaration or finding, or seeking
                    dissolution, winding-up, charter revocation or forfeiture,
                    liquidation, reorganisation, arrangement, adjustment,
                    composition or other similar relief with respect to AMD Inc.
                    or AMD Saxony LLC, its assets or its debts under any law
                    relating to bankruptcy, insolvency, relief of debtors or
                    protection of creditors, termination of legal entities or
                    any other similar law now or hereafter in effect; or

                (b) seeking appointment of a receiver, trustee, liquidator,
                    assignee, sequestrator or other custodian for all or any
                    substantial part of its property in a non-bankruptcy
                    proceeding and such proceeding shall result in the entry,
                    making or grant of any such order for appointment; and

                (c) which in either of (a) or (b) above are not dismissed within
                    60 days of the commencement of such proceedings or such
                    appointment.

         (xxxi) AMD Inc. or AMD Saxony LLC shall: voluntarily suspend
                transaction of its business, cease payment of its creditors,
                make a general assignment for the benefit of its creditors;
                apply for or institute any of the proceedings described in ss.
                21.2 (xxx) hereof, or (whether or not any such proceeding have
                been applied for or commenced) shall consent to or acquiesce in
                any such order for relief, declaration, finding or relief
                described in ss. 21.2 (xxx), or to the taking of possession by
                any such custodian described in ss. 21.2 (xxx) of all or any
                substantial part of its property, dissolve, wind-up, revoke or
                forfeit its charter (or other constituent documents) or
                liquidate itself or any substantial part of its property, or
                shall take any corporate or similar action in furtherance of any
                of the foregoing.

The Banks shall not be entitled to rely upon any of the aforesaid events if the
circumstances giving rise thereto have been remedied within ten (10) Banking
Days following receipt of written notice from the Agent. This shall not apply to
the events referred to in (i), (ii), (iii), (viii) (ix), (x), (xiii), (xiv),
(xvii), (xviii), (xx), (xxi), (xxii), (xxvi), (xxx) and (xxxi) above. The Agent
will consult with the Guarantors before terminating on the grounds of the Events
of Default referred to in (viii) and (xv) and (xxiii). Termination on the
grounds of the Event of Default referred to in (xxvi) is permitted only in
agreement with the Guarantors.

                                     ss. 22
                                Agency Provisions

22.1     The Banks have agreed to participate in the profits and risks of the
         Facilities in the form of a disclosed consortium. Any joint and several
         liability, the Banks is excluded; each Bank is liable only for the
         relevant commitment undertaken by it pursuant to ss. 2 and

                                       53



         Schedule 1. Each Bank shall immediately inform the Agent in respect of
         any breach of the Operative Documents of which it becomes aware. A
         corresponding obligation shall apply to the Agent in the performance of
         its duties pursuant to ss. 22.3.

22.2     The Agent is acting on behalf of the Banks under this Agreement. The
         Banks hereby appoint the Agent to act on their behalf as Agent in
         relation to the rights and obligations of the Banks under this
         Agreement, with exception of rights and obligations pursuant to ss. 24,
         and the other Operative Documents pursuant to the terms thereof under
         the following terms and conditions. Each of the Banks hereby
         irrevocably authorizes the Agent to give on their behalf all
         contractually binding declarations in connection with the
         implementation in this Agreement and the other Operative Documents and
         to pursue their rights and obligations in accordance therewith. The
         Agent shall be exempted from the restrictions of ss. 181 BGB. The Agent
         shall be authorized to delegate authority to entities within its group
         or to persons subject to a professional duty of confidence and revoke
         the same free from any restrictions pursuant to ss. 181 BGB. Dresdner
         Bank AG shall in its capacity as house bank pursuant to the Subsidy
         Agreements, exercise its rights thereunder exclusively in accordance
         with the terms of such agreements.

22.3     In addition, the Agent shall have the following duties:

22.3.1   verification of satisfaction of the conditions precedent pursuant to
         ss. 5.

22.3.2   negotiations with AMD Saxonia, the Sponsors, AMD Saxony LLC and AMD
         Admin as well as changes and additions to this Agreement and the other
         Operative Documents including any changes to the method of payment;

22.3.3   prompt circulation to the Banks of Drawdown Notices submitted by AMD
         Saxonia to the Agent (together with confirmation from the Agent that it
         has received the documents to be furnished pursuant to ss. 4.1.1 (i) -
         (iii) and ss. 4.1.2 (i) - (iii), as the case may be), as well as
         circulation to each of the Banks of the documents to be furnished by
         AMD Saxonia or in individual cases, required by the Banks or any of
         them pursuant to ss. 16 and other information which is required to be
         circulated to all the Banks in accordance with the terms of this
         Agreement or the Operative Documents;

22.3.4   prompt notification of the Banks of all material circumstances coming
         to the attention of the Agent in connection with the implementation of
         this Agreement which affect the enforcement of the rights of all or any
         of the Banks such as in particular the occurrence of an event pursuant
         to ss. 21;

22.3.5   distribution of all requisite information in connection with the 65/35
         Guaranty to the Guarantors and consultation with them;

22.3.6   the convening and conduct of meetings of the Banks;

22.3.7   implementation of resolutions of the Banks;

                                       54



22.3.8   monitoring of compliance with the provisions of this Agreement and the
         other Operative Documents without prejudice to the obligations of the
         Banks pursuant to ss. 22.1, sentence 3;

22.3.9   instruction of, and consultation with, the Technical Advisor, the
         Insurance Advisor, the Banks' Auditor and other advisors, for example
         lawyers.

22.4     If the Agent issues a material instruction within the meaning of ss.
         22.3.4 each Bank, including the Agent, shall be entitled to require the
         convening of a meeting of the consortium. In addition, a meeting of the
         consortium can be required at any time by 25% of the votes of the
         Banks. Convening of the meeting shall be made in writing, by telex or
         by fax, setting out the agenda and subject to five (5) Banking Days
         notice or in urgent cases with such notice as is appropriate to the
         urgency of the matter. Meetings shall take place in Frankfurt am Main
         or such other location as is mutually agreed. Resolutions may be passed
         by way of written resolution if in the Agent's opinion, given the
         nature of the matter to be determined, a written resolution is
         appropriate and the Banks do not decline a written resolution procedure
         pursuant to the majority of Banks (in accordance with ss. 22.6).

22.5     Each Bank shall have voting rights corresponding to the amounts drawn
         under the commitments made available by it, or if the Facilities have
         not been drawn, corresponding to its respective commitment pursuant to
         ss. 2.1 and Schedule 1. Only those Banks represented in meetings -
         including Banks authorized by written proxy on behalf of other Banks -
         shall be entitled to vote. In respect of written resolutions, account
         shall be taken only of those votes of the Banks whose written response
         to the matter to be voted on has been received before the expiry five
         (5) Banking Days after dispatch of the resolutions by the Agent and
         whether received as an original or by telex or telefax. Abstentions
         will not be counted. Resolutions shall be binding on the Agent as
         between the members of the consortium inter se.

22.6     Resolutions of the Banks relating to amendments to the provisions of
         this ss. 22, changes of the amounts due to the Banks pursuant to the
         provisions of this Agreement or any other Operative Agreement, or any
         amendment to the due date relating to payment obligations of AMD
         Saxonia, the release of the land charge referred to in ss. 8.1.6 or the
         waiver - in whole or in part - of rights under the 65/35 Guaranty
         require the consent of all the Banks. Resolutions relating to the
         termination, in whole or in part of this Agreement or the commencement
         of legal proceedings or administration, composition or insolvency
         proceedings against AMD Saxonia, AMD Holding, AMD Admin, AMD Saxony LLC
         or AMD Inc. or to changes to the Security Documents or the payment
         obligations of the Sponsors pursuant to the terms of the Sponsors'
         Support Agreement or the release and realization of securities (other
         than referred to in the first sentence of this clause) require a
         majority of 75% of the votes of the Banks. In addition a majority of
         75% of votes of the Banks is required for resolutions which concern:

         (i)  a decision of the Banks pursuant to ss. 21;

                                       55





         (ii)   the consent of the Banks to any change of the AMD Saxonia Wafer
                Purchase Agreement, the AMD Holding Wafer Purchase Agreement,
                the AMD Saxonia Research, Design and Development Agreement
                (Schedule 36), the AMD Holding Research, Design and Development
                Agreement (Schedule 34), the Management Service Agreement
                (Schedule 37) and the License Agreement (Schedule 38);

         (iii)  the consent of the Banks to any change of the Project Budget or
                the Project Schedule or the Drawdown Schedule;

         (iv)   a change in the Technical Advisor, the Insurance Advisor, the
                Auditor, the Banks' Auditor or any other advisor of the Banks,
                and

         (v)    a waiver of any of the conditions to drawing.

         Otherwise, resolutions shall be passed with a majority of the votes of
         the Banks; this applies in particular to resolutions which concern the
         consent of the Banks pursuant to ss. 20 or the approval of the Plans
         and Specifications or any changes thereto.

22.7     The Agent undertakes to consult with the other Banks prior to taking
         any material decisions or steps pursuant to the terms of this
         Agreement. At the request of the Banks, the Agent undertakes to furnish
         further information in respect of particular issues and to obtain such
         information from the AMD Companies pursuant to ss. 16.4 of this
         Agreement or the provisions of the Operative Documents. In urgent
         cases, the Agent may make determinations within the proper exercise of
         its discretion without obtaining a resolution of the Banks. In such
         case, the Agent will immediately inform the other Banks of the measures
         taken by it. To the extent that the relevant measures can be revoked
         and the Banks pass a resolution for such revocation, the Agent shall
         undertake all steps to revoke the measures taken by it.

22.8     Each of the Banks (including the Agent) shall comply with its
         obligations under this Agreement and under the other Operative
         Documents with the customary care and attention pursuant to ss. 347
         HGB. The Agent shall not assume any additional liability in particular
         with reference to the legality, enforceability or value of the claims
         of the Banks and all the security. Without prejudice to its other
         obligations pursuant to this Agreement, the Agent is not obliged on its
         own volition to undertake inquiries or investigations with respect to
         breaches of this Agreement or as to the existence of any grounds for
         termination.

22.9     Each of the other Banks agrees to hold harmless and indemnify the Agent
         in respect of all claims or obligations which arise or are asserted
         against the Agent in the implementation of this Agreement save to the
         extent the same arise from the Agent's gross negligence or wilful
         default and to compensate it for expenses incurred and not otherwise
         reimbursed. The amount of the indemnity and/or the obligation to
         compensate costs shall correspond to the commitments of each of the
         Banks in respect of the Facilities. Costs will be paid to the Agent on
         first demand in proportion of the commitments of the other Banks.

22.10    Each Bank confirms that it has independently verified the
         creditworthiness of AMD Saxonia and the Sponsors and all Operative
         Documents and all other documents relating

                                       56



         thereto in all respects and independently. If any Bank is of the
         opinion that the documents made available to it in connection with the
         Operative Documents do not comply with the contractual requirements
         such Bank shall be obliged to inform the Agent immediately thereof.

22.11    The Agent is entitled, on giving 60 days' notice, to transfer its
         rights and obligations as Agent to the Paying Agent. Resignation by the
         Agent from its role as Agent is possible only subject to 60 days'
         notice. If the Banks have not passed a resolution with the required
         majority (according to ss. 22.6) by the seventh Banking Day before the
         end of this period, the Agent shall appoint as its successor a Bank
         resident in Germany. The Agent may be dismissed with a majority of at
         least 75% of the votes of all the Banks. It shall be a condition of the
         Agent's dismissal that the function of the house bank within the
         meaning of the Subsidy Agreement and the function of the Paying Agent
         is assumed by another bank or financial institution. The Banks will
         consult with AMD Saxonia in advance in respect of any change in the
         Agent.

                                    ss. 23
                           Administration of Security

23.1     The Banks hereby irrevocably authorize the Security Agent, free from
         the restrictions pursuant to ss. 181 BGB, to enter into all agreements
         necessary for the granting of the accessory security. Without prejudice
         to the restrictions governing the relationship of the members of the
         Bank consortium inter se the Security Agent is further authorized to
         enter into all necessary agreements for the granting of security
         pursuant to ss. 8 in their name, to amend and to supplement the same
         and to exercise all rights of control, administration and disposition
         arising under the Security Documents also in relation to the accessory
         security in its own name and free from the restrictions set out in ss.
         181 BGB. As between the Banks (internally), a resolution passed with a
         majority of 75% of the votes of the Banks shall be required in respect
         of the release of any security, whether in whole or in part save to the
         extent unanimity is required pursuant to ss. 22.6. The Security Agent
         shall be released from all restrictions pursuant to ss. 181 BGB in
         connection with all action taken in respect of the security.

23.2     The Security Agent shall be authorized to delegate administration of
         the security to another financial institution and to undertake all
         steps in relation thereto in the name of the other Banks. The
         provisions of this ss. 23 shall apply in their entirety to any
         successor of the Security Agent. The Security Agent shall be liable to
         the other Banks only for the exercise of due care and attention in the
         selection of a successor. The Security Agent will inform AMD Saxonia
         and the Banks in writing prior to any transfer of its administrative
         duties and consult with AMD Saxonia and the Banks concerning the
         transfer of such duties. The Security Agent can be dismissed by way of
         resolution passed with a majority of 75% of the votes of the Banks
         provided that steps are taken to ensure that the administration of the
         security is assumed by another bank or financial institution.

23.3     Each Bank shall be entitled at any time to require information from the
         Security Agent relating to the administration of the security. Without
         prejudice thereto, the Security Agent shall in any event keep the other
         Banks informed thereof in accordance with the

                                       57



         proper exercise of its discretion. In addition, the provisions of the
         German Civil Code relating to the relationship of agents (ss.ss. 662 et
         seq. BGB) shall apply to the relationship between the Security Agent
         and the other Banks.

23.4     The Security Agent shall not be liable or responsible for the validity
         and enforceability of the Security Documents nor shall the Security
         Agent assume any liability as to whether the relevant status of the
         security is sufficient to secure the claims of the Banks under this
         Agreement. In this context, each Bank shall be responsible for
         examining the documentation delivered to it and shall inform the
         Security Agent of any concerns it may have so that any such concerns
         may be taken account of by a mutually acceptable arrangement.

23.5     The Security Agent will perform its obligations in relation to the
         administration of the security with the customary standard of care in
         accordance with ss. 347 HGB. The Security Agent shall not bear any
         liability in respect of possible shortfalls which may arise as a result
         of a breach of their obligations by any of the obligors under the
         Security Documents. Each Bank hereby agrees to indemnify and keep
         harmless the Security Agent with respect to all claims which may arise
         or be made against the Security Agent arising from the proper
         acceptance and administration of the security, save to the extent the
         same arise from the Security Agent's gross negligence or wilful default
         and to indemnify the Security Agent in respect of any costs incurred by
         it and not otherwise reimbursed, in each case in proportion in which
         the individual commitments of the relevant Banks bear to the
         Facilities. The Security Agent shall be reimbursed for all costs on
         first demand in accordance with the commitments of the Banks.

23.6     Realization of the security granted pursuant to the Operative Documents
         shall be effected to the extent such security is non-accessory security
         by the Security Agent in its own name but for the account of the Banks.
         The Security Agent is hereby authorized to realize the accessory
         security in its own name and in the name and on behalf of the other
         Banks.

23.7     The Banks shall agree by way of resolution passed with a majority of
         75% of their votes on measures to implement any realization of the
         security. However, in urgent cases the Security Agent may make such
         decisions unilaterally in accordance with the proper exercise of its
         discretion; in such event, the Security Agent will immediately inform
         the other Banks of the steps taken. In the event that unanimity is not
         be achieved, the Banks will determine the relevant steps to be taken
         for realization by way of majority decision (in accordance with ss.
         22.6). In all other respects, the conditions for or procedure of
         realization of security shall be as set out in the individual Security
         Documents.

23.8     Proceeds from the realization of security shall be distributed in the
         following order of priority:

         (i)   in satisfaction of the costs and other expenses of the Agent,
               including any taxes incurred by the Agent in the administration
               and realization of the security pursuant to its obligations
               hereunder;

                                       58





         (ii)  in payment of accrued interest; and

         (iii) in payment of the claims of the Banks under the Facilities in
               accordance with this Agreement, and in satisfaction of any other
               claims of the Banks under or in connection with the Operative
               Documents pro rata in accordance with the outstanding advances of
               the Banks.

         The Guarantors shall, without prejudice to the first right of
         satisfaction in favor of the Banks as security for their shortfall
         risk, be subrogated by operation of law to the relevant portion of the
         guaranteed claims which is secured pro rata by the security granted in
         respect thereof. To the extent the security does not pass to the
         Guarantors by operation of law, the same shall be transferred pro rata
         to the Guarantors following payment by them.

         Any remaining amount not otherwise required out of the proceeds of
         realization of the security shall be paid to AMD Saxonia.

         Subject to the consent of the Guarantors, the Banks shall be entitled
         to amend the above order of distribution at any time.

23.9     AMD Saxonia has agreed to pay to the Security Agent a fee in respect of
         the administration of the security by it in an amount and on terms as
         to payment set out in a letter of even date between AMD Saxonia and the
         Security Agent.

                                     ss. 24
                                  Paying Agent

24.1     The Paying Agent is hereby appointed with the duties of the Paying
         Agent in respect of all rights and obligations of the Banks under this
         Agreement and the other Operative Documents subject to the following
         terms and conditions. The Banks hereby irrevocably appoint the Paying
         Agent to do all acts and things in connection with the making of
         payments under this Agreement and the other Operative Documents and to
         give all necessary statements and declarations in their name and to
         enforce and undertake all things on their behalf to the extent the same
         have not been delegated to the Agent. The Paying Agent is exempted from
         the restrictions of ss. 181 BGB. The Paying Agent is authorized to
         delegate authority and to revoke the same free from the restrictions of
         ss. 181 BGB.

24.2     The Paying Agent will exercise the standard of care customary in
         commercial relations in accordance with ss. 347 HGB in the performance
         of its obligations under this Agreement and the other Operative
         Documents.

24.3     The Banks hereby undertake to make available the relevant amounts of
         advances to be made available by them as requested by the Paying Agent
         in accordance with ss. 4 by 11.00 a.m. (London time) at the latest on
         the drawdown date and make the same available to the account notified
         to them by the Paying Agent. The Paying Agent will make available to
         AMD Saxonia the amounts so provided with value for the same day.

                                       59



24.4     The Paying Agent will pay to the Banks all interest, payments of
         principal and other payments due to the Banks pursuant to this
         Agreement on the relevant due date and to the accounts notified to the
         Paying Agent by individual Banks. To the extent that amounts are paid
         to the Banks without the Paying Agent having received a corresponding
         payment in full from AMD Saxonia on the same day, the Paying Agent may
         debit the relevant Bank accordingly.

24.5     AMD Saxonia shall pay to the Paying Agent in respect of the performance
         of its duties under this Agreement a fee, the amount and the terms as
         to payment of which are set out in a letter of even date from the
         Paying Agent to AMD Saxonia.

24.6     The Banks hereby undertake to hold harmless and to indemnify the Paying
         Agent against all claims which may arise or be made against the Paying
         Agent in connection with the performance of its duties under this
         Agreement, save to the extent the same arise from the Paying Agent's
         gross negligence or wilful default and to reimburse all expenses borne
         by the Paying Agent and not otherwise reimbursed. Each Bank shall
         indemnify the Paying Agent and reimburse costs in an amount equal to
         the commitment of the relevant Bank under the Facilities. All costs
         shall be payable to the Paying Agent on first demand and in accordance
         with the commitments of the Banks.

24.7     The Paying Agent may resign on 60 days' notice. If no resolution of the
         Banks has been passed by the seventh Banking Day before the expiry of
         such notice period in respect of a successor to the Paying Agent with
         the required majority (in accordance with ss. 22.6) the Paying Agent
         shall be entitled to appoint as its successor a credit institute
         domiciled in Germany or Luxembourg. The Paying Agent can be dismissed
         by way of resolution passed with a majority of 75% of the votes of the
         Banks provided that steps are taken to ensure that the administration
         of the security is assumed by another bank or financial institution.

24.8     The department of the Paying Agent shall, with regard to the assumption
         of the paying agent's duties for the Banks, be regarded as a entity
         separate from the Paying Agent's other departments.

                                     ss. 25
                                      Costs

25.1     AMD Saxonia shall bear all expenses, fees and other external costs
         incurred by the Agent, the Paying Agent and the Security Agent in
         connection with the preparation, amendment and implementation of the
         Operative Documents and the granting of the security and/or perfection
         including in particular the reasonable costs of the Technical Advisor,
         the Insurance Advisor and the Banks' Auditor and the reasonable fees,
         costs and expenses of auditors and lawyers instructed by the Agent in
         connection with the verification, valuation, administration and
         realization of the security or otherwise in connection with the
         Operative Documents. AMD Saxonia's obligations to reimburse costs shall
         also remain unaffected in those cases in which the Banks have paid the
         costs of the parties referred to above pursuant to such Banks'
         obligations to indemnify or otherwise reimburse such costs.

                                       60



25.2     In the event of any payment received by a Bank either as a result of
         set off by such Bank or by AMD Saxonia or as a result of any other
         performance by AMD Saxonia as a result of which such Bank's claims are
         paid in excess of the proportion due to it in respect of its
         commitments in ss. 2 and Schedule 1, such Bank shall be obliged to make
         a payment to the Paying Agent for the account of the other Banks such
         as to place such other Banks in the position they would have been in
         had they received payment in proportion to their Commitments pursuant
         to ss. 2 and Schedule 1. To the extent any Bank pays such excess amount
         to the other Banks, such Bank shall have a claim against AMD Saxonia in
         an amount equal to the excess. This provision shall apply to any
         payment received from or on account of AMD Saxonia. This provision does
         not, however, apply in favor of a Bank which declined to participate in
         proceedings initiated by the other Banks which have led to successful
         claims being made under the Operative Documents. If any Bank is obliged
         to repay to AMD Saxonia any amount received from any of the other
         Banks, the other Banks shall be obliged to repay the amounts received
         by them to the Bank obliged to repay.

                                     ss. 26
                         Assignment; Sub-participations

26.1     The Banks are not entitled prior to 1 July 2001 to assign, whether in
         whole or in part, their rights under this Agreement. Assignments and
         sub-participations to affiliated companies within the meaning of ss. 15
         of the Stock Corporation Act are permitted at any time - to the extent
         not made by a Bank in Germany to an enterprise outside Germany - as
         well as assignments to third parties following termination of this
         Agreement. After 1 July 2001, the Banks are entitled to assign their
         rights and claims under this Agreement with the consent of AMD Saxonia
         and the Agent, which consent may be withheld only for good cause. Each
         Bank is entitled moreover at any time to grant sub-participations to
         other banks or credit institutions in an amount up to 50% of its
         respective commitment on and subject to the following terms and
         conditions:

         (i)    sub-participations require the consent of AMD Saxonia and the
                Agent. Consent may be withheld only for good cause;

         (ii)   the sub-participant shall not be granted rights as against AMD
                Saxonia or as against the other Banks and no contractual
                relationship between the sub-participant, AMD Saxonia or the
                other Banks shall be permitted to exist;

         (iii)  implementation of this Agreement shall be effected exclusively
                as between AMD Saxonia, the Agent and the Paying Agent and/or
                the relevant Bank.

                                     ss. 27
                                  Miscellaneous

27.1     The failure by any of the Banks to exercise any of their rights
         hereunder, (whether in whole or in part), in particular any failure to
         exercise their right to terminate this Agreement, shall not constitute
         a waiver by the Banks of such right nor shall they be estopped from
         doing so. All rights pursuant to this Agreement shall have effect

                                       61



       individually and without prejudice to any other rights at law or under
       contract in favor the Banks.

27.2   All amendments and supplements to this Agreement and the other Operative
       Documents must be in writing unless they are required by law to be
       notarially certified. This requirement shall apply also to any
       amendments, release or waiver of the requirement for such written form as
       well as all consents of the Banks contemplated under this Agreement.

27.3   The provisions of ss. 22 to 24 and all rights and duties relating thereto
       may be amended without the consent of AMD Saxonia this shall not apply to
       the provisions set out in the last sentence of each of ss. 22.11 and
       ss. 23.2.

27.4   The invalidity or unenforceability of one or more provisions of this
       Agreement shall not affect the remaining provisions of this Agreement.
       The invalid or unenforceable provision shall be substituted by a
       provision which approximates most closely to the economic purpose of the
       void or unenforceable provision.

27.5   AMD Saxonia shall not be entitled to assign its rights under this
       Agreement to any third party or to dispose of such rights in any other
       way without the prior written consent of the Banks.

27.6   Each of the Banks shall inform the Agent with a copy to the Paying Agent
       at least five (5) Banking Days prior to any change in its Lending Office.

27.7   All correspondence or notifications under in connection with this
       Agreement shall be served personally at the following addresses (or such
       other address notified in writing by the recipient to the other party) or
       by registered letter, courier or fax:

       to the Agent and Paying Agent:

             Dresdner Bank Luxembourg S.A.
             26, rue due Marche-aux-Herbes
             L-2097 Luxembourg
             Attention:     Agencies
             Facsimile No.: (352) 4760 43222

       to the Banks:

             Dresdner Bank AG
             Ostra Allee 9
             01067 Dresden
             Attention:     Herrn Hans-Jurgen Hansen/Frau Heike Wetzel
             Facsimile No.: (49) 351 489 1300

                                       62



                  Kreditanstalt fur Wiederaufbau
                  Palmengartenstrasse 5 - 9
                  60325 Frankfurt am Main
                  Attention:     Herrn Ulrich Goretzki/Herrn Michael Andres
                  Facsimile No.: (49) 69 74 31 2016

                  DZ BANK AG Deutsche Zentral-Genossenschaftsbank
                  Am Platz der Republik
                  60265 Frankfurt am Main
                  Attention:     Herrn Lothar Ferber-Hammeke/Frau Ute Suffrian
                  Facsimile No.: (49) 69 7447 6098

                  Landesbank Baden-Wurttemberg
                  Friedrichstr. 24
                  70144 Stuttgart
                  Attention:     Herrn Steffen Franz
                  Facsimile No.: (49) 711 122 4814

                  Landesbank Sachsen
                  Girozentrale
                  Humboldtstr. 25
                  04105 Leipzig
                  Attention:     Herrn Tino Petzold/Herrn Matthias Muller
                  Facsimile No.: (49) 341 97 93 139

                  Bayerische Landesbank
                  Girozentrale
                  Briennerstrasse 20
                  80333 Munchen
                  Attention:     Frau Birgit Stuper
                  Facsimile No.: (49) 89 2171 23334

                  HVB Banque Luxembourg Societe Anonyme
                  4, rue Alphonse Weicker
                  L-2099 Luxembourg
                  Attention:     Frau Birgit Heincke/Frau Tessie Schuller
                  Facsimile No.: (352) 4272 4510

                  BHF-BANK Aktiengesellschaft
                  Filiale Leipzig
                  Kathe-Kollwitz-Str. 52
                  04109 Leipzig
                  Attention:     Herrn Berthold Ambrosch/Frau Peggy Kuhnast
                  Facsimile No.: (49) 341 4654 150

                                       63



                  Commerzbank Aktiengesellschaft
                  Filiale Dresden
                  Devrient Strasse 3
                  01067 Dresden
                  Attention:     Herrn Christoph Hense/Herrn Frank Schulz
                  Facsimile No.: (49) 351 484 9111

                  Deutsche Postbank AG Bonn
                  Friedrich-Ebert-Allee 114-126
                  53113 Bonn
                  Attention:     Herrn Wolfgang Muller/Herrn Torsten Werner
                  Facsimile No.: (49) 228 920 23308

                  Hamburgische Landesbank
                  - Girozentrale -
                  Gerhard-Hauptmann-Platz 50
                  20095 Hamburg
                  Attention:     Herrn Hermann Nordmann
                  Facsimile No.: (49) 40 3333 3037

                  IKB Deutsche Industriebank AG
                  Wilhelm-Botzkes-Strasse 1
                  40474 Dusseldorf
                  Attention:     Herrn Jorg Hillmann, Telefax: 0211-8221-2256
                                 Frau Katharina van der Sant, Telefax:
                                 0211-8221-2020

                  Landesbank Rheinland-Pfalz
                  - Girozentrale -
                  Grosse Bleiche 54 - 56
                  55098 Mainz
                  Attention:     Herrn Lothar Ayasse/Herrn Daniel Juncker
                  Facsimile No.: (49) 6131 13 3511/-2599

                  ABN AMRO Bank (Deutschland) AG
                  Mainzer Landstr. 65
                  60329 Frankfurt/Main
                  Attention:     Frau Hiltraud Dillmann
                  Facsimile No.: (49) 69 2690 2109

                  Creditanstalt AG
                  Schottengasse 6
                  A-1090 Wien
                  Attention:     Herrn Dr. Martin Frank/Frau Andrea Schein
                  Facsimile No.: (43) 1 53131 44209/71191 50730

                                       64



                  The Sumitomo Mitsui Banking Corporation, Dusseldorf Branch
                  Prinzenallee 7
                  40549 Dusseldorf
                  Attention:     Herrn Thomas Senk
                  Facsimile No.: (49) 211 3619 277

                  Bayerische Hypo- und Vereinsbank AG, Munchen
                  Sederanger 4
                  80538 Munchen
                  Attention:     Frau Renate Bergler/Frau Sabine Vollmering
                  Facsimile No.: (49) 89 378 21801

       to AMD Saxonia:

                  AMD Saxony Manufacturing GmbH
                  Wilschdorfer Landstrasse 101
                  01109 Dresden
                  Attention:     Dr. Tillmann Blaschke
                  Facsimile No:  (49) 351 277 91 300

       to the Security Agent:

                  DRESDNER BANK AG
                  Ostra Allee 9
                  01067 Dresden
                  z. Hd.:        Herrn Hans-Jurgen Hansen/Frau Heike Wetzel
                  Facsimile No.: (49) 351 489 1300

27.8   The German language counterpart of this Agreement is binding.

27.9   To the extent this Agreement does not provide to the contrary this
       Agreement shall be governed by the General Terms and Conditions of the
       Agent set out in Schedule 62, save that all references to a "Bank" shall
       be deemed to be references to the "Banks" within the meaning of this
       Agreement and all references to a "customer" shall be deemed to be
       references to AMD Saxonia.

27.10  All press statements or other announcements relating to this Agreement
       shall require the prior written consent of the Agent which consent shall
       not be unreasonably withheld. The withholding of consent by the Agent
       shall be deemed to be unreasonable to the extent that the disclosure of
       information relating to this Agreement is required by any law, regulation
       or official requirement or as required by any recognized securities
       supervisory authority or securities exchange.

                                      ss. 28
                                  Governing Law

       This Agreement shall be governed by the law of the Federal Republic of
       Germany.

                                       65



                                     ss. 29

                                  Jurisdiction

The courts of Frankfurt am Main shall have exclusive jurisdiction in respect of
the resolution of all disputes under or in connection with this Agreement.

Frankfurt am Main 11 March 1997

AMD SAXONY MANUFACTURING GMBH
(proposed to be renamed "AMD Saxony LLC & Co KG")

_______________________________


DRESDNER BANK AG
(as Security Agent and Bank)

_______________________________


Other Banks:

KREDITANSTALT FUR WIEDERAUFBAU

_______________________________

_______________________________


DZ BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK

_______________________________

_______________________________


LANDESBANK BADEN-WURTTEMBERG

_______________________________

_______________________________

                                       66



LANDESBANK SACHSEN GIROZENTRALE

_______________________________

_______________________________


BAYERISCHE LANDESBANK GIROZENTRALE

_______________________________

_______________________________


HVB BANQUE LUXEMBOURG SOCIETE ANONYME

_______________________________

_______________________________


BHF-BANK AKTIENGESELLSCHAFT

_______________________________

_______________________________

COMMERZBANK AKTIENGESELLSCHAFT, Dresden Branch

_______________________________

_______________________________


DEUTSCHE POSTBANK AG BONN

_______________________________

_______________________________

                                       67



HAMBURGISCHE LANDESBANK - GIROZENTRALE -

_______________________________

_______________________________


IKB DEUTSCHE INDUSTRIEBANK AG

_______________________________

_______________________________


LANDESBANK RHEINLAND-PFALZ - GIROZENTRALE -

_______________________________

_______________________________


ABN AMRO BANK (DEUTSCHLAND) AG, Frankfurt

_______________________________

_______________________________


CREDITANSTALT AG, Wien

_______________________________

_______________________________


THE SUMITOMO MITSUI BANKING CORPORATION, Dusseldorf Branch

_______________________________

_______________________________

                                       68



BAYERISCHE HYPO- UND VEREINSBANK AG, Munchen

_______________________________

_______________________________


DRESDNER BANK LUXEMBOURG S.A.
(as Agent and Paying Agent)

_______________________________

_______________________________

                                       69



                                   Schedule 1

                               Banks' Commitments

          The Banks and their Lending Offices                       Commitments

                                                                         DM

DRESDNER BANK AG,
Dresden ........................................................  190,909,090.91

KREDITANSTALT FUR WIEDERAUFBAU,
Frankfurt am Main ..............................................  186,363,636.36

LANDESBANK BADEN-WURTTEMBERG,
Stuttgart ......................................................  181,818,181.82

LANDESBANK SACHSEN - GIROZENTRALE -,
Leipzig ........................................................  100,000,000.00

BAYERISCHE LANDESBANK - GIROZENTRALE -,
Munchen ........................................................   90,909,090.91

HVB BANQUE LUXEMBOURG SOCIETE ANONYME,
Luxembourg .....................................................   90,909,090.91

DZ BANK AG DEUTSCHE ZENTRAL- GENOSSENSCHAFTSBANK,
Frankfurt am Main ..............................................   86,363,636.36

THE SUMITOMO BANK MITSUI BANKING CORPORATION,
Niederlassung Dusseldorf, Dusseldorf ...........................   72,727,272.73

BHF-BANK AKTIENGESELLSCHAFT,
Leipzig ........................................................   68,181,818.18

COMMERZBANK AKTIENGESELLSCHAFT Filiale Dresden,
Dresden ........................................................   68,181,818.18

DEUTSCHE POSTBANK AG Bonn
Bonn ...........................................................   68,181,818.18

HAMBURGISCHE LANDESBANK - GIROZENTRALE -,
Hamburg ........................................................   68,181,818.18

IKB DEUTSCHE INDUSTRIEBANK AG,
Dusseldorf .....................................................   68,181,818.18

LANDESBANK RHEINLAND-PFALZ - GIROZENTRALE -,
Mainz ..........................................................   68,181,818.18

ABN AMRO BANK (DEUTSCHLAND) AG,
Berlin .........................................................   45,454,545.46

CREDITANSTALT AG,
Wien ...........................................................   31,818,181.82

                                 SCHEDULE 63-1



          The Banks and their Lending Offices                       Commitments

BAYERISCHE HYPO- UND VEREINSBANK AG,
Munchen ......................................................     13,636,363.64
                                                                ----------------
                                                                1,500,000,000.00
                                                                ================

EX-10.43(F-5)

                                                              Exhibit 10.43(f-5)

                    ACCESSION AGREEMENT AND FOURTH AMENDMENT
                         TO SPONSORS' SUPPORT AGREEMENT

         *** Confidential treatment has been requested as to certain portions of
         this agreement. Such omitted confidential information has been
         designated by an asterisk and has been filed separately with the
         Securities and Exchange Act of 1934, as amended, and the Commission's
         rules and regulations promulgated under the Freedom of Information Act,
         pursuant to a request for confidential treatment. ***

                  THIS ACCESSION AGREEMENT AND FOURTH AMENDMENT (this
"Amendment"), dated 3 June 2002, is made among ADVANCED MICRO DEVICES, INC., a
corporation organised and existing under the laws of the State of Delaware,
United States of America, with its chief executive office and principal place of
business at One AMD Place, Sunnyvale, California 94088, United States of America
("AMD Inc."); AMD SAXONY HOLDING GMBH, Dresden, registered in the Commercial
Register of the Dresden County Court, HRB 13931 ("AMD Holding," and, together
with AMD Inc., the "Sponsors"); AMD SAXONY LLC, a limited liability company
organised and existing under the laws of the State of Delaware, United States of
America ("AMD Saxony LLC"); AMD SAXONY ADMIN GmbH, with its seat in Dresden
("AMD Admin," and together with AMD SAXONY LLC, the "Additional Partner
Companies"); DRESDNER BANK LUXEMBOURG S.A., as Agent (and successor to Dresdner
Bank AG ("Dresdner") in such capacity) under the Loan Agreement dated 11 March
1997, as amended (as so amended, the "Loan Agreement") (in such capacity, the
"Agent") for the Banks from time to time party thereto; and DRESDNER, as
Security Agent under such Loan Agreement (in such capacity, the "Security
Agent"); for the Secured Parties referred to therein.

                              W I T N E S S E T H:

                  WHEREAS, AMD Saxony Manufacturing GmbH, Dresden (proposed to
be known as "AMD Saxony LLC & Co. KG" following the Conversion Effective Date),
registered in the Commercial Register of the Dresden County Court ("AMD
Saxonia"), has been formed for the purpose of constructing, owning, and
operating (i) the Plant and (ii) the integrated Design Center (the construction,
ownership, and operation of the Plant and the Design Center being hereinafter
called the "Project");

                  WHEREAS, pursuant to the Conversion Documents, AMD Saxonia
proposes to change its legal form to a Kommanditgesellschaft (a limited
partnership organized under the laws of the Federal Republic of Germany), with
AMD Holding and AMD Admin as its sole limited partners (Kommanditisten) and AMD
Saxony LLC as its sole general partner (Komplementar) (the "Conversion");

                  WHEREAS, upon the Conversion Effective Date, AMD Saxonia
wishes, with the consent of the Sponsors and the Additional Partner Companies
to, among other things, modify the interest rate on Sponsors' Loans and
Revolving Loans and to increase the amount of the Revolving Loan Facility; and



                  WHEREAS, with effect from the Conversion Effective Date, the
Additional Partner Companies desire to accede to, and the Sponsors, the
Additional Partner Companies, the Agent and the Security Agent desire to amend
and supplement, the Sponsors' Support Agreement dated 11 March 1997 by and among
AMD Inc., AMD Saxony Holding GmbH, Dresdner Bank AG, as Security Agent, and
Dresdner Bank Luxembourg S.A., as Agent, as amended by the First Amendment to
Sponsors' Support Agreement dated 6 February 1998, the Second Amendment to
Sponsors' Support Agreement dated 29 June 1999, and the Third Amendment to
Sponsors' Support Agreement dated 20 February 2001 (as amended, the "Sponsors'
Support Agreement"), on the terms and subject to the conditions of this
Amendment;

                  NOW, THEREFORE, the Sponsors, the Additional Partner
Companies, the Agent (for itself and on behalf of the Banks), and the Security
Agent (on behalf of the Secured Parties), agree as follows:

                                    ARTICLE I
                                    Accession

Section 1.1       With effect from the Conversion Effective Date, the Additional
Partner Companies hereby accede to the Sponsors' Support Agreement and AMD Inc.,
AMD Holding, the Agent and the Security Agent hereby consent to such accession.

                                   ARTICLE II
                                   Definitions

Section 2.1       Definitions. Capitalized terms not otherwise defined in this
Amendment are used with the definitions assigned to them in the Sponsors'
Support Agreement.

                  In addition, the following term when used in this Amendment
shall have the following meaning:

        "Agreed Terms" means, in respect of any document, that document
        substantially in the form thereof which has been initialled (for the
        purposes of identification) by or on behalf of AMD Saxonia and the
        Agent.

        "Conversion Documents": means the following agreements and documents,
        each in the Agreed Terms: (i) the Certificate of Formation of AMD
        Saxony LLC; (ii) the AMD Admin Articles of Association; (iii) the
        Formation Protocol for AMD Admin; (iv) the Application to the
        Commercial Register for Formation of AMD Admin; (v) the Resolution of
        AMD Holding as Shareholder of AMD Admin for Section 181 German Civil
        Code Release; (vi) the List of Shareholders for AMD Admin; (vii) the
        AMD Saxony LLC Agreement; (viii) the Partnership Agreement of AMD
        Saxony LLC & Co. KG; (ix) the Assignment and Trust Agreement between
        AMD Holding and AMD Saxony LLC; (x) the Purchase and Assignment
        Agreement between AMD Holding and AMD Admin; (xi) the Resolution of AMD
        Holding as Shareholder of AMD Saxonia for Transfer of Fractional Share
        to AMD Saxony LLC; (xii) the Notification to AMD Saxonia of Assignment
        of Fractional Share to AMD Admin; (xiii) the List of Shareholders of
        AMD Saxonia (reflecting addition of AMD Admin); (xiv) the Resolution of
        AMD Holding and AMD Saxony LLC as Shareholders of AMD Saxonia for
        Transfer

                                       2



         of Fractional Share to AMD Admin; (xv) the Notification to AMD Saxonia
         of Assignment of Fractional Share to AMD Saxony LLC; (xvi) the List of
         Shareholders of AMD Saxonia (reflecting addition of AMD Saxony LLC);
         (xvii) the Resolution of AMD Holding, AMD Admin and AMD Saxony LLC as
         Shareholders of AMD Saxonia Approving Conversion to a Limited
         Partnership; (xviii) the Resolution of AMD Inc. as Shareholder of AMD
         Holding Approving Conversion of AMD Saxonia; (xix) Application to the
         Commercial Register for Conversion of AMD Saxonia to a Limited
         Partnership; (xx) Application to the Real Estate Register for Change in
         AMD Saxonia's Name; (xxi) the Transfer Agreement for Transfer Back Of
         Fractional Share between AMD Holding and AMD Saxony LLC; (xxii)
         Application to the Commercial Register for Transfer Back of Fractional
         Share by AMD Saxony LLC to AMD Holding; (xxiii) Power of Attorney
         regarding Removal of AMD Saxony LLC as General Partner of AMD Saxonia;
         and (xxiv) any other agreement or document designated by the AMD
         Companies (with the consent of the Agent) in addition to or in
         substitution for any of the above-named documents or agreements as a
         "Conversion Document."

         "Conversion Effective Date" means the date on which the Registration
         takes effect.

         "Limited Partnership" means a limited partnership
         (Kommanditgesellschaft) under the laws of the Federal Republic of
         Germany.

         "Registration" means the registration of the Conversion with the
         Commercial Register in Dresden.

Section 2.2 Construction. In this Amendment, unless the context requires
otherwise, references to Sections and Schedules are to Sections and Schedules of
the Sponsors' Support Agreement. Section headings are inserted for reference
only and shall be ignored in construing this Amendment.

                                   ARTICLE III
                                   Amendments

Section 3.1 With effect from the Conversion Effective Date, the Sponsors'
Support Agreement will be amended and restated in its entirety in the form
attached as Appendix A.

Section 3.2 With effect from the Conversion Effective Date, the current version
of the Disclosure Schedules shall be deleted and replaced with the new
Disclosure Schedules attached as Appendix B hereto.

                                   ARTICLE IV
                                  Miscellaneous

Section 4.1 Representations and Warranties. Each of the Sponsors, AMD Saxony LLC
and AMD Admin hereby represents and warrants, as of the date hereof and as of
the Conversion Effective Date, that:

(i)      Organisation; Corporate Power. It is duly organised and validly
existing under the laws of the jurisdiction of its organisation, and has all
necessary power and authority to execute

                                       3



and deliver this Amendment and, following the Conversion Effective Date, to
consummate the transactions contemplated by the Sponsors' Support Agreement, as
amended hereby;

(ii)  Corporate Authority; No Conflict. The execution and delivery by it of this
Amendment, and the performance by it, following the Conversion Effective Date,
of its obligations under the Sponsors' Support Agreement, as amended by this
Amendment, have been duly authorised by all necessary corporate action
(including any necessary shareholder action) on its part, and do not and will
not (i) violate any provision of any law, rule, regulation, order, writ,
judgment, injunction, decree, determination, or award presently in effect having
applicability to it, or of its charter or by-laws; or (ii) result in a breach
of, result in a mandatory prepayment or acceleration of indebtedness evidenced
by or secured by, or constitute a default under, any indenture or loan or credit
agreement, or any other agreement or instrument to which it is a party or by
which it or its properties may be bound, or require the creation or imposition
of any encumbrance of any nature upon or with respect to any of the properties
now owned or hereafter acquired by it; and

(iii) Valid and Binding Obligations. Following the Conversion Effective Date,
the Sponsors' Support Agreement, as amended by this Amendment, shall constitute
its legal, valid, and binding obligation, enforceable against it in accordance
with its terms; subject, however, to applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally and, as to enforceability, by general equitable principles.

Section 4.2   Miscellaneous.

(i)   This Amendment is limited as specified and, except as expressly herein
provided, shall not constitute a modification, amendment or waiver of any other
provision of the Sponsors' Support Agreement or any provision of any other
Operative Document. Except as specifically amended by this Amendment, the
Sponsors' Support Agreement shall remain in full force and effect and is hereby
ratified and confirmed.

(ii)  This Amendment shall be an Operative Document under and for purposes of
the Sponsors' Support Agreement.

(iii) This Amendment has been executed in the English language.

(iv)  This Amendment may be executed in any number of counterparts and by
different parties on separate counterparts which when taken together shall
constitute one agreement.

(v)   Sections 16.1, 16.2, and 16.3 of the Sponsors' Support Agreement shall
apply, mutatis mutandis, to this Amendment, as if set out herein in full.

              IN WITNESS WHEREOF, each of the parties set out below has
caused this Amendment to be duly executed and delivered by its respective
officer or agent thereunto duly authorised as of the date first above written.

                                       4



                             ADVANCED MICRO DEVICES, INC.

                             By:             /s/ Robert J. Rivet
                                 -----------------------------------------------
                             Its

                             AMD SAXONY HOLDING GMBH

                             By:      /s/ Dr. Hans-Raimund Deppe
                                 -----------------------------------------------
                             Dr. Hans-Raimund Deppe
                             Its Managing Director (Geschaftsfuhrer)

                             AMD SAXONY ADMIN GMBH

                             By:      /s/ Dr. Hans-Raimund Deppe
                                 -----------------------------------------------
                             Dr. Hans-Raimund Deppe
                             Its Managing Director (Geschaftsfuhrer)

                             AMD SAXONY LLC

                             By:      /s/ Dr. Hans-Raimund Deppe
                                 -----------------------------------------------
                             Dr. Hans-Raimund Deppe
                             Its Manager

                             DRESDNER BANK LUXEMBOURG S.A.,
                             as Agent

                             By:                 /s/ Prellwitz
                                 -----------------------------------------------
                             Its Signatory under power of attorney

                             DRESDNER BANK AG
                             as Security Agent

                             By:                 /s/ Prellwitz
                                 -----------------------------------------------
                             Its Signatory under power of attorney

                                       5



                                   APPENDIX A

                AMENDED AND RESTATED SPONSORS' SUPPORT AGREEMENT



                                                            Amended and Restated

                           SPONSORS' SUPPORT AGREEMENT

                               Dated 11 March 1997

          AS AMENDED ON 6 FEBRUARY 1998, 29 JUNE 1999, 20 FEBRUARY 2001

                                       AND

                                   3 JUNE 2002


                                     between


                          ADVANCED MICRO DEVICES, INC.,

                            AMD SAXONY HOLDING GMBH,

                                 AMD SAXONY LLC,

                              AMD SAXONY ADMIN GMBH

                                       and

                                DRESDNER BANK AG,
                               as Security Agent,

                                       and


                         DRESDNER BANK LUXEMBOURG S.A.,
                                    as Agent



                                     INDEX

                                                                              
ARTICLE I      Definitions and Accounting Terms ..............................   2

ARTICLE II     Contribution of Equity Capital ................................  27

ARTICLE III    Sponsors' Loans ...............................................  29

ARTICLE IV     Project Costs .................................................  34

ARTICLE V      Completion Guaranty ...........................................  35

ARTICLE VI     Subsidies Undertaking .........................................  36

ARTICLE VII    Pari Passu Undertaking ........................................  38

ARTICLE VIII   Security Documents ............................................  38

ARTICLE IX     Sponsors' Guaranty ............................................  39

ARTICLE X      Sponsors' Subordination Agreement; AMD Inc. Subordination
               Agreement .....................................................  40

ARTICLE XI     Obligations Unconditional .....................................  40

ARTICLE XII    Representations and Warranties ................................  41

ARTICLE XIII   Covenants .....................................................  58

ARTICLE XIV    Costs and Expenses; Indemnities; Taxes; Etc. ..................  76

ARTICLE XV     Miscellaneous .................................................  81

ARTICLE XVI    Governing Law, Jurisdiction, and Language .....................  84



SCHEDULE I              -  [left intentionally blank]
SCHEDULE II             -  Sponsors' Disclosure Schedule

                                       i



                           SPONSORS' SUPPORT AGREEMENT

THIS SPONSORS' SUPPORT AGREEMENT, dated 11 March 1997, as amended, is made among
ADVANCED MICRO DEVICES, INC., a corporation organized and existing under the
laws of the State of Delaware, United States of America, with its chief
executive office and principal place of business at One AMD Place, Sunnyvale,
California 94088, United States of America ("AMD Inc."), AMD SAXONY HOLDING
GMBH, Dresden, registered in the Commercial Register of the Dresden County
Court, HRB 13931 ("AMD Holding," and, together with AMD Inc., collectively, the
"Sponsors"), AMD Saxony LLC, a limited liability company organized and existing
under the laws of the State of Delaware, United States of America ("AMD Saxony
LLC"), AMD SAXONY ADMIN GMBH, with its seat in Dresden ("AMD Admin," and
together with AMD SAXONY LLC, the "Additional Partner Companies"), DRESDNER BANK
LUXEMBOURG S.A. ("Dresdner"), as Agent under the Loan Agreement referred to
below for the Banks referred to below (in such capacity, the "Agent"), and
DRESDNER BANK AG, as Security Agent under such Loan Agreement (in such capacity,
the "Security Agent") for the Secured Parties referred to below.

                              W I T N E S S E T H :
                              - - - - - - - - - -

WHEREAS, AMD Saxony Manufacturing GmbH, Dresden (proposed to be known as "AMD
Saxony LLC & Co KG" following the Conversion Effective Date), registered in the
Commercial Register of the Dresden County Court ("AMD Saxonia"), has been formed
for the purpose of constructing, owning, and operating (i) the Plant and (ii)
the integrated Design Center (the construction, ownership, and operation of the
Plant and the Design Center being hereinafter called the "Project");

WHEREAS, in order to finance the construction of the Plant and the Design
Center, and start-up costs of the operation of the Plant, (i) the Sponsors have
made, and expect to make substantial subordinated loans to, and AMD Holding has
made, and from time to time may make, substantial equity investments in, AMD
Saxonia, and (ii) AMD Saxonia has entered into a Syndicated Loan Agreement,
dated 11 March 1997, as amended (as so amended, the "Loan Agreement"), with the
banks from time to time party thereto (hereinafter collectively called the
"Banks" and individually called a "Bank"), the Agent, Dresdner, as Paying Agent
(in such capacity, the "Paying Agent"), and Dresdner Bank AG, as Security Agent,
providing, inter alia, for a senior secured term facility aggregating up to DM
1,500,000,000 (one billion five hundred million Deutsche Marks);

WHEREAS, the Sponsors desire that the Project be constructed and completed and
are entering into this Agreement with the Agent (for the benefit of itself and
the Banks) and the Security Agent (for the benefit of the Secured Parties), for
the purpose, among other things, of providing (i) certain assurances with
respect to the completion of the Project, and (ii) certain undertakings to and
for the benefit of the Secured Parties;

WHEREAS, a condition precedent to the initial Advance is, inter alia, the
execution by the Sponsors of this Agreement and, in extending credit to AMD
Saxonia under the Loan Agreement, the Banks are relying on the undertakings of
the Sponsors contained herein;



WHEREAS, pursuant to the Conversion, AMD Saxonia has changed its legal form to a
Kommanditgesellschaft (a limited partnership organized under the laws of the
Federal Republic of Germany), with AMD Holding and AMD Admin as its sole limited
partners (Kommanditisten) and AMD Saxony LLC as its sole general partner
(Komplementar); and

WHEREAS, the Additional Partner Companies have acceded to this Agreement
pursuant to the Accession Agreement and Fourth Amendment to Sponsors' Support
Agreement dated 3 June 2002;

NOW, THEREFORE, the Sponsors, the Additional Partner Companies, the Agent (for
itself and on behalf of the Banks), and the Security Agent (on behalf of the
Secured Parties), agree as follows:

                                   ARTICLE I
                        Definitions and Accounting Terms

SECTION 1.1 Definitions. Unless otherwise defined herein, the following terms
(whether or not underlined) when used in this Agreement, including its preamble
and recitals, shall, except where the context otherwise requires, have the
following meanings (such meanings to be equally applicable to the singular and
plural forms thereof):

               "Advances" means all advances that the Banks make to AMD Saxonia
pursuant to the Loan Agreement.

               "Affiliate" means, with respect to any Person, a Person which,
directly or indirectly, controls, is controlled by, or is under common control
with, such other Person; and, for purposes of this definition, the concept of
"control", with respect to any Person, signifies the possession of the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, the possession of voting
rights, by contract, or otherwise; provided, that none of the Agent, the
Security Agent, the Paying Agent, any of the Banks, nor any of their respective
Affiliates, shall be deemed to be Affiliates of (x) any AMD Company or (y) any
other Subsidiary of AMD Inc.

               "Agent" has the meaning assigned to that term in the introduction
to this Agreement.

               "Agreed Terms" means in respect of any document, the document
substantially in the form thereof which has been initialled (for the purposes of
identification) by or on behalf of AMD Saxonia and the Agent.

               "Agreement" means this Sponsors' Support Agreement, as the same
may be amended or modified in accordance with the terms hereof and in effect.

               "AMD Admin" has the meaning assigned to that term in the
introduction to this Agreement.

               "AMD Admin Global Assignment Agreement" means the AMD Admin
Global Assignment Agreement between AMD Admin and the Security Agent dated 3
June 2002.

                                       2



                  "AMD Admin Partnership Interest Pledge Agreement (AMD
Saxonia)" means the AMD Admin Partnership Interest Pledge Agreement (AMD
Saxonia) between AMD Admin and the Security Agent dated 3 June 2002.

                  "AMD Admin Pledge of Bank Accounts" means the AMD Admin Pledge
of Bank Accounts between AMD Admin and the Security Agent dated 3 June 2002.

                  "AMD Admin Security" means all collateral security furnished
pursuant to the AMD Admin Security Documents.

                  "AMD Admin Security Documents" means, collectively, the AMD
Admin Global Assignment Agreement, the AMD Admin Partnership Interest Pledge
Agreement (AMD Saxonia), the AMD Admin Pledge of Bank Accounts, and each other
instrument or document designated by the Agent (with the consent of each AMD
Company) as an AMD Admin Security Document under and for purposes of this
Agreement.

                  "AMD Companies" means AMD Saxonia, AMD Admin, AMD Holding, AMD
Saxony LLC and AMD Inc., collectively.

                  "AMD Holding" has the meaning assigned to that term in the
introduction to this Agreement.

                  "AMD Holding Assignment of Contractual Rights" means the AMD
Holding Assignment of Contractual Rights, in the form set out in Schedule 55 to
the Loan Agreement, between AMD Holding and the Security Agent.

                  "AMD Holding Assignment (U.S.A.)" means the AMD Holding
Assignment of, inter alia, rights under the Wafer Purchase Agreements, the
Sponsors' Loan Agreement, and the Revolving Loan Facility Agreement, in the form
set out in Schedule 56 to the Loan Agreement, between AMD Holding and the
Security Agent.

                  "AMD Holding Assignment of Current Assets" means the AMD
Holding Security Assignment of Current Assets, in the form set out in Schedule
52 to the Loan Agreement, between AMD Holding and the Security Agent.

                  "AMD Holding Charge of Bank Accounts" means the AMD Holding
Charge of Bank Accounts, in the form set out in Schedule 54 to the Loan
Agreement, between AMD Holding and the Security Agent.

                  "AMD Holding Global Assignment" means the AMD Holding Global
Assignment, in the form set out in Schedule 53 to the Loan Agreement, between
AMD Holding and the Security Agent.

                  "AMD Holding KG Partnership Interest Pledge Agreement (AMD
Saxonia)" means the AMD Holding KG Partnership Interest Pledge Agreement (AMD
Saxonia) between AMD Holding and the Security Agent dated 3 June 2002.

                                       3



                  "AMD Holding Research Agreement" means the AMD Holding
Research, Design and Development Agreement, in the form set out in Schedule 34
to the Loan Agreement, between AMD Inc. and AMD Holding.

                  "AMD Holding Security" means all collateral security created
pursuant to the AMD Holding Security Documents.

                  "AMD Holding Security Documents" means, collectively, the AMD
Holding Assignment (U.S.A), the AMD Holding Assignment of Contractual Rights,
the AMD Holding Assignment of Current Assets, the AMD Holding Charge of Bank
Accounts, the AMD Holding Global Assignment, the AMD Holding Share Pledge
Agreement, the AMD Holding KG Partnership Interest Pledge Agreement (AMD
Saxonia), the AMD Holding Share Pledge Agreement (AMD Admin), and each other
instrument or document designated by the Agent (with the consent of each AMD
Company) as an AMD Holding Security Document under and for purposes of this
Agreement.

                  "AMD Holding Share Pledge Agreement" means the AMD Holding
Share Pledge Agreement, in the form set out in Schedule 51 to the Loan
Agreement, between AMD Holding and the Security Agent.

                  "AMD Holding Share Pledge Agreement (AMD Admin)" means the AMD
Holding Share Pledge Agreement (AMD Admin) between AMD Holding and the Security
Agent dated 3 June 2002.

                  "AMD Holding Wafer Purchase Agreement" means the AMD Holding
Wafer Purchase Agreement, in the form of Schedule 33 to the Loan Agreement,
between AMD Inc. and AMD Holding.

                  "AMD Inc." has the meaning assigned to that term in the
introduction to this Agreement.

                  "AMD Inc. Guaranty" means the AMD Inc. Guaranty in the form
set out in Schedule 27 to the Loan Agreement, executed by AMD Inc. in favour of
AMD Saxonia, the Agent, and the Security Agent for the benefit of the Secured
Parties.

                  "AMD Inc. 1999 Loan and Security Agreement" means the Loan and
Security Agreement, dated as of July 13, 1999, between, inter alia, AMD Inc.,
the lenders party thereto, and Bank of America National Trust and Savings
Association, as administrative agent, as amended by the First Amendment to Loan
and Security Agreement, dated as of July 30, 1999 and by the Second Amendment to
Loan and Security Agreement, dated as of February 12, 2001.

                  "AMD Inc. Pledge Agreement Over Membership Interests in AMD
Saxony LLC" means the AMD Inc. Pledge Agreement Over Membership Interests in AMD
Saxony LLC between AMD Inc. and the Security Agent dated 3 June 2002.

                  "AMD Inc. Primary Bank Credit Agreement" means, from time to
time:

                  (i)  the AMD Inc. 1999 Loan and Security Agreement; or

                                       4



                  (ii)     if the agreement referred to in paragraph (i) above
                           is terminated or cancelled, then any secured or
                           unsecured revolving credit or term loan agreement
                           between or among AMD Inc., as borrower, and any bank
                           or banks, as lender(s), for borrowed monies to be
                           used for general corporate purposes of AMD Inc., with
                           an original term of not less than 4 years and an
                           original aggregate loan commitment of at least
                           $100,000,000 (one hundred million Dollars) or the
                           equivalent thereof in any other currency, and, if
                           there is more than one such revolving credit or term
                           loan agreement, then such agreement which involves
                           the greatest original aggregate loan commitment(s)
                           and, as between agreements having the same aggregate
                           original loan commitment(s), then the one which has
                           the most recent date; or

                  (iii)    if the agreement referred to in paragraph (i) above
                           and all of the agreements, if any, which could apply
                           under paragraph (ii) above have been terminated or
                           cancelled, then so long as paragraph (ii) does not
                           apply as the result of one or more new agreements
                           being entered into, the agreement which is the last
                           such agreement under paragraph (i) or (ii) to be so
                           terminated or cancelled as in effect immediately
                           prior to such termination or cancellation.

                  "AMD Inc. Security" means all collateral security furnished
pursuant to the AMD Inc. Share Pledge Agreement and the AMD Inc. Pledge
Agreement Over Membership Interests in AMD Saxony LLC.

                  "AMD Inc. Senior Secured Note Indenture" means that certain
Indenture, dated as of August 1, 1996, between AMD Inc. and United States Trust
Company of New York, as trustee, relating to the issuance by AMD Inc. of
$400,000,000 (four hundred million Dollars) of its 11% Senior Secured Notes due
2003, as amended by the First Supplemental Indenture dated as of January 13,
1999, by the Second Supplemental Indenture dated as of April 8, 1999 and by the
Third Supplemental Indenture dated as of July 28, 2000.

                  "AMD Inc. Share Pledge Agreement" means the AMD Inc. Share
Pledge Agreement, in the form set out in Schedule 41 to the Loan Agreement,
between AMD Inc. and the Security Agent.

                  "AMD Inc. Subordination Agreement" means the AMD Inc.
Subordination Agreement, in the form set out in Schedule 42 to the Loan
Agreement, between AMD Inc., AMD Holding, and the Security Agent.

                  "AMD Saxonia" has the meaning assigned to that term in the
first recital of this Agreement.

                  "AMD Saxonia Assignment of Contractual Rights" means the AMD
Saxonia Assignment of Contractual Rights, in the form set out in Schedule 49 to
the Loan Agreement, between AMD Saxonia and the Security Agent.

                                       5



                  "AMD Saxonia Assignment of Current Assets" means the AMD
Saxonia Security Assignment of Current Assets, in the form set out in Schedule
44 to the Loan Agreement, between AMD Saxonia and the Security Agent.

                  "AMD Saxonia Assignment of Fixed Assets" means the AMD Saxonia
Security Assignment of Fixed Assets, in the form set out in Schedule 45 to the
Loan Agreement, between AMD Saxonia and the Security Agent.

                  "AMD Saxonia Assignment of Insurances" means the AMD Saxonia
Assignment of Insurances, in the form set out in Schedule 46 to the Loan
Agreement, between AMD Saxonia and the Security Agent.

                  "AMD Saxonia Assignment (U.S.A)" means the AMD Saxonia
Assignment of, inter alia, rights under the AMD Saxonia Wafer Purchase
Agreement, the Sponsors' Loan Agreement, and the Revolving Loan Facility
Agreement and insurances, in the form set out in Schedule 50 to the Loan
Agreement, between AMD Saxonia and the Security Agent.

                  "AMD Saxonia Charge of Project Accounts" means the AMD Saxonia
Charge of Project Accounts, in the form set out in Schedule 48 to the Loan
Agreement, between AMD Saxonia and the Security Agent.

                  "AMD Saxonia Disclosure Schedule" means the Disclosure
Schedule attached to the Loan Agreement as Schedule 15, as it may be amended,
supplemented, or otherwise modified from time to time by AMD Saxonia with the
written consent of the Agent.

                  "AMD Saxonia/Dresdner Subsidy Agreement" means the
AMD/Dresdner Subsidy Agreement, in the form set out in Schedule 25 to the Loan
Agreement, between AMD Saxonia and Dresdner.

                  "AMD Saxonia Global Assignment" means the AMD Saxonia Global
Assignment, in the form set out in Schedule 47 to the Loan Agreement, between
AMD Saxonia and the Security Agent.

                  "AMD Saxonia Hedging Contract" means the Agreement, in the
form set out in Schedule 50a to the Loan Agreement, between AMD Saxonia and AMD
Inc.

                  "AMD Saxonia Land Charge" means the Grundschuld, in the form
set out in Schedule 43 to the Loan Agreement, between AMD Saxonia and the
Security Agent.

                  "AMD Saxonia Partnership Agreement" (AMD Saxonia
Gesellschaftsvertrag) means the AMD Saxonia Partnership Agreement between AMD
Holding, AMD Admin and AMD Saxony LLC dated 3 June 2002.

                  "AMD Saxonia Research Agreement" means the AMD Saxonia
Research, Design and Development Agreement, in the form set out in Schedule 36
to the Loan Agreement, between AMD Holding and AMD Saxonia.

                                       6



                  "AMD Saxonia Security" means all collateral security created
pursuant to the AMD Saxonia Security Documents.

                  "AMD Saxonia Security Documents" means, collectively, the AMD
Saxonia Assignment (U.S.A), the AMD Saxonia Assignment of Contractual Rights,
the AMD Saxonia Assignment of Current Assets, the AMD Saxonia Assignment of
Fixed Assets, the AMD Saxonia Assignment of Insurances, the AMD Saxonia Charge
of Project Accounts, the AMD Saxonia Land Charge, the AMD Saxonia Global
Assignment, and each other instrument or document designated by the Agent (with
the consent of each AMD Company) as an AMD Saxonia Security Document under and
for purposes of this Agreement.

                  "AMD Saxonia Wafer Purchase Agreement" means the AMD Saxonia
Wafer Purchase Agreement, in the form set out in Schedule 35 to the Loan
Agreement, between AMD Holding and AMD Saxonia.

                  "AMD Saxony LLC" has the meaning assigned to that term in the
introduction to this Agreement.

                  "AMD Saxony LLC Partnership Interest Pledge Agreement (AMD
Saxonia)" means the AMD Saxony LLC Partnership Interest Pledge Agreement (AMD
Saxonia) between AMD Saxony LLC and the Security Agent dated 3 June 2002.

                  "AMD Saxony LLC Security" means all collateral security
furnished pursuant to the AMD Saxony LLC Security Documents.

                  "AMD Saxony LLC Security Agreement" means the AMD Saxony LLC
Security Agreement between AMD Saxony LLC and the Security Agent dated 3 June
2002.

                  "AMD Saxony LLC Security Documents" means, collectively, the
AMD Saxony LLC Security Agreement, the AMD Saxony LLC Partnership Interest
Pledge Agreement (AMD Saxonia), and each other instrument or document designated
by the Agent (with the consent of each AMD Company) as an AMD Saxony LLC
Security Document under and for purposes of this Agreement.

                  "Amendment Agreements" means the following agreements and
documents each dated 3 June 2002: (i) Amendment Agreement No. 4 to the
Syndicated Loan Agreement among AMD Saxonia, the Security Agent and the Agent;
(ii) the Accession Agreement and Fourth Amendment to Sponsors' Support Agreement
between the Sponsors, AMD Saxony LLC, AMD Admin, the Agent and the Security
Agent; (iii) the Third Amendment to the AMD Saxonia Wafer Purchase Agreement
between AMD Holding and AMD Saxonia; (iv) the Consent/Acknowledgement under the
AMD Holding Wafer Purchase Agreement executed by AMD Holding, AMD Inc. and the
Security Agent; (v) the Accession Agreement and Second Amendment to Sponsors'
Subordination Agreement between the Sponsors, AMD Saxony LLC, AMD Admin, AMD
Saxonia, the Agent and the Security Agent; (vi) the Accession Agreement and
Second Amendment to AMD Inc. Subordination Agreement between the Sponsors, AMD
Saxony LLC, AMD Admin, the Agent and the Security Agent; (vii) the First
Amendment to Revolving Loan Facility Agreement between the Sponsors and AMD
Saxonia; (viii) the Third Amendment to Sponsors' Loan Agreement between the
Sponsors and AMD Saxonia; (ix) the

                                       7



First Amendment to AMD Saxonia Assignment (U.S.A.) between AMD Saxonia and the
Security Agent; and (x) the Clarification and Security Agreement between the AMD
Companies, the Security Agent and the Agent.

                  "Approved Project Budget" means:

                  (i)      that certain Project Budget, in the form set out in
                           Schedule 6 to the Loan Agreement, which has been
                           prepared by AMD Saxonia and approved by each Sponsor;
                           and

                  (ii)     at any time after such Project Budget has been
                           updated, amended, supplemented, or otherwise
                           modified, and prior to Completion, any such updated,
                           amended, supplemented, or modified Project Budget
                           having been approved by each AMD Company (such
                           approval of each Sponsor not to be unreasonably
                           withheld or delayed) and the Agent (which may, in its
                           sole discretion, consult with the Technical Advisor
                           and the Banks' Auditor) in accordance with ss. 18.2
                           of the Loan Agreement.

                  (iii)    The Approved Project Budget referred to in paragraph
                           (i) above and (subject to the requirements of Section
                           13.1(i)(d)(y)(1)) each subsequent Approved Project
                           Budget from time to time in effect shall itemise,
                           separately from the other information set forth
                           therein, and on a Project Phase by Project Phase
                           basis, the aggregate Capital Expenditure then
                           required to be made by AMD Saxonia in order to
                           complete each then uncompleted Project Phase of the
                           Project and to achieve Completion. All references
                           herein to the Approved Project Budget shall, at any
                           time, refer to the Approved Project Budget as then in
                           effect.

                  "Approved Project Schedule" means:

                  (i)      initially, that certain Project Schedule, in the form
                           set out in Schedule 7 to the Loan Agreement, which
                           has been prepared by AMD Saxonia and approved by each
                           Sponsor with respect to the schedule for completing
                           each Project Phase and for achieving Completion; and

                  (ii)     at any time after such Project Schedule has been
                           updated, amended, supplemented, or otherwise
                           modified, and prior to Completion, any such updated,
                           amended, supplemented, or modified Project Schedule
                           having been approved by each AMD Company (such
                           approval of each Sponsor not to be unreasonably
                           withheld or delayed) and the Agent (which may, in its
                           sole discretion, consult with the Technical Advisor
                           and the Banks' Auditor) in accordance with ss. 18.2
                           of the Loan Agreement.

                  The initial Approved Project Schedule and (subject to the
                  requirements of Section 13.1(i)(d)(y)(2)) each subsequent
                  Approved Project Schedule from time to time in effect shall
                  itemise, separately from the other information set forth
                  therein, and on a Project Phase by Project Phase basis, the
                  then anticipated date for completing each then uncompleted
                  Project Phase and for achieving

                                       8



                  Completion. All references herein to the Approved Project
                  Schedule shall, at any time, refer to the Approved Project
                  Schedule as then in effect.

                  "Assignment and Trust Agreement" means the agreement referred
to in (ix) of the definition of Conversion Documents.

                  "Auditor" means Ernst & Young Wirtschaftsprufungsgesellschaft
mbH or such other firm of auditors charged with duties relating to the Project
as may be appointed by AMD Saxonia with the consent of the Agent, such consent
not to be unreasonably delayed or withheld.

                  "Available Tranche A Amount" means, on any date, the excess,
if any, of:

                  (i)    the Total Tranche A Commitment Amount on such date;

                  over

                  (ii)   the aggregate unpaid principal amount of all Tranche A
                         Advances outstanding on such date.

                  "Bank" and "Banks" have the respective meanings assigned to
those terms in the second recital of this Agreement.

                  "Banks' Auditor" means BDO Deutsche Warentreuhand AG
Wirtschafts-prufungsgesellschaft or such other firm of auditors charged with
duties relating to the Project as may be appointed by the Banks with the consent
of AMD Saxonia, such consent not to be unreasonably delayed or withheld.

                  "Business Day" means any day of the year on which banks are
generally open for business in London, Frankfurt am Main, Dresden, Luxembourg
and, to the extent the same relates to any obligation to be performed by AMD
Inc. or AMD Saxony LLC, San Francisco.

                  "Capital Expenditure" means all acquisition or manufacturing
costs in respect of fixed and movable assets in accordance with ss. 266 2 A II
of the Commercial Code and all acquisition costs for intangible assets in
accordance with ss. 266 2 A I of the Commercial Code, to the extent the same
have a useful operational life of more than one year (not being expenditures
chargeable to the profit and loss account).

                  "Capitalised Lease Liabilities" means , with respect to any
Person, all monetary obligations of such Person under any leasing or similar
arrangement which, in accordance with GAAP, would be classified as fixed or
capitalised leases or finance leases, and, for purposes of this Agreement, the
amount of such obligations shall be the capitalised amount thereof, determined
in accordance with GAAP, and the stated maturity thereof shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without payment
of a penalty.

                  "Cash Equivalent Investment" means any security or other
instrument set out in Schedule 23 to the Loan Agreement.

                                       9



                  "Class A Sponsors' Loans" has the meaning assigned to that
term in Section 3.1.

                  "Class C Sponsors' Loans" has the meaning assigned to that
term in Section 3.1.

                  "Completion" means the date on which the initial satisfaction
of all conditions set forth in the Technical Completion Certificate (Obligors)
and the Technical Completion Certificate (Technical Advisor), set out in
Schedules 9 and 10 to the Loan Agreement is confirmed to the Agent by the
submission of properly executed originals of such Certificates.

                  "Completion Certificates" means the Scheduled Project Phase
Completion Certificates and the Technical Completion Certificates.

                  "Consent and Agreement" means:

                  (i)    in the case of the Sponsors, the Sponsors' Consent and
                         Agreement;

                  (ii)   in the case of the Contractor, the Contractor's Consent
                         and Agreement;

                  (iii)  in the case of an Equipment Supplier, each Equipment
                         Supplier's Consent and Agreement; and

                  (iv)   in the case of a Service Supplier, each Service
                         Supplier's Consent and Agreement.

                  "Contingent Liabilities" means, with respect to any Person,
any agreement, undertaking, or arrangement by which such Person guarantees,
endorses, or otherwise becomes or is contingently liable upon (by direct or
indirect agreement, contingent or otherwise, to provide funds for payment to,
supply funds to, or otherwise invest in, a debtor, or otherwise to assure a
creditor against loss) the indebtedness, obligation, or other liability of any
other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the shares of any other Person. The amount of any Person's obligation under any
Contingent Liability shall (subject to any limitation set forth therein) be
deemed to be the outstanding principal amount (or maximum principal amount, if
larger) of the indebtedness, obligation, or other liability guaranteed thereby.

                  "Contractor" means Meissner & Wurst GmbH & Co.,
Rossbachstrasse 38, 70499 Stuttgart, registered in the Commercial Register of
the Stuttgart County Court HRA 1208.

                  "Contractor's Consent and Agreement" means the Contractor's
Consent and Agreement, in the form set out in Schedule 39 to the Loan Agreement,
or in such other form as is consented to by the Security Agent from the
Contractor in favour of the Security Agent.

                  "Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust, or other instrument,
document, or agreement to which such Person is a party or by which it or any of
its property is bound.

                  "Contribution Date" means 30 June 1999.

                                       10



                  "Conversion" means the change in the legal form of AMD Saxonia
from a Gesellschaft mit beschrankter Haftung (a limited liability company
organized under the laws of the Federal Republic of Germany) to a Limited
Partnership in accordance with the Conversion Documents and the Registration.

                  "Conversion Documents": means the following agreements and
documents, each in the Agreed Terms: (i) the Certificate of Formation of AMD
Saxony LLC; (ii) the AMD Admin Articles of Association; (iii) the Formation
Protocol for AMD Admin; (iv) the Application to the Commercial Register for
Formation of AMD Admin; (v) the Resolution of AMD Holding as Shareholder of AMD
Admin for Section 181 German Civil Code Release; (vi) the List of Shareholders
for AMD Admin; (vii) the AMD Saxony LLC Agreement; (viii) the Partnership
Agreement of AMD Saxony LLC & Co., KG; (ix) the Assignment and Trust Agreement
between AMD Holding and AMD Saxony LLC; (x) the Purchase and Assignment
Agreement between AMD Holding and AMD Admin; (xi) the Resolution of AMD Holding
as Shareholder of AMD Saxonia for Transfer of Fractional Share to AMD Saxony
LLC; (xii) the Notification to AMD Saxonia of Assignment of Fractional Share to
AMD Admin; (xiii) the List of Shareholders of AMD Saxonia (reflecting addition
of AMD Admin); (xiv) the Resolution of AMD Holding and AMD Saxony LLC as
Shareholders of AMD Saxonia for Transfer of Fractional Share to AMD Admin; (xv)
the Notification to AMD Saxonia of Assignment of Fractional Share to AMD Saxony
LLC; (xvi) the List of Shareholders of AMD Saxonia (reflecting addition of AMD
Saxony LLC); (xvii) the Resolution of AMD Holding, AMD Admin and AMD Saxony LLC
as Shareholders of AMD Saxonia Approving Conversion to a Limited Partnership;
(xviii) the Resolution of AMD Inc. as Shareholder of AMD Holding Approving
Conversion of AMD Saxonia; (xix) Application to the Commercial Register for
Conversion of AMD Saxonia to a Limited Partnership; (xx) Application to the Real
Estate Register for Change in AMD Saxonia's Name; (xxi) the Transfer Agreement
for Transfer Back Of Fractional Share between AMD Holding and AMD Saxony LLC;
(xxii) Application to the Commercial Register for Transfer Back of Fractional
Share by AMD Saxony LLC to AMD Holding; (xxiii) Power of Attorney regarding
Removal of AMD Saxony LLC as General Partner of AMD Saxonia; and (xxiv) any
other agreement or document designated by the AMD Companies (with the consent of
the Agent) in addition to or in substitution for any of the above-named
documents or agreements as a "Conversion Document."

                  "Conversion Effective Date" means the date on which the
Registration takes effect.

                  "Design/Build Agreement" means the Design/Build Agreement for
the construction of the Plant and the Design Center, in the form set out in
Schedule 39 to the Loan Agreement, between the Contractor and AMD Saxonia.

                  "Design Center" means the research, design, and development
facilities constructed or to be constructed by AMD Saxonia and integrated with
the Plant for the purpose of designing and developing a broad spectrum of
state-of-the-art and other digital components such as micro-processors and
circuits for the telecommunications and multi-media sectors, and improvements
thereof.

                                       11



                  "Deutsche Mark Equivalent" means, with respect to any Class A
Sponsors' Loan, the amount, expressed in Deutsche Marks, which results from the
conversion of Dollars to Deutsche Marks at a spot rate of exchange equal to the
greater of (i) DM 1.45 for $1.00 and (ii) the Agent's spot rate of exchange,
expressed in Deutsche Marks, for the sale of Dollars for Deutsche Marks
prevailing on the date two (2) Business Days prior to the date such Class A
Sponsors' Loan is or was due to be made.

                  "Deutsche Marks" and the sign "DM" mean lawful money of the
Federal Republic of Germany from time to time.

                  "Disclosure Schedules" means the AMD Saxonia Disclosure
Schedule and the Sponsors' Disclosure Schedule, collectively.

                  "Dollars" and the sign "$" mean the lawful money of the United
States of America from time to time.

                  "Dresdner" has the meaning assigned to that term in the
introduction to this Agreement.

                  "Encumbrance" means, (i) when used with reference to any
Person organized and existing under the laws of the Federal Republic of Germany,
any security interest in property or in rights to secure payment of a debt or
performance of an obligation, including, but not limited to, mortgages
(Hypotheken), land charges (Grundschulden), annuity charges (Rentenschulden),
contractual and legal pledges (vertragliche und gesetzliche Pfandrechte)
including pledges or mortgages in favour of execution creditors
(Pfandungspfandrechte und Zwangshypotheken), transfers of title by way of
security (Sicherungsubereignungen), assignments of claims or other property or
rights by way of security (Sicherungsabtretungen und sonstige Ubertragungen von
Sachen oder Rechten zur Sicherung), retention of title arrangements
(Eigentumsvorbehalt) including extended retentions of title (erweiterter und
verlangerter Eigentumsvorbehalt), and any other priority or preferential
arrangement of any kind or nature whatsoever, and (ii) when used with reference
to any other Person, any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge (including floating and fixed charges) against or interest in property to
secure payment of a debt or performance of an obligation, or other preferential
arrangement of any kind or nature whatsoever in respect of any property, but not
including the interest of a lessor under a lease which, in accordance with GAAP,
would be classified as an operating lease.

                  "Equipment Suppliers" means, collectively, each Person party
to a contract or other agreement with AMD Saxonia in the capacity of a supplier
of fixed or tangible current assets for the Project; it being understood and
agreed that AMD Inc. or an Affiliate thereof (other than AMD Saxonia) may be an
Equipment Supplier.

                  "Equipment Supplier's Consent and Agreement" means, with
respect to an Equipment Supplier, such Equipment Supplier's Consent and
Agreement, in the form set out in Schedule 40 to the Loan Agreement or Annex 3
to Schedule 49 or Annex 3 to Schedule 55 of the Loan Agreement, as the case may
be, or in such other form as is consented to by the Security

                                       12



Agent, which pertains to a Material Equipment Supply Contract or which is
otherwise required pursuant to the terms of the Loan Agreement or the Security
Documents.

          "Equipment Supply Contract" means each agreement (also in the form of
an order) between AMD Saxonia and suppliers (including AMD Inc. or one of its
Affiliates) relating to the acquisition by, and delivery to, AMD Saxonia of
fixed or tangible current assets for the Project but excluding Excepted Software
Agreements.

          "Equity Capital" means (i) with respect to AMD Saxonia (a) at any time
prior to the Conversion Effective Date, registered stated capital (Stammkapital)
and (b) at any time on or after the Conversion Effective Date, capital
(Haftsummen and Pflichteinlagen) and (ii) with respect to AMD Holding registered
stated capital (Stammkapital).

          "Euro" means the currency introduced at the start of the third stage
of economic and monetary union pursuant to the treaty establishing the European
Community, as amended by the treaty on European Union effective January 1, 1999.

          "Event of Default" means an event which would entitle the Banks to
terminate their commitments and the loan facilities pursuant to ss. 21 of the
Loan Agreement.

          "Event of Termination" means any event which would entitle a party to
an Operative Document to terminate such Operative Document in accordance with
the terms thereof; provided, however, that such event could reasonably be
expected to have a material adverse consequence to the entirety of the
transactions contemplated by the Operative Documents.

          "Excepted Software Agreements" means software licences and software
service agreements entered into by AMD Saxonia and which are used exclusively:

          (i)  for financial planning, business administration systems and
               similar ancillary administrative functions which are not linked
               or connected with (a) the production process in the Plant; (b)
               general bookkeeping and invoicing; and (c) production planning;
               or

          (ii) in the Design Center.

          "Financing Documents" means, collectively, the Loan Agreement, this
Agreement, the Amendment Agreements, the Sponsors' Guaranty, the Sponsors'
Subordination Agreement, the AMD Inc. Subordination Agreement, the Sponsors'
Loan Agreement, the Revolving Loan Facility Agreement, the AMD Saxonia/Dresdner
Subsidy Agreement, the SAB/Dresdner Subsidy Agreement, the 65/35 Burgschaft, the
AMD Saxonia Hedging Contract, the Security Documents, each Consent and
Agreement, and each other instrument or document designated by the Agent (with
the consent of each AMD Company) as a Financing Document under and for purposes
of this Agreement.

          "Fiscal Month" means any fiscal month of a Fiscal Year.

          "Fiscal Quarter" means any fiscal quarter of a Fiscal Year.

                                       13



          "Fiscal Year" means any period of approximately 12 consecutive
calendar months ending on the last Sunday in December; references to a Fiscal
Year with a number corresponding to any calendar year (e.g., the "1997 Fiscal
Year") refer to the Fiscal Year ending on the last Sunday in December occurring
during such calendar year.

          "GAAP" means, (x) in the case of AMD Saxonia, AMD Holding or AMD
Admin, or its respective financial statements, those generally accepted
accounting principles in general use by the accounting profession (Grundsatze
ordnungsgemasser Buchfuhrung und Bilanzierung) and in effect in Germany on the
date on which such financial statements are delivered pursuant to this Agreement
(it being expressly understood and agreed that AMD Saxonia's monthly and
quarterly financial statements, as the case may be, shall be prepared on the
basis of a Fiscal Month or a Fiscal Quarter (rather than on the basis of a
calendar month or a calendar quarter, as the case may be), but shall be
reconciled on an annual basis), and (y) in the case of AMD Inc. or AMD Saxony
LLC or their respective financial statements, generally accepted accounting
principles set forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable to the
circumstances as of the date of determination.

          "Governmental Approvals" means each and every authorization, consent,
approval, licence, permit, franchise, certificate, exemption or order of or
filing or registration with, any Governmental Authority or legal or regulatory
body, federal, state, local or foreign except for (i) routine or periodic
information reports which, if not filed, would not in any case or in the
aggregate, adversely affect the due authorization, execution, delivery,
validity, legality, or enforceability of any of the Operative Documents, (ii)
filings of certificates or articles of incorporation, registrations or
qualifications of a foreign corporation or similar corporate filings, and (iii)
returns and filings with respect to taxes.

          "Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.

          "Guarantors" means the Federal Republic of Germany and the Free State
of Saxony in their respective capacities as guarantors pursuant to the 65/35
Burgschaft.

          "Guaranty Decision" means the decision dated 2 July 1996 set out in
Schedule 24 to the Loan Agreement concerning the guaranty application made by
AMD Saxonia, including the following documents:

          (i)  the specimen credit agreement F 13.09.1990 (1993 Edition)
               Federal/State or THA

          (ii) the General Terms and Conditions applicable to the assumption of
               Guaranties by the Federal Republic of Germany and the States of
               the

                                       14



                Accession Territory (States) in the edition dated F 04.01.1993
                Federal/State, together with

          (iii) Notes relating to applications for guaranties and loans of the
                Treuhandanstalt Berlin and/or Federal and State guaranties for
                projects in the Accession Territory in the edition dated 1993 F
                12.10.1990,

          (iv)  together with the Memorandum of Understanding ("Gemeinsame
                Feststellungen") dated 19 February 1997, the Amendment Decision
                of the Guarantors of 12 December 1997 and a letter of
                confirmation from C&L Deutsche Revision AG dated 5 January 1998;

          (v)   the letter from Deutsche Revision AG to Dresdner Kleinwort
                Benson dated 17 November 2000; and

          (vi)  the letter from C&L Deutsche Revision AG to Dresdner Kleinwort
                Wasserstein and Dresdner Bank AG dated 22 May 2002.

          "Indebtedness" of any Person, means, without duplication:

          (i)   all obligations of such Person for borrowed money and all
                obligations of such Person evidenced by bonds, debentures,
                notes, or similar instruments;

          (ii)  all obligations, contingent or otherwise, relative to the face
                amount of all letters of credit, guarantees, and bankers'
                acceptances issued for the account of such Person, whether or
                not drawn or paid;

          (iii) all obligations of such Person as lessee under leases which have
                been or should be, in accordance with GAAP, recorded as
                Capitalised Lease Liabilities;

          (iv)  all net liabilities of such Person under or in connection with
                any interest rate, currency, commodity, or other hedging
                contracts to which such Person is a party;

          (v)   all other items which, in accordance with GAAP, would be
                included as liabilities on the liability side of the balance
                sheet of such Person as of the date at which Indebtedness is to
                be determined;

          (vi)  whether or not so included as liabilities in accordance with
                GAAP, all obligations of such Person to pay the deferred
                purchase price of property or services, and indebtedness
                (including pre-paid interest thereon) secured by an Encumbrance
                on property owned or being purchased by such Person (including
                indebtedness arising under conditional sales or other title
                retention agreements), whether or not such indebtedness shall
                have been assumed by such Person or is limited in recourse; and

          (vii) all Contingent Liabilities of such Person in respect of any of
                the foregoing.

                                       15



          For all purposes of this Agreement, the Indebtedness of any Person
          shall include the Indebtedness of any partnership or unincorporated
          joint venture in which such Person is a general partner or a joint
          venturer, respectively.

          "Information Memorandum" means the Information Memorandum, dated
September 1996, entitled "AMD Saxony Manufacturing GmbH, Dresden: DM
1,650,000,000 Information Memorandum Limited Recourse Financing", prepared and
furnished by the AMD Companies to the Agent, for distribution to prospective
lenders under the Loan Agreement, as such Information Memorandum may at any time
be amended or modified with the consent of each AMD Company and in effect.

          "Instructing Group" means in respect of any matter, the Banks whose
votes are required to pass a resolution on such matter as determined in
accordance with ss. ss. 22.5 and 22.6 of the Loan Agreement.

          "License Agreement" means the License Agreement, in the form set out
in Schedule 38 to the Loan Agreement, between AMD Inc., AMD Holding, and AMD
Saxonia.

          "Limited Partnership" means a limited partnership
(Kommanditgesellschaft) under the laws of the Federal Republic of Germany.

          "Loan Agreement" has the meaning assigned to that term in the second
recital of this Agreement.

          "Loan Agreement Effective Date" means the date specified by the Agent
in a notice given to the parties hereto as being the first date on or as of
which (i) the Loan Agreement has been executed and delivered by each of the
respective parties thereto, and (ii) the Agent has received each of the
documents referred to in ss. ss 5.1.1 to 5.1.16 of the Loan Agreement, in each
case in the form, and with the substance, specified therein.

          "Loan Agreement Termination Date" has the meaning assigned to that
term in Section 15.7.

          "Management Plan" means the project concept attached as Schedule 14 to
the Loan Agreement, as the same may from time to time be further amended or
modified by AMD Saxonia (with the consent of each Sponsor, whose consent will
not be unreasonably delayed or withheld) in accordance with the terms of this
Agreement and the Loan Agreement and in effect.

          "Management Service Agreement" means the Amended and Restated
Management Service Agreement, in the form set out in Schedule 37 to the Loan
Agreement, between AMD Inc., AMD Holding, and AMD Saxonia.

          "Material Adverse Effect" means

          (i)  a material adverse change in, or a material adverse effect upon,
               the operations, business, properties, condition (financial or
               otherwise), or prospects of any AMD Company, or of AMD Inc. and
               its Subsidiaries, taken as a whole;

                                       16



          (ii)  with respect to the Contractor, a material adverse change in, or
                a material adverse effect upon, the operations, business,
                properties, condition (financial or otherwise), or prospects of
                the Contractor and its Subsidiaries, taken as a whole;

          (iii) with respect to an Equipment Supplier, a material adverse change
                in, or a material adverse effect upon, the operations, business,
                properties, condition (financial or otherwise), or prospects of
                such Equipment Supplier and its Subsidiaries, taken as a whole;

          (iv)  with respect to a Service Supplier, a material adverse change
                in, or a material adverse effect upon, the operations, business,
                properties, condition (financial or otherwise), or prospects of
                such Service Supplier and its Subsidiaries, taken as a whole;

          (v)   a material impairment of the ability of any AMD Company, the
                Contractor, any Equipment Supplier, or any Service Supplier to
                perform its obligations under any Operative Document to which it
                is or is to be a party; or

          (vi)  a material adverse effect upon (i) the legality, validity,
                binding effect, or enforceability against any AMD Company, the
                Contractor, any Equipment Supplier, or any Service Supplier of
                any Operative Document, or (ii) the perfection or priority of
                any Security granted under any of the Security Documents;

          provided, however, that with respect to an event described in clause
          (ii), (iii), (iv), or, with respect to the Contractor, an Equipment
          Supplier, or a Service Supplier, clause (v) or (vi) above, such event
          could reasonably be expected to have a material adverse consequence to
          the entirety of the transactions contemplated by the Operative
          Documents.

          "Material AMD Inc. Subsidiary" means, at any time, any Subsidiary of
AMD Inc. having at such time (either on an individual basis or on a consolidated
basis for such Subsidiary and its Subsidiaries) either:

          (i)   total (gross) revenues for the preceding four Fiscal Quarter
                period in excess of 5% of gross revenues for AMD Inc. and its
                Subsidiaries on a consolidated basis for such period, or

          (ii)  total assets, as of the last day of the preceding Fiscal
                Quarter, having a net book value in excess of 5% of total assets
                for AMD Inc. and its Subsidiaries on a consolidated basis as of
                such date,

          in each case, based on the then most recent annual or quarterly
          financial statements delivered to the Agent hereunder; provided,
          however, that AMD Saxonia, AMD Saxony LLC, AMD Holding and AMD Admin
          shall, for purposes of this Agreement, each be deemed to be a Material
          AMD Inc. Subsidiary.

                                       17



               "Material Equipment Supply Contract" means each Equipment Supply
               Contract:

               (i)     pursuant to which AMD Saxonia incurs obligations in
                       aggregate in excess of DM 3,750,000, or

               (ii)    which has an initial term in excess of 12 months, or
                       which has an indefinite term and, in either case, cannot
                       be terminated by AMD Saxonia on less than 12 months'
                       notice, or

               (iii)   which is listed in Part I of Schedule 40 to the Loan
                       Agreement.

               "Material Service Contract" means each Service Contract (with the
exception of the AMD Saxonia Wafer Purchase Agreement, the Management Service
Agreement and employment contracts):

               (i)     pursuant to which AMD Saxonia incurs obligations in
                       aggregate in excess of DM 2,500,000  during the term of
                       the contract, or

               (ii)    which has an initial term in excess of 12 months, or
                       which has an indefinite term and, in either case, cannot
                       be terminated by AMD Saxonia on less than 12 months'
                       notice, or

               (iii)   which is listed in Part I of Schedule 40 to the Loan
                       Agreement.

               "Minimum Liquidity Covenant" means the covenant described as
(Mindestliquiditatskennzahl) in Schedule 17 to the Loan Agreement, pursuant to
which AMD Saxonia has undertaken to ensure at all times from 1 July 2001 until
the payment in full of all Secured Obligations, the balance standing to the
credit of the Project Accounts shall be ***

               "Minimum Liquidity Covenant Calculation Date" means, with effect
from 1 July 2001:

               (i)     the date as of which the Minimum Liquidity Covenant is,
                       or is required to be, calculated in any certificate of
                       compliance furnished by AMD Saxonia pursuant to ss.
                       16.2.1 of the Loan Agreement;

               (ii)    the date so referred to in a confirmation  relating to
                       the financial covenants given by the Auditor pursuant
                       to ss. 16.2.2 of the Loan Agreement; and

               (iii)   each other date on which the Agent has reasonably
                       requested a calculation of the Minimum Liquidity Covenant
                       to be made.

               "Operative Documents" means, collectively, the Project
Agreements, the Financing Documents, the AMD Inc. Primary Bank Credit Agreement,
the Management Plan, each Project Budget, each Project Schedule, each Approved
Project Budget, each Approved Project Schedule, the Information Memorandum, the
Completion Certificates, the Conversion

- ----------------------------
***Confidential information omitted and filed separately with the Securities and
Exchange Commission.

                                       18



Documents, and each other instrument or document designated by the Agent (with
the consent of each AMD Company) as an Operative Document under and for purposes
of this Agreement.

               "Opinion Reservations" means limitations on the enforceability of
legal documents as a matter of German law or the law of the United States of
America or one of its states and as incorporated as qualifications to an
enforceability opinion in the legal opinions delivered to and accepted by the
Agent under and pursuant to ss. 5.1.11 of the Loan Agreement or in the legal
opinions delivered to and accepted by the Agent under and pursuant to Amendment
No. 1 to the Loan Agreement dated 6 February, 1998, Amendment No. 2 to the Loan
Agreement dated 29 June, 1999, Amendment No. 3 to the Loan Agreement dated 20
February, 2001 and Amendment No. 4 to Loan Agreement dated 3 June 2002 .

               "Organizational Documents" means, with respect to any AMD
Company, its certificate of incorporation, certificate of formation, Memorandum
and Articles of Association, charter, by-laws, and (except with respect to AMD
Inc.) all shareholder agreements, voting trusts, and similar arrangements
applicable to its capital.

               "Paying Agent" has the meaning assigned to that term in the
second recital of this Agreement.

               "Perform in Accordance with the Plans and Specifications" means,
for purposes of the Technical Completion tests, and when used for the period
from and after Technical Completion, the performance by the Plant, on a
substantially continuous basis substantially as intended under normal operating
conditions, of the functions for which it was designed in accordance with the
Plans and Specifications. In order to certify that the Plant is capable of
performing substantially as intended under normal operating conditions, the
Technical Advisor will during normal operations of the Plant (and without, to
the extent practicable, disrupting production at the Plant), observe the
operation of the Plant and its component parts to determine if the Plant and its
component parts (except for uninstalled spares):

               (x)     are in operation and performing normally; and

               (y)     demonstrate as a whole the operation of the principal
                       component parts of the Plant at production rates
                       consistent with the design capacity of the Plant (as
                       observed by the Technical Advisor from the operating
                       log sheets and such other data as may be reasonably
                       available and is demonstrated from AMD Saxonia's
                       operating reports, copies of which will be obtained by
                       the Technical Advisor).

               The Technical Advisor will not be required to conduct specific
               tests on individual pieces of the Plant or its component parts in
               making this determination. In order to certify that the Plant has
               met the tests, or has demonstrated performance equivalent to the
               tests, set forth in the definition "Perform in Accordance with
               the Plans and Specifications", the Technical Advisor will:

               (i)     in the case of demonstrated performance equivalent to
                       the tests of the Plant (or portion thereof), obtain and
                       rely on copies of, review, and analyze, AMD Saxonia's
                       operating data comprising, but not limited to,

                                       19



                       daily log sheets, yield test results, and product
                       shipments and, based upon the foregoing, will determine
                       if the Plant (or such portion) has demonstrated its
                       required performance; and

               (ii)    in the case of a formal test run, observe the operations
                       during normal business hours to verify the operating
                       rates and time of operation and obtain and rely on copies
                       of and review and analyse AMD Saxonia's operating data
                       (as specified in clause (i) above) to independently
                       determine if the Plant (or portion thereof) has
                       demonstrated its required performance.

               "Permitted Encumbrances" means, (i) in the case of AMD Saxonia,
AMD Saxony LLC, AMD Admin or AMD Holding, any Encumbrance arising by operation
of law in the ordinary course of business, Encumbrances arising in the ordinary
course of business as a result of a supplier retaining title to goods supplied
pending payment for such goods, and Encumbrances on the Security pursuant to the
Security Documents, and (ii) in the case of AMD Inc. or any Subsidiary of AMD
Inc. (other than AMD Saxonia, AMD Saxony LLC, AMD Admin or AMD Holding), a
"Permitted Lien" under, and as defined in, the AMD Inc. 1999 Loan and Security
Agreement (or the equivalent thereof in any other AMD Inc. Primary Bank Credit
Agreement).

               "Person" means an individual or a corporation, partnership,
limited partnership, trust, incorporated or unincorporated association, joint
venture, joint stock company, government (or an agency or political subdivision
thereof), or other juridical entity of any kind.

               "Plans and Specifications" means the plans and specifications to
be prepared by AMD Saxonia and approved by each of the Sponsors (which approval
shall not be unreasonably delayed or withheld), the Technical Advisor, and the
Agent for the fitting out of the Plant and the Design Center, as the same may be
amended by AMD Saxonia from time to time with the consent of each Sponsor and
the Agent (which consent, in the case of each Sponsor, shall not be unreasonably
delayed or withheld); provided, that amendments to the plans and specifications
which do not, individually or in the aggregate, reduce or adversely affect the
value of the Plant and the Design Center in any material respect or the capacity
and purpose of the Plant as set out in the plans and specifications as
originally approved by the Technical Advisor and the Agent for purposes of the
Operative Documents shall not require the consent of the Agent.

               "Plant" means the advanced silicon wafer production facility
constructed or to be constructed by AMD Saxonia in or near Dresden, Germany to
manufacture integrated circuits in wafer form using high-volume semi-conductor
wafer fabrication processes.

               "Primary Secured Obligations" means, at the time any
determination thereof is to be made, all Secured Obligations then owing and,
whether or not then owing, all Secured Obligations in respect of the principal
of and interest on the Advances.

               "Project" has the meaning assigned to that term in the first
recital of this Agreement.

                                       20



               "Project Accounts" means the account or accounts referred to and
opened pursuant in ss. 19.1 of the Loan Agreement (including any sub-accounts
into which any such account may be divided), as such account may be renewed,
redesignated, or renumbered from time to time.

               "Project Agreements" means, collectively, the Wafer Purchase
Agreements, the Research Agreements, the Management Service Agreement, the
License Agreement, the Design/Build Agreement, the Equipment Supply Contracts,
the Service Contracts, the AMD Inc. Guaranty, and each other instrument or
document designated by the Agent (with the consent of each AMD Company) as a
Project Agreement under and for purposes of this Agreement.

               "Project Budget" means the budget, in the form set out in
Schedule 6 to the Loan Agreement, with such changes (if any) to its form as the
Agent may from time to time reasonably require, of projected Capital Expenditure
for the implementation of the Project and the Project Phases in the
implementation of the Project prior to Completion, including a detailed
projected sources and uses of funds statement, broken down for each Project
Phase on a Fiscal Quarter by Fiscal Quarter basis, as prepared by AMD Saxonia
and approved by each Sponsor in accordance with the Management Plan and the
Project Schedule, such approval not to be unreasonably withheld or delayed.

               "Project Costs" means all Capital Expenditure and other costs
which are incurred by AMD Saxonia in connection with the Project.

               "Project Phase" means each project phase set out in the Approved
Project Schedule contemplated for the implementation of the Project.

               "Project Schedule" means the schedule, in the form set out in
Schedule 7 to the Loan Agreement, with such changes (if any) to its form as the
Agent may from time to time reasonably require, of Project Phases to be achieved
during the construction of the Project prior to Completion, as prepared by AMD
Saxonia and approved by each Sponsor, such approval not to be unreasonably
withheld or delayed.

               "Registration" means the registration of the Conversion with the
Commercial Register in Dresden.

               "Relevant AMD Inc. Individual" means any Vice President or more
senior officer of AMD Inc., some or all of whose responsibilities include the
Project.

               "Requirements of Law" means, with respect to any Person, any law
(statutory or common), treaty, rule, or regulation or determination of an
arbitrator or of a Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.

               "Research Agreements" means, collectively, the AMD Saxonia
Research Agreement and the AMD Holding Research Agreement.

               "Revolving Loan Facility Agreement" means the $750,000,000
subordinated unsecured Revolving Loan Facility Agreement dated 20 February 2001
among AMD Inc., AMD

                                       21



Holding, and AMD Saxonia, as amended by the First Amendment to the Revolving
Loan Facility Agreement dated 3 June 2002.

               "Revolving Loans" means, the subordinated unsecured revolving
loans made by either Sponsor to AMD Saxonia under the terms of the Revolving
Loan Facility Agreement.

               "SAB" means Sachsische Aufbaubank GmbH, a Gesellschaft mit
beschrankter Haftung organised and existing under the laws of Germany and
registered in Dresden, Germany, acting on behalf of the Free State of Saxony.

               "SAB/Dresdner Subsidy Agreement" means the Agreement, in the form
set out in Schedule 26 to the Loan Agreement, between SAB and Dresdner.

               "SAB Related Agreements" means the AMD Saxonia/Dresdner Subsidy
Agreement and the SAB/Dresdner Subsidy Agreement, collectively.

               "Same Day Funds" means, at the time of any determination, funds
which are immediately available to AMD Saxonia.

               "Scheduled Project Phase Completion Certificates" means the
Scheduled Project Phase Technical Completion Certificate (Obligors) and the
Scheduled Project Phase Technical Completion Certificate (Technical Advisor).

               "Scheduled Project Phase Technical Completion" when used with
reference to a Project Phase, shall be deemed to have occurred when:

               (i)     all of the conditions set forth in the form of Scheduled
                       Project Phase Technical Completion Certificate (Obligors)
                       attached to the Loan Agreement as Schedule 9 thereto have
                       been satisfied in all material respects, all of the
                       statements appearing in said form of Certificate are true
                       and correct in all material respects, in each case with
                       respect to such Project Phase, and the Agent shall have
                       received a fully executed counterpart of such
                       Certificate; and

               (ii)    the Agent shall have received a fully executed
                       counterpart of the Scheduled Project Phase Technical
                       Completion Certificate (Technical Advisor).

               "Scheduled Project Phase Technical Completion Certificate
(Obligors)" means a Certificate, in the form set out in Schedule 9 to the Loan
Agreement (appropriately completed), executed by the AMD Companies, and
delivered to the Agent.

               "Scheduled Project Phase Technical Completion Certificate
(Technical Advisor)" means a Certificate, in the form set out in Schedule 10 to
the Loan Agreement (appropriately completed), executed by the Technical Advisor,
and delivered to the Agent.

                                       22



          "Secured Obligations" means all actual and contingent obligations of
AMD Saxonia to the Secured Parties under or arising out of the Financing
Documents and the Security Documents.

          "Secured Parties" means the Agent, the Paying Agent, the Security
Agent, and the Banks, collectively.

          "Security" means, collectively, the AMD Inc. Security, the AMD Holding
Security, the AMD Saxony LLC Security, the AMD Admin Security and the AMD
Saxonia Security.

          "Security Agent" has the meaning assigned to that term in the
introduction to this Agreement.

          "Security Documents" means, collectively, the AMD Saxonia Security
Documents, the AMD Holding Security Documents, the AMD Saxony LLC Security
Documents, the AMD Admin Security Documents, the AMD Inc. Pledge Agreement Over
Membership Interests in AMD Saxony LLC, the AMD Inc. Share Pledge Agreement, and
each other instrument or document designated by the Agent (with the consent of
each AMD Company) as a Security Document under and for purposes of this
Agreement.

          "Service Contract" means each agreement (which may be in the form of
an accepted order) between AMD Saxonia and a Service Supplier relating to the
acquisition by, and delivery to, AMD Saxonia of services for the Project but
excluding Excepted Software Agreements.

          "Service Suppliers" means, collectively, each Person party to a
contract or other agreement with AMD Saxonia in the capacity of a supplier of
services for the Plant or the Design Center.

          "Service Supplier's Consent and Agreement" means, with respect to a
Service Supplier, such Service Supplier's Consent and Agreement, in the form set
out in Schedule 40 to the Loan Agreement or Annex 3 to Schedule 49 of the Loan
Agreement, as the case may be, or such other form as is consented to by the
Security Agent, which pertains to a Material Service Contract or which is
otherwise required pursuant to the terms of the Loan Agreement or the Security
Documents.

          "65/35 Burgschaft" means the several maximum amount shortfall
guaranties issued by each of the Free State of Saxony (26%) and the Federal
Republic of Germany (39%) in accordance with the Guaranty Decision up to a
maximum aggregate amount of DM 975,000,000 (nine hundred and seventy five
million Deutsche Marks), together with 65% of the shortfall of interest and
costs, vested with a first right of satisfaction in favour of the Banks over all
security granted by each AMD Company as security for the Banks' risk of recovery
(but subject to a set-off of 65 % of payments (if any) made under the Sponsors'
Guaranty against the Guarantors' obligations under the aforesaid shortfall
guaranties).

          "Sponsors" has the meaning assigned to that term in the introduction
to this Agreement.

                                       23



          "Sponsors' Consent and Agreement" means the Sponsors' Consent and
Agreement, in the form set out in Schedule 31 to the Loan Agreement, between the
Sponsors, the Agent, and the Security Agent.

          "Sponsors' Disclosure Schedule" means the Disclosure Schedule attached
as Schedule II, as it may be amended, supplemented, or otherwise modified from
time to time by the Sponsors with the written consent of the Agent.

          "Sponsors' Guaranty" means the Sponsors' Guaranty, in the form set out
in Schedule 32 to the Loan Agreement, executed by the Sponsors in favour of the
Agent and the Security Agent for the benefit of the Secured Parties.

          "Sponsors' Loan Agreement" means the Sponsors' Loan Agreement, in the
form set out in Schedule 29 to the Loan Agreement, between the Sponsors, as
lenders, and AMD Saxonia, as borrower.

          "Sponsors' Loans" means all loans made or to be made by AMD Inc. or
AMD Holding to AMD Saxonia in accordance with the terms of the Sponsors' Loan
Agreement, which loans are subordinated in accordance with the Sponsors'
Subordination Agreement.

          "Sponsors' Subordination Agreement" means the Sponsors' Subordination
Agreement, in the form set out in Schedule 30 to the Loan Agreement, executed by
the Sponsors, AMD Saxonia, and the Security Agent.

          "Sponsors' Warranty Date" means each of the following dates which
occurs prior to the exercise of rights by the Security Agent under any of the
Security Documents: (i) the Loan Agreement Effective Date, (ii) each date AMD
Saxonia delivers a notice of drawing for an Advance under the Loan Agreement,
(iii) each date the AMD Companies deliver each Scheduled Project Phase Technical
Completion Certificate (Obligors), (iv) the date of Technical Completion, (v)
the Conversion Effective Date and (vi) each date the Sponsors deliver the
certificate referred to in Section 13.1(i)(c).

          "Stock Offering" means a public or private sale or other placement of
stock of AMD Inc. in the capital markets (which, for avoidance of doubt, shall
not include (i) the issuance by AMD Inc. of stock options (and/or the issuance
by AMD Inc. of stock upon the exercise of any existing or future such stock
options) to any of its or its affiliates' directors, officers and/or employees
or (ii) purchases of AMD Inc. stock by Fujitsu Limited in connection with the
Fujitsu AMD Semiconductor Limited joint venture between AMD Inc. and Fujitsu
Limited).

          "Subsidiary" means with respect to (i) any corporation organised and
existing under the laws of the Federal Republic of Germany, a subsidiary within
the meaning of the term "abhangiges Unternehmen" in ss. 17 of the German Stock
Corporation Act (Aktiengesetz); and (ii) any Person, a corporation, partnership,
limited partnership, limited liability company, trust, incorporated or
unincorporated association or other entity of which such Person or such Person
and/or such Person's other Subsidiaries own, directly or indirectly, more than
50% of the ordinary voting power for the election of directors or others
performing similar functions.

          "Subsidies" has the meaning assigned to that term in Section 6.1.

                                       24



          "Substitution" means the substitution of AMD Admin as general partner
(Komplementar) of AMD Saxonia in place of AMD Saxony LLC in accordance with the
AMD Saxonia Partnership Agreement.

          "Taxes" has the meaning assigned to that term in Section 14.5(a).

          "Technical Advisor" means Fraunhofer Institut fur Siliziumtechnologie,
Itzehoe, or such other technical advisor as may be appointed by the Security
Agent with the consent of each AMD Company, which consent shall not be
unreasonably delayed or withheld.

          "Technical Advisor's Report" means that certain report dated October
16, 1996 from the Technical Advisor to the Agent prepared for purposes of this
Agreement and the other Operative Documents and the transactions contemplated
hereby and thereby.

          "Technical Completion" shall be deemed to have occurred when:

          (i)  all of the conditions set forth in the form of Technical
               Completion Certificate (Obligors) attached to the Loan Agreement
               as Schedule 9 thereto have been satisfied in all material
               respects, all of the statements appearing in said form of
               Certificate are true and correct in all material respects, and
               the Agent shall have received a fully executed counterpart of
               such Certificate; and

          (ii) the Agent shall have received a fully executed counterpart of the
               Technical Completion Certificate (Technical Advisor).

          "Technical Completion Certificate (Obligors)" means a certificate, in
the form set out in Schedule 9 to the Loan Agreement (appropriately completed
and with the legal opinion therein referred to attached), executed by the AMD
Companies, and delivered to the Agent.

          "Technical Completion Certificates" means the Technical Completion
Certificate (Obligors) and the Technical Completion Certificate (Technical
Advisor).

          "Technical Completion Certificate (Technical Advisor)" means a
certificate, in the form set out in Schedule 10 to the Loan Agreement
(appropriately completed), executed by the Technical Advisor, and delivered to
the Agent.

          "Total Revolving Loan Commitment Amount" means $ 750,000,000 (seven
hundred and fifty million Dollars) or the "Euro Equivalent" (under, and as
defined therein) thereof, or such reduced amount as shall have been agreed upon
by each of the Sponsors, AMD Saxonia, the Agent, and the Banks.

          "Total Tranche A Commitment Amount" means DM 1,500,000,000 (one
billion five hundred million Deutsche Marks), as such amount shall be reduced by
any reductions to (but not utilizations of) the commitments of the Banks under
"Facility A" under the Loan Agreement.

          "Tranche A Advances" means Advances made by the Banks or any Bank
pursuant to "Facility A" under the Loan Agreement.

                                       25



          "Unmatured Event of Default" means an event or circumstance which,
with the giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied) constitute an Event of Default.

          "Wafer" has the meaning assigned to that term in the AMD Saxonia Wafer
Purchase Agreement.

          "Wafer Purchase Agreements" means, collectively, the AMD Saxonia Wafer
Purchase Agreement and the AMD Holding Wafer Purchase Agreement.

SECTION 1.2 Accounting and Financial Determinations. Unless otherwise specified,
all accounting terms used herein shall be interpreted, all accounting
determinations and computations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in accordance
with, GAAP. When used herein, the term "financial statements" shall include the
notes and schedules thereto, but need not include such notes or schedules when
used with reference to such statements of any Person as of any date other than
the end of a Fiscal Year of such Person. In the determination of any periods
pursuant to any provision hereof, unless otherwise specified, the term "from"
means "from (and including)", the term "to" means "to (and excluding)", and the
term "until" means "until (and excluding)".

SECTION 1.3 Construction. In this Agreement, unless the context requires
otherwise, any reference to:

          "assets" includes any asset, property, or right and includes uncalled
          capital;

          "including" or "includes" means including or includes without
          limitation;

          "law" and/or "regulation" includes any constitutional provision,
          treaty, convention, statute, act, law, decree, ordinance, subsidiary
          or subordinate legislation, order, rule, or regulation having the
          force of law, and any rule of civil or common law or equity;

          "order" includes any judgment, injunction, decree, determination, or
          award of any court, arbitration, or administrative tribunal;

          "tax" includes any tax, levy, duty, charge, impost, fee, deduction, or
          withholding of any nature now or hereafter imposed, levied, collected,
          withheld, or assessed by any taxing or other authority and includes
          any interest, penalty, or other charge payable or claimed in respect
          thereof, and "taxation" shall be construed accordingly; and

          "winding-up" includes any winding-up, liquidation, dissolution, or
          comparable process in any jurisdiction.

SECTION 1.4 Miscellaneous. In this Agreement, unless the context requires
otherwise, any reference to an Operative Document or a Project Agreement
(including, in each case, any reference thereto as being in the form set out in
a Schedule to the Loan Agreement) shall be a reference to such Document or
Agreement as it shall have been, or from time to time be,

                                       26



amended, varied, re-issued, replaced, novated or supplemented, in each case, in
accordance with its terms and this Agreement. For the avoidance of doubt, any
reference in the Agreement to stated capital (Stammkapital), capital reserves or
any other similar term relating to the capital structure of a German limited
liability company shall, following the Conversion Effective Date, be deemed to
be a reference to the capital (Haftsummen and Pflichteinlagen) or capital
reserves of a limited partnership under German law, save to the extent the
context requires otherwise.

In this Agreement, unless the context requires otherwise, (i) any statutory
provisions shall be construed as references to those provisions as amended,
modified, re-enacted, or replaced from time to time; (ii) words importing a
gender include every gender; (iii) references to Sections and Schedules are to
Sections of and Schedules to this Agreement; and (iv) references to this
Agreement include its Schedules. Section headings are inserted for reference
only and shall be ignored in construing this Agreement. A time of day, unless
otherwise specified, shall be construed as a reference to Frankfurt am Main
time.

                                   ARTICLE II
                         Contribution of Equity Capital

SECTION 2.1 Undertaking to Contribute. AMD Holding hereby undertakes to
contribute to AMD Saxonia, and AMD Inc. hereby undertakes to cause AMD Holding
to so contribute to AMD Saxonia (and AMD Inc. shall, to the extent necessary,
contribute sufficient funds, or otherwise cause sufficient funds to be made
available, to AMD Holding as shall be necessary to enable AMD Holding to so
contribute to AMD Saxonia), Equity Capital at the times and in the amounts set
forth in Section 2.2. For the avoidance of doubt:

      (i)   to the extent, but only to the extent, reflected in AMD Saxonia's
            financial statements referred to in ss. 15.1.6 of the Loan Agreement
            (or, if not so reflected, as certified by AMD Inc. to the Agent and
            the Security Agent as of the Loan Agreement Effective Date), Equity
            Capital contributed by the Sponsors to AMD Saxonia prior to the Loan
            Agreement Effective Date shall be taken into account in determining
            whether the Sponsors shall have complied with their obligations
            under this Article II;

      (ii)  the obligations of the Sponsors contained in this Article II are in
            addition to, and not in limitation of, their respective obligations
            contained elsewhere in this Agreement and in the other Operative
            Documents;

      (iii) the Sponsors shall not be relieved of the foregoing obligations by
            virtue of:

            (a) any Sponsors' Loan made by either Sponsor pursuant to this
                Agreement or the Sponsors' Loan Agreement or any Revolving Loan
                made by either Sponsor pursuant to this Agreement or the
                Revolving Loan Facility Agreement before or after the Loan
                Agreement Effective Date, including without limitation, the
                additional Sponsors' Loan in an amount of $34,000,000 made by
                AMD Inc. to AMD Saxonia on 26 September 1997 and referred to in
                Section 3.5 below; or

            (b) any payment made by either Sponsor under the Sponsors' Guaranty;
                and

                                       27






      (iv)  the amounts set forth in Section 2.2 below are minimum aggregate
            amounts of Equity Capital to be received by AMD Saxonia; nothing
            contained herein shall be deemed to preclude AMD Holding from making
            additional contributions to AMD Saxonia's stated capital or capital
            reserves in order to fulfil the obligations of the Sponsors
            contained in Article IV, V, or VI, or for any other reason.

SECTION 2.2 Time of Contribution. The Equity Capital to be contributed to AMD
Saxonia under this Article II is due and payable to AMD Saxonia as follows:

      (i)   one or more instalments aggregating DM 108,750,000 (one hundred
            eight million seven hundred fifty thousand Deutsche Marks) on or
            before the date of the initial Advance under the Loan Agreement; it
            being understood and agreed that, to the extent, but only to the
            extent, reflected in AMD Saxonia's financial statements referred to
            in ss. 15.1.6 of the Loan Agreement (or, if not so reflected, as
            certified by AMD Inc. to the Agent and the Security Agent as of the
            Loan Agreement Effective Date), all contributions to the Equity
            Capital of AMD Saxonia prior to Loan Agreement Effective Date shall
            be considered contributions to its Equity Capital for purposes of
            this Section 2.2(i); and

      (ii)  in addition to the Equity Capital contributed or to be contributed
            pursuant to Section 2.2(i) hereof, one or more additional
            instalments aggregating DM 108,750,000 (one hundred eight million
            seven hundred fifty thousand Deutsche Marks) by the earlier to occur
            of:

            (a) the acceleration of the Advances under the Loan Agreement
                following the occurrence of an Event of Default (it being
                understood and agreed that if, at the time of any such
                acceleration, the Primary Secured Obligations are less than the
                amount otherwise required to be contributed to AMD Saxonia under
                this Section 2.2(ii), such contribution shall be made in an
                amount which, when added to the aggregate amount of all
                Sponsors' Loans and/or other contributions to AMD Saxonia's
                Equity Capital or capital reserves then concurrently made, is
                equal to the Primary Secured Obligations at such time); and

            (b) December 31 1997;

            provided, however, that such Equity Capital shall be required to be
            contributed in whole or in part at any time prior to such dates if,
            but only to the extent that, the ratio of:

                (x)  the sum of

                     (1) the then aggregate outstanding principal amount of
                         Sponsors' Loans,

                     plus

                                       28



                      (2) the then aggregate amount of AMD Saxonia's Equity
                          Capital and capital reserves,

                      to

                (y)   the then aggregate outstanding principal amount of the
Advances, is less than 25:75.

SECTION 2.3 Form of Contribution. The Equity Capital under this Article II shall
be contributed in cash and in Same Day Funds to AMD Saxonia.

                                  ARTICLE III
                                 Sponsors' Loans

SECTION 3.1 Undertaking to Make Class A and Class C Sponsors' Loans. The
Sponsors, jointly and severally, hereby undertake that either Sponsor or both of
the Sponsors will make Sponsors' Loans to AMD Saxonia:

      (i)   in an aggregate principal amount of at least DM 290,000,000 (two
            hundred ninety million Deutsche Marks) for all such Sponsors' Loans,
            the exact amount thereof being equal to the Deutsche Mark Equivalent
            of $200,000,000 (two hundred million Dollars) for all such Sponsors'
            Loans, as contemplated by Section 3.2 (the "Class A Sponsors'
            Loans");

      (ii)  [left intentionally blank]

      (iii) in an aggregate principal amount of $70,000,000 (seventy million
            Dollars) as contemplated by Section 3.4 (the "Class C Sponsors'
            Loans").

For the avoidance of doubt:

      (i)   the obligations of the Sponsors under the Sponsors' Loan Agreement
            are intended to reflect, rather than to be in addition to, the
            obligations of the Sponsors pursuant hereto;

      (ii)  with the exception of the additional Sponsors' Loan in an amount of
            $34,000,000 made by AMD Inc. to AMD Saxonia on 26 September 1997 and
            referred to in Section 3.5 below, Sponsors' Loans and/or
            contributions (to the extent, but only to the extent, not otherwise
            taken into account in determining whether AMD Holding has complied
            with its obligations under Article II) by AMD Holding to AMD
            Saxonia's capital reserves made to AMD Saxonia prior to the Loan
            Agreement Effective Date shall be taken into account, to the extent,
            but only to the extent, reflected in AMD Saxonia's financial
            statements referred to in ss.15.1.6 of the Loan Agreement (or, if
            not so reflected, as certified by AMD Inc. to the Agent and the
            Security Agent as of the Loan Agreement Effective Date) as Class A
            Sponsors' Loans in determining whether the Sponsors shall have
            complied with their obligations under this Article III;

                                       29








      (iii)  although the obligations of the Sponsors contained in this Article
             III are in addition to, and not in limitation of, their respective
             obligations contained elsewhere in this Agreement and in the other
             Operative Documents, if the Agent shall have otherwise expressly
             consented thereto in writing (which consent will not be
             unreasonably withheld or delayed), the Sponsors shall be deemed to
             have complied with their obligations to make Class A Sponsors'
             Loans and/or Class C Sponsors' Loans to the extent, but only to the
             extent, that AMD Holding shall have made additional contributions
             to AMD Saxonia's Equity Capital (or other contribution to AMD
             Saxonia's capital reserves) which contributions are not otherwise
             required to be made pursuant hereto or to any other Operative
             Document;

      (iv)   the Sponsors shall not be relieved:

             (a)  of the foregoing obligation by virtue of any Equity Capital
                  (or other contribution to AMD Saxonia's capital reserves)
                  contributed or required to be contributed to AMD Saxonia
                  pursuant to Section 2.1 or (except as, and to the extent,
                  provided in clause (iii) above) otherwise;

             (b)  of any obligation to make Class A Sponsors' Loans (or to
                  contribute additional Equity Capital or other contributions to
                  AMD Saxonia's capital reserves in lieu thereof) by virtue of
                  any payment made by either Sponsor under the Sponsors'
                  Guaranty;

             (c)  [left intentionally blank]

             (d)  of any obligation to make Class A Sponsors' Loans or Class C
                  Sponsors' Loans by the additional Sponsors' Loans in an amount
                  of $34,000,000 made by AMD Inc. to AMD Saxonia on 26 September
                  1997 and referred to in Section 3.5 below;

      (v)    each Class A Sponsors' Loan shall be denominated in Deutsche Marks
             and the Deutsche Mark Equivalent thereof shall be calculated for
             the purpose of determining whether the Sponsors have complied with
             their obligations under Section 3.2; provided, however, that any
             Class A Sponsors' Loan may, with the consent of the Agent (such
             consent not to be unreasonably delayed or withheld), be funded in
             Dollars but for all purposes of this Agreement and the Sponsors'
             Loan Agreement shall be deemed to have been funded in Deutsche
             Marks in an amount which is equal to the Deutsche Mark Equivalent
             thereof;

      (vi)   Class C Sponsors' Loans may be made in either Dollars or in
             Deutsche Marks at AMD Inc.'s option provided that:

             (a)  for the purpose of determining whether the Sponsors have
                  complied with their obligations under Section 3.4, any Class C
                  Sponsors' Loans made in Deutsche Marks shall be deemed
                  converted to Dollars at the Agent's spot rate of exchange for
                  the purchase of Dollars with Deutsche Marks

                                       30



                  prevailing on the date two (2) Business Days prior to the date
                  such Class C Sponsors' Loans were made;

             (b)  if AMD Inc. and AMD Saxonia agree, any Class C Sponsors' Loans
                  may be denominated in Deutsche Marks but funded in Dollars and
                  the Deutsche Mark amount of such Class C Sponsors' Loans shall
                  be deemed to be the DM amount which is the equivalent of the
                  Dollar amount so funded determined at the Agent's spot rate of
                  exchange for the purchase of Dollars with Deutsche Marks
                  prevailing on the date two (2) Business Days prior to the date
                  such Class C Sponsors' Loans were made.

      (vii)  the Sponsors shall be relieved of their respective obligations to
             make Class C Sponsors' Loans under Sections 3.1 and 3.4 if, but
             only if:

             (a)  the Sponsors shall have complied with each of their respective
                  obligations under Article II and, insofar as such obligations
                  relate to Class A Sponsors' Loans (or additional contributions
                  to Equity Capital or AMD Saxonia's capital reserves in lieu
                  thereof), this Article III; and

             (b)  following a demand for payment by the Agent under the
                  Sponsors' Guaranty, the Sponsors shall have paid all amounts
                  payable under the Sponsors' Guaranty.

      (viii) the amounts set forth in this Section 3.1 are cumulative minimum
             aggregate amounts for both Sponsors, collectively; nothing
             contained herein shall be deemed to preclude the Sponsors (or
             either of them) from making additional Sponsors' Loans in order to
             fulfil their respective obligations contained in Article IV, V, or
             VI, or for any other reason.

SECTION 3.2 Time of Class A Sponsors' Loans. The Class A Sponsors' Loans will be
made in cash and in Same Day Funds and will be made as follows:

      (i)    at least DM 145,000,000 (one hundred forty five million Deutsche
             Marks) for all such Class A Sponsors' Loans, the exact amount
             thereof being equal to the Deutsche Mark Equivalent of $100,000,000
             (one hundred million Dollars) for all such Class A Sponsors' Loans,
             by the earlier to occur of:

             (a)  the acceleration of the Advances under the Loan Agreement
                  following the occurrence of an Event of Default (it being
                  understood and agreed that if, at the time of any such
                  acceleration, the Primary Secured Obligations are less than
                  the amount otherwise required to be lent to AMD Saxonia under
                  this Section 3.2(i), the amount of such Class A Sponsors'
                  Loans shall be an amount which, when added to the aggregate
                  amount of all Sponsors' Loans and/or other contributions to
                  AMD Saxonia's Equity Capital or capital reserves then
                  concurrently made, is equal to the Primary Secured Obligations
                  at such time); and

             (b)  December 31, 1998; and

                                       31



      (ii)  at least a further DM 145,000,000 (one hundred forty five million
            Deutsche Marks) for all such Class A Sponsors' Loans, the exact
            amount thereof being equal to the Deutsche Mark Equivalent of
            $100,000,000 (one hundred million Dollars) for all such Class A
            Sponsors' Loans, by the earlier to occur of:

            (a)   the acceleration of the Advances under the Loan Agreement
                  following the occurrence of an Event of Default (it being
                  understood and agreed that if, at the time of any such
                  acceleration, the Primary Secured Obligations are less than
                  the amount otherwise required to be lent to AMD Saxonia under
                  this Section 3.2(ii), the amount of such Class A Sponsors'
                  Loans shall be an amount which, when added to the aggregate
                  amount of all Sponsors' Loans and/or other contributions to
                  AMD Saxonia's Equity Capital or capital reserves then
                  concurrently made, is equal to the Primary Secured Obligations
                  at such time); and

            (b)   December 31, 1999;

      provided, however, that such Class A Sponsors' Loans shall be required to
      be made in whole or in part at any time prior to the aforesaid dates if,
      but only to the extent that, the ratio of:

                  (x)  the sum of

                       (1) the then aggregate outstanding principal amount of
                           Sponsors' Loans,

                  plus

                       (2) the then aggregate amount of AMD Saxonia's Equity
                           Capital and capital reserves,

                  to

                  (y)  the then aggregate outstanding principal amount of the
                       Advances under the Loan Agreement, is less than 25:75.

SECTION 3.3 [left intentionally blank]

SECTION 3.4 Time of Class C Sponsors' Loans. The Class C Sponsors' Loans will be
made in cash and in Same Day Funds and will be made in full, pursuant to Section
4.07 of the AMD Inc. Senior Secured Note Indenture (prior to giving effect to
the Third Supplemental Indenture dated as of July 28, 2000), without utilizing
any of the provisions contained in the first proviso to Section 4.07(iv)
thereof, by the Contribution Date at the latest.

SECTION 3.5 Additional Sponsors' Loans. In addition to the Class A Sponsors'
Loans and the Class C Sponsors' Loans, the Sponsors (or either of them) may,
from time to time, at their

                                       32









option make additional Sponsors' Loans in order to fulfil their respective
obligations contained herein or otherwise to provide additional funds to AMD
Saxonia.

For the avoidance of doubt, the additional Sponsors' Loan in an amount of
$34,000,000 made by AMD Inc. to AMD Saxonia on 26 September 1997:

         (i)   is hereby expressly agreed by the parties hereto to be an
               additional Sponsors' Loan pursuant to the terms of this Section
               3.5 and subordinated as a Junior Liability (under, and as defined
               in, the Sponsors' Subordination Agreement); and

         (ii)  shall not relieve the Sponsors from any obligation to make Class
               A Sponsors' Loans or Class C Sponsors' Loans in accordance with
               Sections 3.2, and 3.4 above respectively.

SECTION 3.6 Terms of Sponsors' Loans. The making of Sponsors' Loans will be made
on the terms, and shall be subject to the conditions, contained in the Sponsors'
Loan Agreement which, as provided in Section 3.1, is intended to reflect, rather
than to be in addition to, the obligations of the Sponsors contained in this
Article III.

SECTION 3.7 Undertaking to Make Revolving Loans/Terms of Revolving Loans. The
Sponsors hereby jointly and severally undertake that either Sponsor or both
Sponsors will make available to AMD Saxonia an unsecured, subordinated revolving
loan facility in an aggregate principal amount of $750,000,000 (seven hundred
fifty million Dollars) with a term of no earlier than 31 March, 2007 and bearing
interest at a rate per annum of 4%, on and subject to the terms and conditions
contained in the Revolving Loan Facility Agreement, which is intended to
reflect, rather than to be in addition to, the obligations of the Sponsors
contained in this Article III, to the extent applicable to Revolving Loans.

SECTION 3.8 Time of Revolving Loans. Revolving Loans will be made in cash and in
Same Day Funds:

         (i)   in such amounts as shall be required from time to time to ensure
               that as from 1 July 2001, the Minimum Liquidity Covenant is
               complied with at all times and, in any event, upon first written
               demand by the Security Agent at any time and from time to time
               immediately following a Minimum Liquidity Covenant Calculation
               Date in such amounts as may be necessary to remedy any shortfall
               in the Minimum Liquidity Covenant at any time and from time to
               time; and

         (ii)  in such amounts as shall be required from time to time and, in
               any event, upon the first written demand of AMD Saxonia at any
               time and from time to time to finance AMD Saxonia's general
               corporate funding requirements, including working capital, cash
               expenses and other capital requirements of AMD Saxonia.

The Sponsors shall be relieved of their respective obligations to make Revolving
Loans available to AMD Saxonia if, but only if:

         (x)   the Sponsors shall have complied with each of their respective
               obligations under Article II and, insofar as such obligations
               relate to Class A Sponsors' Loans (or

                                       33



               additional contributions to Equity Capital or AMD Saxonia's
               capital reserves in lieu thereof), this Article III; and

         (y)   following a demand for payment by the Agent under the Sponsors'
               Guaranty, the Sponsors shall have paid all amounts payable under
               the Sponsors' Guaranty.

In addition to the Revolving Loans contemplated to be made under Section 3.7,
the Sponsors (or either of them) may, from time to time, at their option make
additional Revolving Loans in order to fulfil their respective obligations
contained herein or otherwise to provide additional funds to AMD Saxonia, it
being expressly understood and agreed that any such Revolving Loans shall be
optional rather than compulsory, and that in no event shall the Sponsors (or
either of them) be obligated to advance Revolving Loans such that the total
amount of outstanding Revolving Loans would exceed the Total Revolving Loan
Commitment Amount.

SECTION 3.9 Subordination of Sponsors' Loans and Revolving Loans. The Sponsors'
Loans and the Revolving Loans will be subordinated on the terms and conditions
contained in the Sponsors' Subordination Agreement.

                                   ARTICLE IV
                                  Project Costs

SECTION 4.1 Project Costs. In addition to, and not in limitation of, their other
obligations contained in this Agreement and the other Operative Documents, the
Sponsors, jointly and severally, hereby undertake to provide AMD Saxonia with
Same Day Funds (whether, in the case of AMD Holding, by contribution to AMD
Saxonia's Equity Capital (or other contributions to AMD Saxonia's capital
reserves), or, in the case of either Sponsor, through Sponsors' Loans or
Revolving Loans) sufficient to cover all Project Costs (after taking into
account the Available Tranche A Amount). The Sponsors shall be relieved of any
further obligations under this Article IV if, but only if:

         (i)   the Sponsors shall have complied with each of their respective
               obligations under Article II and, insofar as such obligations
               relate to Class A Sponsors' Loans (or additional contributions to
               Equity Capital or AMD Saxonia's capital reserves in lieu
               thereof), Article III; and

         (ii)  following a demand by the Agent for payment under the Sponsors'
               Guaranty, the Sponsors shall have paid all amounts payable under
               the Sponsors' Guaranty.

SECTION 4.2 [left intentionally blank]

SECTION 4.3 Form of Contribution. The Sponsors may comply with their respective
obligations under this Article IV by making:

         (i)   in the case of either Sponsor, Revolving Loans pursuant to the
               terms and conditions of the Revolving Loan Facility Agreement;
               and/or

         (ii)  in the case of AMD Holding, a cash increase in the Equity Capital
               (or other contributions to AMD Saxonia's capital reserves) of AMD
               Saxonia; and/or

                                       34



         (iii) in the case of either Sponsor, further Sponsors' Loans to AMD
               Saxonia.

SECTION 4.4 No Double Recovery under Revolving Loan Facility Agreement and
Sponsors' Guaranty. If, during the continuance of an Event of Default (unless
such Event of Default is subsequently cured or waived with the concurrence of
the Agent or the Security Agent, AMD Inc., and AMD Saxonia), and following the
exercise of rights by the Agent or the Security Agent under either the AMD
Holding Share Pledge Agreement, the AMD Inc. Share Pledge Agreement, the AMD
Saxonia Assignment (U.S.A.), the AMD Inc. Pledge Agreement Over Membership
Interests in AMD Saxony LLC, the AMD Holding Share Pledge Agreement (AMD Admin),
the AMD Saxony LLC Partnership Interest Pledge Agreement (AMD Saxonia), the AMD
Holding KG Partnership Interest Pledge Agreement (AMD Saxonia) or the AMD Admin
Partnership Interest Pledge Agreement (AMD Saxonia), the Agent seeks to make
borrowings under, or to cause such borrowings to be made under, the Revolving
Loan Facility Agreement, the Agent's right to make such borrowings or to cause
such borrowings to be made, shall be limited mutatis mutandis to the amount set
forth in Section 2.1 of the Sponsors' Guaranty and any such borrowings (to the
extent paid to AMD Saxonia and not subsequently repaid to AMD Inc. or its
successor in interest) shall, pro tanto, reduce the amount available to be
recovered from the Sponsors under the Sponsors' Guaranty.

                                   ARTICLE V
                               Completion Guaranty

SECTION 5.1 Completion Guaranty. The Sponsors (jointly and severally), hereby
agree to cause AMD Saxonia:

         (i)   to complete each Project Phase as soon as contemplated by the
               Approved Project Schedule (it being understood and agreed that
               the completion date for one or more Project Phases (other than
               the final Project Phase) may be deferred for up to six (6) months
               in the aggregate for all such deferrals on a cumulative basis
               provided that no such deferral may affect the final deadline for
               Completion);

         (ii)  to achieve Completion as soon as contemplated by the Approved
               Project Schedule and, in any event, on or before 31 December
               2000; and

         (iii) to take all such action, including, without limitation, all
               actions before Governmental Authorities, as shall be necessary or
               appropriate to enable AMD Saxonia to complete each Project Phase
               and to achieve Completion as aforesaid.

For the avoidance of doubt, the obligations of the Sponsors contained in this
Article V are in addition to, and not in limitation of, their respective
obligations contained elsewhere in this Agreement and in the other Operative
Documents; provided, however, that the Sponsors shall be relieved of their
respective obligations under this Article V if, but only if:

         (i)   the Sponsors shall have complied with each of their respective
               obligations under Article II and, insofar as such obligations
               relate to Class A Sponsors' Loans (or additional contributions to
               Equity Capital or AMD Saxonia's capital reserves in lieu
               thereof), Article III and

                                       35



         (ii)  following a demand for payment by the Agent under the Sponsors'
               Guaranty, the Sponsors shall have paid all amounts payable under
               the Sponsors' Guaranty.

SECTION 5.2 Notice of Scheduled Project Phase Technical Completion and
Completion. Upon the occurrence of each of the following, the Agent shall
promptly advise the Sponsors, AMD Saxonia, and the Banks thereof:

         (i)   Scheduled Project Phase Technical Completion for each Project
               Phase, and

         (ii)  Completion.

SECTION 5.3 No Double Recovery Under Article V and Sponsors' Guaranty. In the
event that the Sponsors default in the payment and performance of their
obligations under this Article V and, following any such default, the Agent
institutes litigation or other adversary proceedings designed to compel the
Sponsors to perform such obligations or to pay damages for such failure, the
right of recovery against the Sponsors under this Article V is limited mutatis
mutandis to the amount set forth in Section 2.1 of the Sponsors' Guaranty and
any recovery by the Agent from the Sponsors hereunder shall, pro tanto, reduce
the amount available to be recovered from the Sponsors under the Sponsors'
Guaranty.

For the avoidance of doubt, the obligations of the Sponsors under this Section
5.1 constitute a primary guarantee obligation (Garantievertrag) and not a surety
guarantee (Burgschaft).

                                   ARTICLE VI
                              Subsidies Undertaking

SECTION 6.1 Subsidies. The Project will be supported by the following subsidies
and grants from the Free State of Saxony (hereinafter, the "Subsidies"):

         (i)   a dedicated purpose investment grant in an aggregate amount of DM
               476,687,000 (four hundred seventy six million six hundred eighty
               seven thousand Deutsche Marks) which, together with the
               investment subsidies in an aggregate amount of DM 23,813,000
               (twenty three million eight hundred thirteen thousand Deutsche
               Marks), totals an aggregate amount of DM 500,500,000 (five
               hundred million five hundred thousand Deutsche Marks); and

         (ii)  a dedicated purpose interest subsidy in an amount of DM
               300,000,000 (three hundred million Deutsche Marks),

which, in each case, will be paid to AMD Saxonia by Dresdner Bank AG in Dresden,
in its capacity as house bank.

SECTION 6.2 Payment of Shortfall. The granting of the Subsidies is contingent on
the adherence by the Sponsors and AMD Saxonia to particular conditions,
requirements, and covenants. If, for any reason whatsoever, any AMD Company or
any Affiliate of any AMD Company breaches any such conditions, requirements, or
covenants, and, accordingly, causes the Subsidies not to be paid or, as a result
of any such breach, the Subsidies are required to be repaid

                                       36



(in either such case the amount thereof being hereinafter called a "Shortfall"),
then, without delay following its or their receipt of a demand therefor by the
Agent, either:

         (i)   AMD Holding shall contribute Equity Capital (or other
               contributions to AMD Saxonia's capital reserves) to AMD Saxonia,
               and AMD Inc. shall cause AMD Holding to so contribute to AMD
               Saxonia (and AMD Inc. shall, to the extent necessary, contribute
               sufficient funds, or otherwise cause sufficient funds to be made
               available, to AMD Holding as shall be necessary to enable AMD
               Holding to so contribute to AMD Saxonia); and/or

         (ii)  one or both Sponsors shall make Sponsors' Loans to AMD Saxonia,

in either case in an aggregate amount (and, if the Subsidies have not yet been
provided, as and when the Subsidies, but for such breach, would have otherwise
been provided) equal to the Shortfall.

For the avoidance of doubt:

         (i)   the obligations of the Sponsors contained in this Article VI are
               in addition to, and not in limitation of, their obligations
               contained elsewhere in this Agreement and in the other Operative
               Documents, and shall survive Completion; and

         (ii)  the Sponsors shall not be relieved of the foregoing obligations
               by virtue of:

               (a) any prior Sponsors' Loans made by the Sponsors (or either of
                   them), including without limitation, the additional Sponsors'
                   Loan in an amount of $34,000,000 made by AMD Inc. to AMD
                   Saxonia on 26 September 1997 and referred to in Section 3.5
                   above and the Class C Sponsors' Loan in an amount of
                   $70,000,000 made by AMD Inc. to AMD Saxonia on 30 June 1999
                   and referred to in Section 3.4 above;

               (b) any prior contributions of Equity Capital (or other
                   contributions to AMD Saxonia's capital reserves) by AMD
                   Holding;

               (c) any prior Revolving Loans made by the Sponsors (or either of
                   them); or

               (d) any payment made by either Sponsor under the Sponsors'
                   Guaranty;

provided, however, that the Sponsors shall have no liability as aforesaid in
respect of any Subsidies which fail to be provided at any time after the
foreclosure by the Security Agent upon any security provided by the Security
Documents, unless such failure is attributable to any such breach by AMD Inc. or
any of its Affiliates (other than AMD Saxonia or AMD Holding, if then Affiliates
of AMD Inc.) occurring after such foreclosure.

SECTION 6.3 Bridging of AMD Saxonia's Receipt of the Subsidies.

               (a) It is understood and agreed that the Sponsors (jointly and
                   severally) will, in the case of AMD Holding, contribute
                   Equity Capital (or other

                                       37



                    contributions to AMD Saxonia's capital reserves), or, in the
                    case of either Sponsor, make Sponsors' Loans, to AMD
                    Saxonia, in either case as and to the extent that AMD
                    Saxonia requires such funds prior to and in anticipation of
                    its receipt of the Subsidies. If any such contribution or
                    Sponsors' Loan is made for such purpose prior to AMD
                    Saxonia's receipt of the Subsidies (or any portion thereof)
                    then, to the extent that AMD Saxonia subsequently receives
                    the proceeds of such Subsidies, and provided that no Event
                    of Default, Unmatured Event of Default or Event of
                    Termination shall have occurred and be continuing, AMD
                    Saxonia shall, to the extent permitted by applicable law,
                    repay Sponsors' Loans to the extent of the aggregate amount
                    of the proceeds of the Subsidy so received, but without
                    interest.

               (b)  The Sponsors' obligations to make contributions or loans
                    under Section 6.3 (a) shall terminate from the date of any
                    foreclosure over the shares of AMD Holding, the membership
                    interests of AMD Saxony LLC, the shares in AMD Admin or over
                    the partnership interests in AMD Saxonia under the Security
                    Documents.

                                  ARTICLE VII
                             Pari Passu Undertaking

SECTION 7.1     [left intentionally blank]

                                  ARTICLE VIII
                               Security Documents

SECTION 8.1     AMD Inc. Share Pledge Agreement and AMD Inc. Pledge Agreement
Over Membership Interests in AMD Saxony LLC. AMD Inc. has granted a first
priority security interest in the AMD Inc. Security pursuant to and on the terms
and conditions set forth in the AMD Inc. Share Pledge Agreement and the AMD Inc.
Pledge Agreement Over Membership Interests in AMD Saxony LLC.

SECTION 8.2     AMD Holding Security Documents. AMD Holding has granted a first
priority security interest in the AMD Holding Security pursuant to and on the
terms and conditions set forth in the AMD Holding Security Documents.

SECTION 8.3     AMD Saxony LLC Security Documents. AMD Saxony LLC has granted a
first priority security interest in the AMD Saxony LLC Security pursuant to and
on the terms and conditions set forth in the AMD Saxony LLC Security Documents.

SECTION 8.4     AMD Admin Security Documents. AMD Admin has granted a first
priority security interest in the AMD Admin Security pursuant to and on the
terms and conditions set forth in the AMD Admin Security Documents.

                                       38



                                   ARTICLE IX
                               Sponsors' Guaranty

SECTION 9.1    Sponsors' Guaranty. Without intending to derogate from the
provisions of the Sponsors' Guaranty (and, in the event of any inconsistency
with this Section 9.1, the Sponsors' Guaranty shall prevail), the Sponsors
(jointly and severally), have agreed to guarantee, on the terms and subject to
the conditions of the Sponsors' Guaranty, the full and prompt payment when due,
whether by acceleration or otherwise, of all Secured Obligations of AMD Saxonia
to the Secured Parties under or in connection with the Financing Documents and
the Security Documents; provided, however, that as provided in the Sponsors'
Guaranty, the cumulative right of recovery against the Sponsors with respect to
the Sponsors' Guaranty is limited to an amount equal to the greater of:

       (x)   thirty five percent (35%) of the aggregate amount of all Guaranteed
             Obligations (as defined in the Sponsors' Guaranty); and

       (y)   DM 217,500,000 (two hundred and seventeen million five hundred
             thousand Deutsche Marks),

plus (as and to the extent provided in the Sponsors' Guaranty) interest on such
amount, if not paid when due, and plus costs and expenses of enforcement
provided, that the maximum aggregate amount payable by the Sponsors pursuant to
the Sponsors' Guaranty shall be DM 600,000,000. In furtherance of the foregoing,
the Sponsors have undertaken, pursuant to the terms of the Sponsors' Guaranty,
to pay to the Agent, upon first written demand following the occurrence of an
Event of Default and acceleration of the Advances an amount equal to the greater
of:

       (i)   thirty five percent (35%) of the aggregate amount of all Guaranteed
             Obligations (as defined in the Sponsors' Guaranty); and

       (ii)  DM 217,500,000 (two hundred and seventeen million five hundred
             thousand Deutsche Marks),

plus (as and to the extent provided in the Sponsors' Guaranty) interest on such
amount, if not paid when due, and plus costs and expenses of enforcement
provided, that the maximum aggregate amount payable by the Sponsors pursuant to
the Sponsors' Guaranty shall be DM 600,000,000.

For the avoidance of doubt, the obligations of the Sponsors under the Sponsors'
Guaranty:

       (i)   constitute a primary guarantee obligation (Garantievertrag) and not
             a surety guarantee (Burgschaft), and are in addition to, and not in
             limitation of, the other obligations of the Sponsors hereunder and
             under the other Operative Documents; and

       (ii)  are continuing obligations and shall remain in full force and
             effect until whichever is the earlier of (1) satisfaction in full
             of all Secured

                                       39



               Obligations and (2) payment in full by either Sponsor of all
               amounts payable under the Sponsors' Guaranty.

                                   ARTICLE X
       Sponsors' Subordination Agreement; AMD Inc. Subordination Agreement

SECTION 10.1 Sponsors' Subordination Agreement. The Sponsors and the Additional
Partner Companies hereby agree to subordinate the payment of the Junior
Liabilities (under, and as defined in, the Sponsors' Subordination Agreement) to
the payment in full of all Senior Liabilities (under, and as defined in, the
Sponsors' Subordination Agreement), on the terms and subject to the conditions
of the Sponsors' Subordination Agreement.

SECTION 10.2 AMD Inc. Subordination Agreement. AMD Inc. hereby agrees to
subordinate the payment of the Junior Liabilities (under, and as defined in, the
AMD Inc. Subordination Agreement) to the payment in full of all Senior
Liabilities (under, and as defined in, the AMD Inc. Subordination Agreement), on
the terms and subject to the conditions of the AMD Inc. Subordination Agreement.

                                   ARTICLE XI
                            Obligations Unconditional

SECTION 11.1 Absolute and Unconditional Nature of Obligations. The obligation of
the Sponsors and the Additional Partner Companies to perform their respective
obligations under this Agreement, and the right of AMD Saxonia or the Agent or
the Security Agent, as applicable, to receive the proceeds of each payment to be
made to or for the account of AMD Saxonia as provided herein and in each of the
other Operative Documents, shall be absolute, irrevocable, and unconditional, it
being the intention of the parties hereto that all obligations of the Sponsors
and the Additional Partner Companies under or in connection with this Agreement
shall be paid and performed in all events in the manner and at the times herein
provided, irrespective of and without prejudice to, in particular, any rights or
remedies that are available to the other parties hereto and thereto under any
agreements or any applicable laws. The Sponsors and the Additional Partner
Companies shall be entitled to setoff, and to raise rights of retention, in
respect of their respective payment claims hereunder and under the other
Operative Documents only to the extent their respective counterclaims are
undisputed or have been the subject of a final binding arbitral or court
decision.

                                  ARTICLE XII
                         Representations and Warranties

SECTION 12.1 Representations and Warranties of AMD Inc. AMD Inc. hereby
represents and warrants to the Agent and the Security Agent as follows:

          (i)  Organization; Corporate Power.

               AMD Inc. and each Material AMD Inc. Subsidiary:

               (a)  is a corporation, limited partnership or limited liability
                    company, as the case may be, duly organized, validly
                    existing, and (where the concept has

                                       40



                  a technical meaning) in good standing under the laws of the
                  jurisdiction of its incorporation;

            (b)   is duly qualified or licensed and (where the concept has a
                  technical meaning) in good standing as a foreign corporation
                  authorized to do business in each other jurisdiction where,
                  because of the nature of its activities or properties in such
                  jurisdiction, such qualification or licensing is required,

            (c)   has all requisite corporate power and authority to own,
                  operate, and lease its assets and properties and to carry on
                  the business in which it is engaged and in which it proposes
                  to engage;

            (d)   that is an AMD Company, has all requisite corporate power and
                  authority:

                  (x)   to execute, deliver, and perform its obligations under
                        each of the Operative Documents to which it is a party;
                        and

                  (y)   to assign, and grant a security interest in, the
                        Security in the manner and for the purpose contemplated
                        by the Security Documents to which it is a party; and

            (e)   is in compliance with all Requirements of Law

            except, in each case referred to in clause (b), (c), or (e), to the
            extent that the failure to do so could not reasonably be expected to
            have a Material Adverse Effect.

     (ii)   Corporate Authority; No Conflict.

            The execution, delivery, and performance by each AMD Company of each
            Operative Document to which any such AMD Company is a party, and the
            grant by such AMD Company of a security interest in the Security in
            the manner and for the purpose contemplated by the Security
            Documents to which such AMD Company is a party, have been duly
            authorised by all necessary corporate action (including any
            necessary shareholder action) on the part of such AMD Company, and
            do not:

            (a)   violate any provision of any law, rule, regulation, order,
                  writ, judgment, injunction, decree, determination, or award
                  presently in effect binding on such AMD Company, or of the
                  Organizational Documents of such AMD Company;

            (b)   result in a breach of, result in a mandatory prepayment or
                  acceleration of indebtedness evidenced or secured by, or
                  constitute a default under, any indenture or loan or credit
                  agreement, or any other agreement or

                                       41



                  instrument, to which such AMD Company is a party or by which
                  such AMD Company or its properties are bound; or

            (c)   result in, or require (in either case except as contemplated
                  by the Operative Documents), the creation or imposition of any
                  Encumbrance of any nature upon or with respect to any of the
                  properties now owned or hereafter acquired by any of the AMD
                  Companies (other than any right of set-off or banker's lien or
                  attachment that the Agent, the Security Agent, or any Bank may
                  have under the Operative Documents or applicable law), and
                  none of the AMD Companies is in default under or in violation
                  of its Organizational Documents, any of the Operative
                  Documents to which it is a party, or any such law, rule,
                  regulation, order, writ, judgment, injunction, decree,
                  determination, award, indenture, agreement, or instrument,
                  which default or violation, individually or in the aggregate,
                  could reasonably be expected to have a Material Adverse
                  Effect.

     (iii)  Valid and Binding Obligations.

            Each Operative Document which has been executed and delivered by an
            AMD Company constitutes the legal, valid, and binding obligation of
            such AMD Company, enforceable against such AMD Company in accordance
            with its respective terms, subject, however, to the Opinion
            Reservations.

     (iv)   Sponsor Security Documents.

            (a)   The provisions of each of the Security Documents which has
                  been executed and delivered by a Sponsor are effective to
                  create in favor of the Security Agent for the benefit of the
                  Secured Parties, a legal, valid, and enforceable first
                  priority Encumbrance on all rights, title, and interest of
                  such Sponsor in the Security described therein, subject only
                  to Permitted Encumbrances; and all necessary filings and
                  recordings have been made in the requisite offices in all of
                  the jurisdictions necessary or appropriate to perfect or
                  continue perfected with such priority such Encumbrance on such
                  Security.

            (b)   Each Security Document which has been executed and delivered
                  by a Sponsor is effective to grant to the Security Agent a
                  legal, valid, and enforceable security interest on all rights,
                  title, and interest of the relevant Sponsor in the Security
                  described therein. When each such Security Document is duly
                  recorded or filed in the applicable recording or filing
                  office(s), if any, and the recording or filing fees and taxes,
                  if any, in respect thereof are paid and compliance is
                  otherwise had with the formal requirements of applicable law
                  applicable to the recording and filing of security
                  documentation generally, such Security is subject to a legal,
                  valid, enforceable, and perfected first priority Encumbrance.

                                       42



          (v)   Financial Information; No Material Adverse Change.

                (a)   The audited consolidated balance sheet of AMD Inc. and its
                      Subsidiaries dated December 31, 1995, the unaudited
                      consolidated balance sheet of AMD Inc. and its
                      Subsidiaries for the Fiscal Quarter ending on or about
                      December 30, 1996, and in each case the related
                      consolidated statements of income or operations,
                      shareholders' equity and cash flows for the fiscal period
                      ended on such dates:

                      (x)   were prepared in accordance with GAAP consistently
                            applied throughout the period covered thereby,
                            except as otherwise expressly noted therein, subject
                            to ordinary, good faith year-end audit adjustments,
                            in the case of quarterly financial statements;

                      (y)   are complete and accurate in all material respects
                            and fairly present the consolidated financial
                            condition of AMD Inc. and its Subsidiaries as of the
                            dates thereof and results of operations and cash
                            flows for the periods covered thereby; and

                      (z)   except as specifically disclosed in the Disclosure
                            Schedules, show all material indebtedness and other
                            liabilities, direct or contingent, of AMD Inc. and
                            its consolidated Subsidiaries as of the date
                            thereof, including liabilities for taxes, material
                            commitments, and Contingent Liabilities.

                (b)   Since December 31, 1995, there has been no Material
                      Adverse Effect, except as may be specifically disclosed in
                      the Disclosure Schedules.

                (c)   From July 13, 1999 to and including the effective date of
                      the Third Amendment to this, there has been no "Enhanced
                      Covenant Period" (under, and as defined in the AMD Inc.
                      1999 Loan and Security Agreement) in effect.

          (vi)  Litigation.

                Except as specifically disclosed in the Disclosure Schedules,
                there are no actions, suits, proceedings, claims, or disputes
                pending, or to the best knowledge of AMD Inc., threatened or
                contemplated, at law, in equity, in arbitration or before any
                Governmental Authority, against any AMD Company or any other
                Subsidiary of AMD Inc. or any of their respective properties
                which:

                (a)   purport to affect or pertain to this Agreement or any
                      other Operative Document, or the entirety of the
                      transactions contemplated hereby or thereby; or

                (b)   if determined adversely to such AMD Company or such other
                      Subsidiary, would reasonably be expected to have a
                      Material Adverse Effect.

                                       43



                  No injunction, writ, temporary restraining order, or any order
                  of any nature has been issued by any court or other
                  Governmental Authority purporting to enjoin or restrain the
                  execution, delivery, or performance of this Agreement or any
                  other Operative Document, or directing that the transactions
                  provided for herein or therein not be consummated as herein or
                  therein provided.

          (vii)   No Default or Termination.

                  No Event of Default or Unmatured Event of Default, and, to the
                  best of AMD Inc.'s knowledge, no Event of Termination, exists.
                  None of the AMD Companies nor any other Subsidiary of AMD Inc.
                  is in default under or with respect to any Contractual
                  Obligation in any respect which, individually or together with
                  all such defaults, could reasonably be expected to have a
                  Material Adverse Effect.

          (viii)  No Burdensome Restrictions.

                  None of the AMD Companies nor any other Subsidiary of AMD Inc.
                  is a party to or bound by any Contractual Obligation other
                  than the Operative Documents, or subject to any restriction in
                  any Organizational Document, or any Requirement of Law, which
                  could reasonably be expected to have a Material Adverse
                  Effect.

          (ix)    Title to Properties; Encumbrances.

                  Each AMD Company and each other Material AMD Inc. Subsidiary
                  has good record and marketable title in fee simple to, or
                  valid leasehold interests in (or the equivalent for the
                  relevant jurisdiction), all real property necessary or used in
                  the ordinary conduct of their respective businesses, except
                  for such defects in title as could not, individually or in the
                  aggregate, reasonably be expected to have a Material Adverse
                  Effect. The property of each AMD Company and each other
                  Material AMD Inc. Subsidiary is subject to no Encumbrances,
                  other than Permitted Encumbrances.

          (x)     Subsidiaries; Material AMD Inc. Subsidiaries.

                  (a)   As of the Loan Agreement Effective Date, AMD Inc. has no
                        Subsidiaries other than those specifically disclosed in
                        the Disclosure Schedules and has no equity investments
                        in any other Person other than those specifically
                        disclosed in the Disclosure Schedules;

                  (b)   As of the Loan Agreement Effective Date, there are no
                        Material AMD Inc. Subsidiaries other than those
                        specifically disclosed in the Disclosure Schedules;

                  (c)   AMD Inc. is the direct legal and beneficial owner of
                        100% of the issued and outstanding shares of capital
                        stock of AMD Holding, all of which shares have been
                        validly issued;

                                       44



                  (d)   AMD Inc. is the direct legal and beneficial owner of
                        100% of the membership interests of AMD Saxony LLC;

                  (e)   AMD Holding is the direct legal and beneficial owner of
                        100% of the issued and outstanding shares of capital
                        stock of AMD Admin, all of which shares have been
                        validly issued;

                  (f)   100% of the capital partnership interests
                        (Kapitalanteile) in AMD Saxonia are held by AMD Admin
                        (as to Euro 250), AMD Holding (as to at least 99.99%
                        (rounded to two decimal points) and AMD Saxony LLC
                        (prior to a Substitution (if any)) (as to Euro 250 prior
                        to its re-transfer of a fractional interest pursuant to
                        the Conversion Documents, and as to 0% following such
                        re-transfer), each of which holds no investment in any
                        other person (except that AMD Admin is a wholly-owned
                        subsidiary of AMD Holding). AMD Holding and AMD Saxony
                        LLC are, in turn, wholly-owned subsidiaries of AMD Inc.;

                  (g)   AMD Holding has no Subsidiaries other than AMD Saxonia
                        and AMD Admin, and has no equity investments in any
                        other Person;

                  (h)   AMD Saxony LLC has no equity investments or interests in
                        any other Person other than its general partnership
                        interest in AMD Saxonia;

                  (i)   AMD Admin has no Subsidiaries and, other than its Euro
                        250 partnership interest in AMD Saxonia, has no equity
                        investments in any Person; and

                  (j)   AMD Saxonia has no Subsidiaries and has no equity
                        investments in any other Person.

          (xi)    Insurance.

                  Except as specifically disclosed in the Disclosure Schedules,
                  properties of each Sponsor and each "Restricted Subsidiary"
                  (under, and as defined in, the AMD Inc. 1999 Loan and Security
                  Agreement) are insured with financially sound and reputable
                  insurance companies not Affiliates of AMD Inc., in such
                  amounts, with such deductibles and covering such risks as are
                  customarily carried by companies engaged in similar businesses
                  and owning similar properties in localities where such Sponsor
                  or such "Restricted Subsidiary" (as so defined) operates.

          (xii)   Copyrights, Patents, Trademarks and Licenses, Etc.

                  Each AMD Company and each other Material AMD Inc. Subsidiary
                  owns or is licensed or otherwise has the right to use all of
                  the patents, trademarks, service marks, trade names,
                  copyrights, contractual franchises, authorizations, and other
                  rights that are reasonably necessary for the operation of its
                  respective businesses, without conflict with the rights of any
                  other Person, except for such conflicts which would not,
                  individually or in the aggregate, reasonably be expected to
                  have

                                       45



                  a Material Adverse Effect. Except as specifically disclosed in
                  the Disclosure Schedules, to the best knowledge of AMD Inc.:

                  (a)   no slogan or other advertising device, product, process,
                        method, substance, part, or other material now employed,
                        or now contemplated to be employed, by any AMD Company
                        or any other Subsidiary of AMD Inc. infringes upon any
                        rights held by any other Person;

                  (b)   no claim or litigation regarding any of the foregoing is
                        pending or, to the best knowledge of AMD Inc.,
                        threatened; and

                  (c)   no patent, invention, device, application, principle, or
                        any statute, law, rule, regulation, standard, or code is
                        pending or, to the best knowledge of AMD Inc., proposed,

                  which, in any case described in (a), (b), or (c) above, could
                  reasonably be expected to have a Material Adverse Effect.

          (xiii)  Taxes.

                  Each Sponsor and each "Restricted Subsidiary" (under, and as
                  defined in, the AMD Inc. 1999 Loan and Security Agreement)
                  have filed all material US Federal, German, and other tax
                  returns and reports required to be filed, and have paid all
                  material US Federal, German, and other taxes, assessments,
                  fees, and other governmental charges levied or imposed upon
                  them or their properties, income, or assets otherwise due and
                  payable, except those which are being contested in good faith
                  by appropriate proceedings and for which adequate reserves
                  have been provided in accordance with GAAP. There is no
                  proposed tax assessment against either Sponsor or any
                  "Restricted Subsidiary" (as so defined) that would, if made,
                  have a Material Adverse Effect.

          (xiv)   Governmental Approvals with Respect to the Operative
                  Documents.

                  As of the date this representation and warranty is made or
                  reaffirmed, as the case may be, all Governmental Approvals
                  (including, without limitation, from the United States of
                  America, the European Union, the Federal Republic of Germany,
                  and the Free State of Saxony) necessary for the due
                  authorization, execution, delivery, and performance by each of
                  the AMD Companies of, the legality or validity of the
                  obligations of each of the AMD Companies under, or the
                  enforceability against each of the AMD Companies of, each of
                  the Operative Documents to which it is a party and the due and
                  timely payment by each of the AMD Companies of amounts owing
                  under each of the Operative Documents have been listed on
                  Schedule 20 to the Loan Agreement and, except as otherwise
                  noted therein, all of such Governmental Approvals have been
                  duly obtained or effected, and are in full force and effect,
                  on the Conversion Effective Date.

                                       46



          (xv)    Governmental Approvals with Respect to the Plant and the
                  Design Center.

                  As at the date this representation and warranty is made or
                  reaffirmed, as the case may be, all Governmental Approvals
                  necessary for the construction, ownership, use, and operation
                  by AMD Saxonia of the Plant and the Design Center or which are
                  required in order that the Plant and the Design Center may be
                  operated for their intended purposes and Perform in Accordance
                  with the Plans and Specifications, have been listed on
                  Schedule 20 to the Loan Agreement, and all of such
                  Governmental Approvals (except those listed in Part B of
                  Schedule 20 to the Loan Agreement) have been duly obtained or
                  effected, are sufficient for all purposes thereof, and are in
                  full force and effect on such date (and, in the case of
                  Government Approvals that have expired, each AMD Company has
                  timely applied for renewal thereof and such Governmental
                  Approvals have been administratively extended under applicable
                  law); and AMD Inc. reasonably believes, after due inquiry,
                  that the Governmental Approvals set forth in Schedule 20 to
                  the Loan Agreement, together with all Governmental Approvals,
                  if any, that may be required in connection with the
                  transactions contemplated by the Operative Documents
                  subsequent to the date on which this representation and
                  warranty is made or reaffirmed, as the case may be, will be
                  obtained at such time or times as may be necessary to avoid
                  material delay in, or material restrictions on the use or
                  operation of, the Plant and the Design Center.

          (xvi)   Interruption of Business.

                  Neither the business nor the properties of an AMD Company are
                  presently affected by any fire, explosion, accident, strike,
                  lockout, or other dispute, drought, storm, hail, earthquake,
                  embargo, Act of God, or of the public enemy, or other casualty
                  (whether or not covered by insurance) which impairs, or, if
                  such event or condition were to continue for more than thirty
                  (30) additional days would be likely to impair, such AMD
                  Company's ability to perform its obligations under the
                  Operative Documents.

          (xvii)  Prior Activities, etc.

                  Prior to the Loan Agreement Effective Date, neither AMD
                  Holding nor AMD Saxonia has engaged in any business, conducted
                  any operations or activities, nor incurred any obligations or
                  liabilities (contingent or otherwise), other than (a) as
                  described in the Disclosure Schedules, and (b) its
                  obligations, if any, under the Operative Documents, and
                  activities reasonably incidental thereto. Prior to the
                  Conversion Effective Date, neither AMD Saxony LLC nor AMD
                  Admin has engaged in any business, conducted any operations or
                  activities, nor incurred any obligations or liabilities
                  (contingent or otherwise), other than its obligations, if any,
                  under the Operative Documents, and activities reasonably
                  incidental thereto.

                                       47



(xviii) Status of AMD Holding, AMD Saxony LLC, AMD Admin, and AMD Saxonia, etc.

        (a) AMD Holding is not a "Restricted Subsidiary" under, and for the
            purposes of, the AMD Inc. 1999 Loan and Security Agreement;

        (b) AMD Saxony LLC is not a "Restricted Subsidiary" under, and for
            purposes of, the AMD Inc. 1999 Loan and Security Agreement;

        (c) AMD Admin is not a "Restricted Subsidiary" under, and for purposes
            of, the AMD Inc. 1999 Loan and Security Agreement; and

        (d) AMD Saxonia is not a "Restricted Subsidiary" under, and for the
            purposes of, the AMD Inc. 1999 Loan and Security Agreement.

(xix)   Accuracy of Information.

        As of the date this representation and warranty is made or reaffirmed,
        as the case may be, all factual information then or theretofore
        furnished by or on behalf of any AMD Company to the Agent or any Bank or
        the Technical Advisor for purposes of or in connection with any
        Operative Document or any transaction contemplated thereby (including
        the Information Memorandum, true and complete copies of which were
        furnished to the Agent in connection with the execution and delivery of
        this Agreement) is true and accurate (taken as a whole) in all material
        respects on the date as of which such information is dated or certified,
        and on such date such information (taken as a whole) was not incomplete
        by omitting to state any material fact necessary to make such
        information not misleading. Insofar as any such information includes
        assumptions, estimates, or projections, such assumptions, estimates, or
        projections have been made in good faith, with due care, and with a
        diligent application of engineering, construction, and accounting
        expertise reasonably available within AMD Inc. and its Subsidiaries (it
        being understood that although any projections and forecasts furnished
        by an AMD Company represent such AMD Company's best estimates and
        assumptions as to future performance, which such AMD Company believes to
        be fair and reasonable as of the time made in the light of current and
        reasonably foreseeable business conditions, such projections and
        forecasts as to future events are not to be viewed as facts and that
        actual results during the period or periods covered thereby may differ
        from the projected or forecasted results). Without limiting the
        generality of the foregoing, as of the Loan Agreement Effective Date, no
        new information has become available which was not provided to the
        Technical Advisor prior to the Loan Agreement Effective Date and which,
        had it been so provided, could reasonably be expected to have caused the
        Technical Advisor to express an unfavourable opinion with respect to the
        Project in the Technical Advisor's Report.

(xx)    Warranties of AMD Saxonia, AMD Saxony LLC, AMD Admin and AMD Holding.

        Each of the representations and warranties made by AMD Saxonia, AMD
        Saxony LLC, AMD Admin, or AMD Holding in any Operative Document to which
        it is a

                                       48



        party (other than the representation and warranty of AMD Holding
        contained in Section 12.2(xi) and the representation and warranty of AMD
        Saxonia contained in ss. 15.1.10 of the Loan Agreement) is true and
        accurate in all material respects on each Sponsors' Warranty Date,
        except to the extent that any such representation or warranty expressly
        relates solely to an earlier date, and except, in the case of any
        representation or warranty made on a Sponsors' Warranty Date described
        in clause (vi) of the definition thereof, as otherwise provided in the
        certificate referred to therein.

SECTION 12.2  Representations and Warranties of the Sponsors. The Sponsors,
jointly and severally, hereby represent and warrant to the Agent and the
Security Agent as follows (save in respect of Section 12.2 (xi) which is
warranted only by AMD Holding):

    (i) Organisation; Corporate Power.

        (a) Each of AMD Holding and AMD Admin is a Gesellschaft mit beschrankter
            Haftung duly organised and existing under the laws of the Federal
            Republic of Germany and registered in Dresden, Germany and AMD
            Saxonia is a Limited Partnership duly organised and existing under
            the laws of the Federal Republic of Germany;

        (b) AMD Saxony LLC is a limited liability company duly organized and
            existing under the laws of the State of Delaware, United States of
            America;

        (c) 100% of the capital partnership interests (Kapitalanteile) in AMD
            Saxonia are held by AMD Admin (as to Euro 250), AMD Holding (as to
            at least 99.99% (rounded to two decimal points) and AMD Saxony LLC
            (prior to a Substitution (if any)) (as to Euro 250 prior to its
            re-transfer of a fractional interest pursuant to the Conversion
            Documents, and as to 0% following such re-transfer), each of which
            holds no investment in any other person (except that AMD Admin is a
            wholly-owned subsidiary of AMD Holding). AMD Holding and AMD Saxony
            LLC are, in turn, wholly-owned subsidiaries of AMD Inc.;

        (d) Each of AMD Holding, AMD Admin, AMD Saxony LLC, and AMD Saxonia:

            (1)  is duly qualified or licensed as a foreign corporation
                 authorised to do business in each other jurisdiction where,
                 because of the nature of its activities or properties in such
                 jurisdiction, such qualification or licensing is required,

            (2)  has all requisite corporate power and authority to own,
                 operate, and lease its assets and properties and to carry on
                 the business in which it is engaged and in which it proposes to
                 engage;

            (3)  has all requisite corporate power and authority

                                       49



                  (x) to execute, deliver, and perform its obligations under
                      each of the Operative Documents to which it is a party;
                      and

                  (y) to assign, and grant a security interest in, the Security
                      in the manner and for the purpose contemplated by the
                      Security Documents to which it is or is to be a party; and

              (4) is in compliance with all Requirements of Law,

              except, in each case referred to in clause (1), (2), or (4), to
              the extent that the failure to do so could not reasonably be
              expected to have a Material Adverse Effect.

   (ii)  Corporate Authority; No Conflict.

         The execution, delivery, and performance by each of AMD Holding, AMD
         Admin, AMD Saxony LLC, and AMD Saxonia of each Operative Document to
         which any such AMD Company is a party, and the grant by each such AMD
         Company of a security interest in the Security in the manner and for
         the purpose contemplated by the Security Documents to which such AMD
         Company is a party, have been duly authorised by all necessary
         corporate action (including any necessary shareholder action) on the
         part of such AMD Company, and do not:

         (a)  violate any provision of any law, rule, regulation, order, writ,
              judgment, injunction, decree, determination, or award presently in
              effect binding on such AMD Company, or of the Organizational
              Documents of such AMD Company;

         (b)  result in a breach of, result in a mandatory prepayment or
              acceleration of indebtedness evidenced or secured by, or
              constitute a default under, any indenture or loan or credit
              agreement, or any other agreement or instrument, to which such AMD
              Company is a party or by which such AMD Company or its properties
              are bound; or

         (c)  result in, or require (in each case except as contemplated by the
              Operative Documents), the creation or imposition of any
              Encumbrance of any nature upon or with respect to any of the
              properties now owned or hereafter acquired by either of such AMD
              Companies (other than any right of set-off or banker's lien or
              attachment that the Agent, the Security Agent, or any Bank may
              have under the Operative Documents or applicable law), and neither
              of such AMD Companies is in default under or in violation of its
              Organizational Documents, any of the Operative Documents to which
              it is a party, or any such law, rule, regulation, order, writ,
              judgment, injunction, decree, determination, award, indenture,
              agreement, or instrument, which default or violation, individually
              or in the aggregate, could reasonably be expected to have a
              Material Adverse Effect.

                                       50



   (iii)    Valid and Binding Obligations.

            Each Operative Document (which has been executed and delivered by
            any of AMD Holding, AMD Admin, AMD Saxony LLC, or AMD Saxonia)
            constitutes the legal, valid, and binding obligation of such AMD
            Company, enforceable against such AMD Company in accordance with its
            respective terms, subject, however, to the Opinion Reservations.

   (iv)     AMD Holding Security Documents.

            (a)  The provisions of each of the AMD Holding Security Documents
                 which has been executed and delivered by AMD Holding are
                 effective to create in favor of the Security Agent for the
                 benefit of the Secured Parties, a legal, valid, and enforceable
                 first priority Encumbrance in all rights, title, and interest
                 of AMD Holding in the AMD Holding Security described therein,
                 subject only to Permitted Encumbrances; and all necessary
                 filings and recordings have been made in the requisite offices
                 in all jurisdictions necessary or appropriate to perfect or
                 continue perfected with such priority such Encumbrance on such
                 Security.

            (b)  Each AMD Holding Security Document which has been executed and
                 delivered by AMD Holding is effective to grant to the Security
                 Agent a legal, valid, and enforceable security interest in all
                 rights, title, and interest of AMD Holding in the AMD Holding
                 Security described therein. When each such Security Document is
                 duly recorded or filed in the applicable recording or filing
                 office(s), if any, and the recording or filing fees and taxes,
                 if any, in respect thereof are paid and compliance is otherwise
                 had with the formal requirements of law applicable to the
                 recording and filing of security documentation generally, such
                 AMD Holding Security is subject to a legal, valid, enforceable,
                 and perfected first priority Encumbrance.

   (v)      AMD Saxony LLC Security Documents.

            (a)  The provisions of each of the AMD Saxony LLC Security Documents
                 which has been executed and delivered by AMD Saxony LLC are
                 effective to create in favour of the Security Agent for the
                 benefit of the Secured Parties, a legal, valid, and enforceable
                 first priority Encumbrance in all rights, title, and interest
                 of AMD Saxony LLC in the AMD Saxonia LLC Security described
                 therein, subject only to Permitted Encumbrances; and all
                 necessary filings and recordings have been made in the
                 requisite offices in all jurisdictions necessary or appropriate
                 to perfect or continue perfected with such priority such
                 Encumbrance on such Security.

            (b)  Each AMD Saxony LLC Security Document which has been executed
                 and delivered by AMD Saxony LLC is effective to grant to the
                 Security Agent a legal, valid, and enforceable security
                 interest in all rights, title, and

                                          51



                   interest of AMD Saxony LLC in the AMD Saxony LLC Security
                   described therein. When each such Security Document is duly
                   recorded or filed in the applicable recording or filing
                   office(s), if any, and the recording or filing fees and
                   taxes, if any, in respect thereof are paid and compliance is
                   otherwise had with the formal requirements of law applicable
                   to the recording and filing of security documentation
                   generally, such AMD Saxony LLC Security is subject to a
                   legal, valid, enforceable, and perfected first priority
                   Encumbrance.

      (vi)     AMD Admin Security Documents.

               (a) The provisions of each of the AMD Admin Security Documents
                   which has been executed and delivered by AMD Admin are
                   effective to create in favour of the Security Agent for the
                   benefit of the Secured Parties, a legal, valid, and
                   enforceable first priority Encumbrance in all rights, title,
                   and interest of AMD Admin in the AMD Admin Security described
                   therein, subject only to Permitted Encumbrances; and all
                   necessary filings and recordings have been made in the
                   requisite offices in all jurisdictions necessary or
                   appropriate to perfect or continue perfected with such
                   priority such Encumbrance on such Security.

               (b) Each AMD Admin Security Document which has been executed and
                   delivered by AMD Admin is effective to grant to the Security
                   Agent a legal, valid, and enforceable security interest in
                   all rights, title, and interest of AMD Admin in the AMD Admin
                   Security described therein. When each such Security Document
                   is duly recorded or filed in the applicable recording or
                   filing office(s), if any, and the recording or filing fees
                   and taxes, if any, in respect thereof are paid and compliance
                   is otherwise had with the formal requirements of law
                   applicable to the recording and filing of security
                   documentation generally, such AMD Admin Security is subject
                   to a legal, valid, enforceable, and perfected first priority
                   Encumbrance.

      (vii)    Financial Information; No Material Adverse Change.

               (a) The audited consolidated balance sheet of AMD Holding and its
                   Subsidiaries as at 31 December 1996, and the audited balance
                   sheet of AMD Saxonia as at 31 December 1996, and in each case
                   the related consolidated statements of income or operations,
                   shareholders' equity and cash flows for the period from
                   incorporation to such date:

                   (x)  were prepared in accordance with GAAP consistently
                        applied throughout the period covered thereby, except as
                        otherwise expressly noted therein, subject to ordinary,
                        good faith year-end audit adjustments;

                                             52



                  (y)  are complete and accurate in all material respects and
                       fairly present the consolidated financial condition of
                       AMD Holding and AMD Saxonia, or the financial condition
                       of AMD Saxonia, as the case may be, as of the date
                       thereof and their results of operations and cash flows
                       for the period covered thereby; and

                  (z)  except as specifically disclosed in the Disclosure
                       Schedules, show all material indebtedness and other
                       liabilities, direct or contingent, of AMD Holding and AMD
                       Saxonia as of the date thereof, including liabilities for
                       taxes, material commitments, and Contingent Liabilities.

             (b)  Since the respective dates of organisation of AMD Holding, AMD
                  Admin, AMD Saxony LLC, and AMD Saxonia, there has been no
                  Material Adverse Effect with respect to AMD Holding, AMD
                  Admin, AMD Saxony LLC, or AMD Saxonia, as the case may be,
                  except as may be specifically disclosed in the Disclosure
                  Schedules.

     (viii)  Litigation.

             Except as specifically disclosed in the Disclosure Schedules, there
             are no actions, suits, proceedings, claims, or disputes pending, or
             to the best knowledge of the Sponsors, threatened or contemplated,
             at law, in equity, in arbitration or before any Governmental
             Authority, against AMD Holding, AMD Admin, AMD Saxony LLC, or AMD
             Saxonia or any of their respective properties which:

             (a)  purport to affect or pertain to this Agreement or any other
                  Operative Document, or the entirety of the transactions
                  contemplated hereby or thereby; or

             (b)  if determined adversely to such AMD Company would reasonably
                  be expected to have a Material Adverse Effect.

             No injunction, writ, temporary restraining order, or any order of
             any nature has been issued by any court or other Governmental
             Authority purporting to enjoin or restrain the execution, delivery,
             or performance of this Agreement or any other Operative Document,
             or directing that the transactions provided for herein or therein
             not be consummated as herein or therein provided.

     (ix)    No Default or Termination.

             No Event of Default or Unmatured Event of Default, and, to the best
             of the Sponsors' knowledge, no Event of Termination, exists. None
             of AMD Holding, AMD Admin, AMD Saxony LLC, and AMD Saxonia is in
             default under or with respect to any Contractual Obligation in any
             respect which, individually or together with all such defaults,
             could reasonably be expected to have a Material Adverse Effect.

                                       53



     (x)     No Burdensome Restrictions.

             None of AMD Holding, AMD Admin, AMD Saxony LLC, and AMD Saxonia is
             a party to or bound by any Contractual Obligation (other than the
             Operative Documents), or subject to any restriction in any
             Organizational Document, or any Requirement of Law, which could
             reasonably be expected to have a Material Adverse Effect.

     (xi)    Solvency.

             Neither AMD Holding nor AMD Admin is insolvent as a matter of
             German law. AMD Saxony LLC is not insolvent as a matter of the law
             of the State of Delaware.

     (xii)   Title to Properties; Encumbrances.

             AMD Saxonia has good record and marketable title in fee simple to,
             or valid leasehold interests in (or the equivalent for the relevant
             jurisdiction), all real property necessary or used in the ordinary
             conduct of its business, except for such defects in title as could
             not, individually or in the aggregate, reasonably be expected to
             have a Material Adverse Effect. None of AMD Holding, AMD Admin, or
             AMD Saxony LLC has any real property or leasehold interests. The
             property of each of AMD Holding, AMD Admin, AMD Saxony LLC, and AMD
             Saxonia is subject to no Encumbrances, other than Permitted
             Encumbrances.

     (xiii)  Subsidiaries; Material AMD Inc. Subsidiaries.

             (a)  100% of the capital partnership interests (Kapitalanteile) in
                  AMD Saxonia are held by AMD Admin (as to Euro 250), AMD
                  Holding (as to at least 99.99% (rounded to two decimal points)
                  and AMD Saxony LLC (prior to a Substitution (if any)) (as to
                  Euro 250 prior to its re-transfer of a fractional interest
                  pursuant to the Conversion Documents, and as to 0% following
                  such re-transfer), each of which holds no investment in any
                  other person (except that AMD Admin is a wholly-owned
                  subsidiary of AMD Holding). AMD Holding and AMD Saxony LLC
                  are, in turn, wholly-owned subsidiaries of AMD Inc.;

             (b)  AMD Holding has no Subsidiaries other than AMD Saxonia and AMD
                  Admin, and has no equity investments in any other Person;

             (c)  AMD Saxony LLC has no equity investments or interests in any
                  other Person other than its general partnership interest in
                  AMD Saxonia;

             (d)  AMD Admin has no Subsidiaries and, other than its Euro 250
                  partnership interest in AMD Saxonia, has no equity investments
                  in any other Person; and

                                       54



             (e)  AMD Saxonia has no Subsidiaries and has no equity investments
                  in any other Person.

     (xiv)   Insurance.

             Except as specifically disclosed in the Disclosure Schedules,
             properties of AMD Holding, AMD Admin and AMD Saxony LLC are insured
             with financially sound and reputable insurance companies not
             Affiliates of AMD Inc., in such amounts, with such deductibles and
             covering such risks as are customarily carried by companies engaged
             in similar businesses and owning similar properties in localities
             where each of AMD Holding, AMD Admin and AMD Saxony LLC operates.

     (xv)    Copyrights, Patents, Trademarks and Licenses, Etc.

             Each of AMD Holding, AMD Admin, AMD Saxony LLC and AMD Saxonia owns
             or is licensed or otherwise has the right to use all of the
             patents, trademarks, service marks, trade names, copyrights,
             contractual franchises, authorizations, and other rights that are
             reasonably necessary for the operation of their respective
             businesses, without conflict with the rights of any other Person,
             except for such conflicts, if any, which would not, individually or
             in the aggregate, reasonably be expected to have a Material Adverse
             Effect. Except as specifically disclosed in the Disclosure
             Schedules, to the best knowledge of the Sponsors:

             (a)  no slogan or other advertising device, product, process,
                  method, substance, part, or other material now employed, or
                  now contemplated to be employed, by AMD Holding, AMD Admin,
                  AMD Saxony LLC or AMD Saxonia infringes upon any rights held
                  by any other Person;

             (b)  no claim or litigation regarding any of the foregoing is
                  pending or, to the best knowledge of the Sponsors, threatened;
                  and

             (c)  no patent, invention, device, application, principle, or any
                  statute, law, rule, regulation, standard, or code is pending
                  or, to the best knowledge of the Sponsors, proposed

             which, in any case described in (a), (b), or (c) above, could
             reasonably be expected to have a Material Adverse Effect.

     (xvi)   Taxes.

             Each of AMD Holding, AMD Admin and AMD Saxony LLC has filed all
             material U.S. Federal, German and other tax returns and reports
             required to be filed, and has paid all material U.S. Federal,
             German and other taxes, assessments, fees, and other governmental
             charges levied or imposed upon it or its properties, income, or
             assets otherwise due and payable, except those which are being
             contested in good faith by appropriate proceedings and for which
             adequate reserves have been provided in accordance with GAAP. There
             is no proposed tax

                                       55



             assessment against AMD Holding, AMD Admin or AMD Saxony LLC that
             would, if made, have a Material Adverse Effect.

     (xvii)  Governmental Approvals with Respect to the Operative Documents.

             As of the date on which this representation and warranty is made or
             reaffirmed, as the case may be, all Governmental Approvals
             (including, without limitation, from the United States of America,
             the European Union, the Federal Republic of Germany, and the Free
             State of Saxony) necessary for the due authorization, execution,
             delivery, and performance by each of AMD Holding, AMD Admin, AMD
             Saxony LLC and AMD Saxonia of, the legality or validity of the
             obligations of each of such AMD Companies under, or the
             enforceability against each of such AMD Companies of, each of the
             Operative Documents to which it is a party and the due and timely
             payment by each of such AMD Companies of amounts owing under each
             of the Operative Documents have been listed on Schedule 20 to the
             Loan Agreement and, except as otherwise noted therein, all of such
             Governmental Approvals have been duly obtained or effected, and are
             in full force and effect on the Conversion Effective Date.

     (xviii) Governmental Approvals with Respect to the Plant and the Design
             Center.

             As of the date on which this representation and warranty is made or
             reaffirmed, as the case may be, all Governmental Approvals
             necessary for the construction, ownership, use, and operation by
             AMD Saxonia of the Plant and the Design Center or which are
             required in order that the Plant and the Design Center may be
             operated for their intended purposes and Perform in Accordance with
             the Plans and Specifications, have been listed on Schedule 20 to
             the Loan Agreement, and all of such Governmental Approvals (except
             those listed in Part B of Schedule 20 to the Loan Agreement) have
             been duly obtained or effected, are sufficient for all purposes
             thereof, and are in full force and effect on such date (and, in the
             case of Governmental Approvals that have expired, each of AMD
             Holding, AMD Admin, AMD Saxony LLC and AMD Saxonia has timely
             applied for renewal thereof and such Governmental Approvals have
             been administratively extended under applicable law); and the
             Sponsors reasonably believe, after due inquiry, that the
             Governmental Approvals set forth in Schedule 20 to the Loan
             Agreement, together with all Governmental Approvals, if any, that
             may be required in connection with the transactions contemplated by
             the Operative Documents subsequent to the date on which this
             representation and warranty is made or reaffirmed, as the case may
             be, will be obtained at such time or times as may be necessary to
             avoid material delay in, or material restrictions on the use or
             operation of, the Plant and the Design Center.

     (xix)   Interruption of Business.

             Neither the business nor the properties of AMD Holding, AMD Admin,
             AMD Saxony LLC or AMD Saxonia are presently affected by any fire,
             explosion, accident, strike, lockout, or other dispute, drought,
             storm, hail, earthquake,

                                       56



             embargo, Act of God, or of the public enemy, or other casualty
             (whether or not covered by insurance) which impairs, or, if such
             event or condition were to continue for more than thirty (30)
             additional days would be likely to impair, such AMD Company's
             ability to perform its obligations under the Operative Documents.

     (xx)    Prior Activities, etc.

             Prior to the Loan Agreement Effective Date, neither AMD Holding nor
             AMD Saxonia has engaged in any business, conducted any operations
             or activities, nor incurred any obligations or liabilities
             (contingent or otherwise), other than (i) as described in the
             Disclosure Schedules, and (ii) its obligations, if any, under the
             Operative Documents, and activities reasonably incidental thereto.
             Prior to the Conversion Effective Date, neither AMD Saxony LLC nor
             AMD Admin has engaged in any business, conducted any operations or
             activities, not incurred any obligations or liabilities (contingent
             or otherwise), other than its obligations, if any, under the
             Operative Documents, and activities reasonably incidental thereto.

     (xxi)   Status of AMD Holding, AMD Admin, AMD Saxony LLC, and AMD Saxonia,
             etc.

             (a)  AMD Holding is not a "Restricted Subsidiary" under, and for
                  the purposes of, the AMD Inc. 1999 Loan and Security
                  Agreement;

             (b)  AMD Saxony LLC is not a "Restricted Subsidiary" under, and for
                  the purposes of, the AMD Inc. 1999 Loan and Security
                  Agreement;

             (c)  AMD Admin is not a "Restricted Subsidiary" under, and for the
                  purposes of, the AMD Inc. 1999 Loan and Security Agreement;
                  and

             (d)  AMD Saxonia is not a "Restricted Subsidiary" under, and for
                  the purposes of, the AMD Inc. 1999 Loan and Security
                  Agreement.

     (xxii)  Accuracy of Information.

             As of the date this representation and warranty is made or
             reaffirmed, as the case may be, all factual information then or
             theretofore furnished by or on behalf of AMD Holding, AMD Admin,
             AMD Saxony LLC or AMD Saxonia to the Agent or any Bank or the
             Technical Advisor for purposes of or in connection with any
             Operative Document or any transaction contemplated thereby
             (including the Information Memorandum, true and complete copies of
             which were furnished to the Agent in connection with the execution
             and delivery of this Agreement) is true and accurate (taken as a
             whole) in all material respects on the date as of which such
             information is dated or certified, and on such date such
             information (taken as a whole) was not incomplete by omitting to
             state any material fact necessary to make such information not
             misleading. Insofar as any such information includes assumptions,
             estimates, or projections, such assumptions, estimates, or
             projections have been or will be made in good faith, with due care,
             and with a diligent application of engineering, construction, and
             accounting expertise reasonably

                                       57



             available within AMD Inc. and its Subsidiaries (it being understood
             that although any projections and forecasts furnished by an AMD
             Company represent such AMD Company's best estimates and assumptions
             as to future performance, which such AMD Company believes to be
             fair and reasonable as of the time made in the light of current and
             reasonably foreseeable business conditions, such projections and
             forecasts as to future events are not to be viewed as facts and
             that actual results during the period or periods covered thereby
             may differ from the projected or forecasted results). Without
             limiting the generality of the foregoing, as of the Loan Agreement
             Effective Date, no new information has become available which was
             not provided to the Technical Advisor prior to the Loan Agreement
             Effective Date and which, had it been so provided, could reasonably
             be expected to have caused the Technical Advisor to express an
             unfavourable opinion with respect to the Project in the Technical
             Advisor's Report.

     (xxiii) Warranties made by AMD Saxonia.

             Each of the representations and warranties made by AMD Saxonia in
             any Operative Document to which it is a party (other than the
             representation and warranty contained in ss. 15.1.10 of the Loan
             Agreement) is true and accurate in all material respects on each
             Sponsors' Warranty Date, except to the extent that any such
             representation or warranty expressly relates solely to an earlier
             date, and except, in the case of any representation or warranty
             made on a Sponsors' Warranty Date described in clause (vi) of the
             definition thereof, as otherwise provided in the certificate
             referred to therein.

SECTION 12.3  Repetition of Representations and Warranties. The representations
and warranties contained in Sections 12.1 and 12.2 shall be repeated on each
Sponsors' Warranty Date, except to the extent that any such representation and
warranty expressly relates solely to an earlier date, and except, in the case of
the Sponsors' Warranty Date described in clause (vi) of the definition thereof,
as otherwise set forth in the certificate referred to therein.

                                  ARTICLE XIII
                                    Covenants

SECTION 13.1  Affirmative Covenants of AMD, Inc. AMD Inc. agrees, so long as any
Primary Secured Obligations shall remain outstanding or any Bank shall have any
commitment under or arising out of the Loan Agreement, that it will, and will
cause each other AMD Company to, unless in either case the Security Agent shall
have enforced any of the Security or the Agent (acting on the instructions of an
Instructing Group) shall have otherwise consented in writing:

     (i)     furnish to the Agent (with copies for each of the Banks):

             (a)    as soon as possible and in any event within ten (10)
                    Business Days after a Relevant AMD Inc. Individual shall
                    have obtained actual knowledge of the occurrence of an Event
                    of Default, an Unmatured Event of Default or an Event of
                    Termination, the statement of an authorised officer of AMD

                                       58



                    Inc. setting forth the details thereof which has occurred
                    and the action (if any) which AMD Inc. or any other AMD
                    Company proposes to take with respect thereto;

             (b)    as soon as available, and in any event within forty-five
                    (45) days after the end of each of the first three Fiscal
                    Quarters of each Fiscal Year of AMD Inc., (x) consolidated
                    financial statements consisting of a consolidated balance
                    sheet of AMD Inc. as at the end of such Fiscal Quarter and a
                    consolidated statement of income and statement of
                    shareholders' equity and cashflows of AMD Inc. for such
                    Fiscal Quarter and for the Fiscal Year through such Fiscal
                    Quarter, setting forth in comparative form the corresponding
                    figures for the corresponding periods of the preceding
                    Fiscal Year, all in reasonable detail and certified (subject
                    to ordinary good faith year end audit adjustments) by an
                    authorised financial officer of AMD Inc. as being complete
                    and accurate in all material respects, and as fairly
                    presenting in accordance with GAAP, consistently applied,
                    the financial position and results of operations of AMD Inc.
                    and its Subsidiaries, and (y) consolidating financial
                    statements consisting of a consolidating balance sheet of
                    AMD Inc. as at the end of such Fiscal Quarter and a
                    consolidating statement of income and statement of
                    shareholders' equity and cashflows of AMD Inc. for such
                    Fiscal Quarter and for the Fiscal Year through such Fiscal
                    Quarter, setting forth in comparative form the corresponding
                    figures for the corresponding periods of the preceding
                    Fiscal Year, all in reasonable detail and certified (subject
                    to ordinary good faith year end audit adjustments) by an
                    authorised financial officer of AMD Inc. as being complete
                    and accurate in all material respects, and as having been
                    developed and used in connection with the financial
                    statements referred to in clause (x) above;

             (c)    as soon as available, and in any event within ninety (90)
                    days after the end of each Fiscal Year of AMD Inc., (x)
                    financial statements consisting of a consolidated balance
                    sheet of AMD Inc. as at the end of such Fiscal Year and a
                    consolidated statement of income and statement of
                    shareholders' equity and cashflows of AMD Inc. for such
                    Fiscal Year, setting forth in comparative form the
                    corresponding figures for the preceding Fiscal Year, all in
                    reasonable detail and certified by independent certified
                    public accountants of recognised national standing and by an
                    authorised financial officer of AMD Inc. as fairly
                    presenting in accordance with GAAP, consistently applied,
                    the financial position and results of operations of AMD Inc.
                    and its Subsidiaries, and (y) a certificate from each
                    Sponsor confirming, as of the date of such certificate,
                    that, except as otherwise therein set forth, each of the
                    representations and warranties made by each AMD Company in
                    any Operative Document to which it is a party is true and
                    accurate in all material respects on the date of such
                    certificate, except to the extent that any such
                    representation or warranty expressly relates solely to an
                    earlier date;

                                       59



             (d)    (x) in connection with the completion of any Scheduled
                    Project Phase, (1) a Scheduled Project Phase Technical
                    Completion Certificate (AMD Companies), and (2) a Scheduled
                    Project Phase Technical Completion Certificate (Technical
                    Advisor), and (y) as soon as available, and in any event
                    within ten (10) days after the completion of any Scheduled
                    Project Phase, (1) a Project Budget and (2) a Project
                    Schedule relating to the Project, setting forth in
                    reasonable detail a description of all of the Capital
                    Expenditures which have been made during each Scheduled
                    Project Phase (other than the final Project Phase) with
                    respect to the Project to the date thereof and those which
                    are anticipated to be made during each Project Phase prior
                    to Completion; provided, however, that if, at any time prior
                    to Completion, any AMD Company or the Agent (acting on the
                    instructions of an Instructing Group), determines that it is
                    appropriate to amend, supplement, or otherwise modify the
                    Approved Project Budget, or the Approved Project Schedule,
                    the parties hereto hereby agree to discuss in good faith any
                    such proposed amendment, supplement, or modification;
                    provided, further, that (a) neither the Agent nor the Banks
                    shall be obligated in any matter, as a result of any such
                    discussions or otherwise, to agree to any amendments,
                    supplements, or other modifications to the Approved Project
                    Budget or Approved Project Schedule which would reduce or
                    relax the then required financial performance of AMD Saxonia
                    with respect to the Project, and (b) each of the Agent and
                    the Banks reserve(s) all rights hereunder in the event that
                    such discussions fail to produce an amendment or other
                    supplement to, or modification of, the Approved Project
                    Budget or the Approved Project Schedule. In the event (but
                    only in such event) that AMD Saxonia (with the consent of
                    each Sponsor) and the Agent agree to amend, supplement, or
                    otherwise modify any Approved Project Budget or any Approved
                    Project Schedule, as the case may be, then such amended,
                    supplemented, or otherwise modified Approved Project Budget
                    or Approved Project Schedule, as the case may be, shall
                    thereafter be the "Approved Project Budget" or the "Approved
                    Project Schedule" for all purposes hereof until further
                    changed, if at all, pursuant to this Section 13.1(i)(d);

             (e)    promptly following AMD Inc.'s or such other AMD Company's
                    receipt or transmission thereof, and unless otherwise
                    concurrently delivered by another AMD Company to the Agent
                    under an Operative Document, a copy of each notice, report,
                    schedule, certificate, financial statement, or other
                    document furnished pursuant to any of the Operative
                    Documents if such notice, report, schedule, certificate,
                    financial statement, or other document could reasonably be
                    considered material to the Agent or any Bank in connection
                    with the Operative Documents and the entirety of the
                    transactions contemplated thereby;

             (f)    promptly following the occurrence of (x) any change in the
                    identification of the applicable AMD Inc. Primary Bank
                    Credit Agreement pursuant to the definition thereof
                    contained in Section 1.1, or (y) any consent or

                                       60



                    waiver or amendment or modification with respect to the
                    incorporated covenants, related definitions, or ancillary
                    provisions of the AMD Inc. Primary Bank Credit Agreement,
                    notice of such change and the basis therefor or of such
                    consent or waiver or amendment or modification and the basis
                    therefor; and

             (g)    such other information with respect to the business affairs,
                    financial condition, and/or operations of AMD Inc. and its
                    Subsidiaries (including AMD Saxonia) and Affiliates as the
                    Agent or any Bank (acting through the Agent) may from time
                    to time reasonably request for purposes of the transactions
                    contemplated by the Operative Documents.

     (ii)    pay and perform all of its obligations under each of the Operative
             Documents to which it is a party in the manner and at the time
             contemplated therein.

     (iii)   cause each of AMD Holding and AMD Saxony LLC at all times to be a
             wholly-owned Subsidiary of AMD Inc. and cause AMD Admin at all
             times to be a wholly-owned Subsidiary of AMD Holding and cause the
             capital partnership interests in AMD Saxonia at all times to be
             held by AMD Admin (as to Euro 250) and AMD Holding (as to at least
             99.99% (rounded to two decimal points)) (except for the temporary
             transfer of a partnership interest of AMD Saxonia to AMD Saxony LLC
             pursuant to the Assignment and Trust Agreement and except in
             connection with the Substitution (if any)).

     (iv)    cause AMD Saxony LLC to retransfer to AMD Holding, its partnership
             interest of Euro 250 in AMD Saxonia in accordance with the
             Assignment and Trust Agreement and to ensure that, at no time
             thereafter, shall AMD Saxony LLC acquire or become entitled to
             acquire a capital partnership interest in AMD Saxonia.

     (v)     promptly following a request by the Agent or any Bank (acting
             through the Agent) to do so, permit the Agent, the Technical
             Advisor, the Auditor, or any of their respective representatives to
             have reasonable access during normal business hours to the Plant or
             the Design Center and to such books and records of AMD Saxonia as
             may be necessary or reasonably desirable (in the good faith
             discretion of the Agent or any Bank) to verify compliance by each
             AMD Company with its obligations under the Operative Documents to
             which it is a party; provided, that such access shall be exercised
             in a manner which does not disrupt the operations of the Plant or
             the Design Center, in any material respect.

     (vi)    prior to Completion, cause AMD Saxonia to use Sponsors' Loans,
             equity contributions under Article II, Advances and Revolving Loans
             solely to pay Project Costs incurred to complete the Project in
             accordance with the Plans and Specifications.

     (vii)   following the Conversion, promptly execute, and cause each of AMD
             Holding, AMD Admin and AMD Saxony LLC to promptly execute, a
             declaration of

                                       61



             liability substantially in the same form attached as Appendix Four
             to the SAB/Dresdner Subsidy Agreement, amended to reflect the
             addition of the Additional Partner Companies.

     (viii)  in respect of Product Liability Insurance and Business Interruption
             Insurance as required in ss. 17.8 of the Loan Agreement and
             Schedule 22 of the Loan Agreement, procure and maintain such
             insurance policies and otherwise comply in all respects with
             respect to such insurances with ss. 17.8 of the Loan Agreement and
             Schedule 22 of the Loan Agreement, including delivery of
             certificates from its Insurance Brokers as required therein, as if
             each of the obligations referred to in ss. 17.8 of the Loan
             Agreement and Schedule 22 of the Loan Agreement with regard to such
             insurances were expressed to be those of AMD Inc.

     (ix)    make or cause to be made prompt payment of all premiums and premium
             installments payable under each Product Liability Insurance and
             Business Interruption Insurance policy as required in Schedule 22
             of the Loan Agreement.

SECTION 13.2  Negative Covenants of AMD Inc. AMD Inc. agrees, so long as any
Primary Secured Obligation shall remain outstanding or any Bank shall have any
commitment under or arising out of the Loan Agreement, that it will not, and not
permit any other AMD Company to, unless in either case the Security Agent shall
have enforced any of the Security or the Agent (acting on the instructions of an
Instructing Group) shall have otherwise consented in writing:

     (i)     terminate, amend or modify, or agree to the termination, amendment
             or modification, of any Operative Document, other than (w) the AMD
             Inc. Primary Bank Credit Agreement (which may be amended, modified,
             or terminated in accordance with Section 13.3), (x) the Equipment
             Supply Contracts that are not Material Equipment Supply Contracts,
             (y) the Service Contracts that are not Material Service Contracts,
             or (z) in the case of the Project Budget, the Approved Project
             Budget, the Project Schedule, the Approved Project Schedule, and
             the Management Plan, as expressly provided hereunder; provided,
             that AMD Inc. may terminate the AMD Holding Wafer Purchase
             Agreement or the AMD Holding Research Agreement only in accordance
             with the express termination provisions thereof; provided, further,
             that AMD Holding may terminate the AMD Saxonia Wafer Purchase
             Agreement or the AMD Saxonia Research Agreement only in accordance
             with the express termination provisions thereof; and provided,
             further, that the AMD Saxonia Hedging Contract may be terminated
             only in accordance with the express termination provisions thereof.
             The foregoing notwithstanding, AMD Saxonia may amend or modify, or
             agree to the amendment or modification of, the Design/Build
             Agreement, any Material Equipment Supply Contract, any Material
             Service Contract, or the Plans and Specifications to the extent
             such amendment or modification does not, individually or in the
             aggregate, decrease or adversely affect (x) the value or use of the
             Plant and the Design Center (or of the rights of the Banks with
             respect thereto) in any material respect, or (y) the capacity of
             the Plant to perform, on a substantially continuous basis, the
             functions for which it was specifically designed in accordance with
             the plans and specifications as originally approved

                                       62



            by the Technical Advisor and the Agent for purposes of the Operative
            Documents; provided, that prior to Completion no such amendment or
            modification will, individually or in the aggregate, be inconsistent
            with the Approved Project Budget or the Approved Project Schedule.

     (ii)   create, incur, or suffer to exist any Encumbrance with respect to
            its rights under or in respect of the Sponsors' Loan Agreement or
            the Revolving Loan Facility Agreement.

     (iii)  permit AMD Holding, AMD Saxony LLC, AMD Admin or AMD Saxonia to
            amend their respective Organizational Documents (except in
            connection with the Substitution (if any)).

     (iv)   permit to subsist or enter into any other agreements which (by their
            terms) conflict with, or prohibit AMD Inc., from complying with its
            obligations as set out in this Agreement or any other Operative
            Document.

SECTION 13.3 Incorporated Covenants of AMD, Inc. AMD Inc. agrees, so long as any
Primary Secured Obligation shall remain outstanding or any Bank shall have any
commitment under or arising out of the Loan Agreement, that it will, unless the
Security Agent shall have enforced any of the Security or the Agent (acting on
the instructions of an Instructing Group) shall have otherwise consented in
writing, duly keep, perform, and observe, for the benefit of the Agent, the
Security Agent, and the Secured Parties, each and every affirmative, negative,
and informational covenant contained in the AMD Inc. Primary Bank Credit
Agreement (to the extent that such covenants are applicable to AMD Inc.
thereunder), all of which covenants, together with related definitions and
ancillary provisions, are hereby incorporated herein by reference as if such
terms were set forth herein in full; provided, however, that:

     (i)    with respect to the AMD Inc. Primary Bank Credit Agreement referred
            to in clause (i) of the definition thereof:

            (a)     any references to the "Agent" shall be deemed to be
                    references to the Agent (except where such term is used in
                    Article 6, Sections 7.1, 7.2 (a), 9.5 (b) and (c) (second
                    sentence), 9.11, 9.14, 9.15 and 9.22 (a) thereof);

            (b)     any references to the "Lenders" shall be deemed to be
                    references to the Banks (except where such term is used in
                    Article 6, Sections 7.1, 7.2 (a), 9.5 (b) and (c) (second
                    sentence), 9.15 and 9.22 (a) thereof);

            (c)     any references to the "Majority Lenders" shall be deemed to
                    be references to an Instructing Group (except where such
                    term is used in Article 6, or Section 9.5 (b) and 9.22 (a)
                    thereof);

            (d)     any references to the "Agreement" shall be deemed to be
                    references to this Agreement (except where such term is used
                    in Article 6 and Sections 7.2 (b), 7.2 (d), 7.2 (e), 9.8,
                    9.13, 9.15 and 9.22 (a) thereof);

                                       63



            (e)     any references to the "Loan Documents" shall be deemed to be
                    references to the Operative Documents (except where such
                    term is used in Article 6 and Section 7.2 (e) and 9.22 (a)
                    thereof);

            (f)     any references to an "Event of Default" shall be deemed to
                    be references to an Event of Default (except where such term
                    is used in Article 6 and Sections 7.2 (d), 7.2 (e), 9.5 (c)
                    and 9.8 (vi) (A) thereof);

            (g)     any references to a "Default" shall be deemed to be
                    references to an Unmatured Event of Default (except where
                    such term is used in Article 6 and Sections 7.2 (d) and 7.2
                    (e) thereof);

            (h)     any references to a "Material Adverse Effect" shall be
                    deemed to be references to a Material Adverse Effect; and

            (i)     any references to "so long as any of the Obligations remain
                    outstanding or this Agreement is in effect" shall be deemed
                    to be references to "So long as any Bank shall have any
                    commitment to make Advances under the Loan Agreement or any
                    of the Primary Secured Obligations shall remain unpaid or
                    unsatisfied";

     (ii)   [intentionally deleted]

     (iii)  with respect to the AMD Inc. Primary Bank Credit Agreement referred
            to in clause (ii) of the definition thereof, such modifications to
            the provisions incorporated in this Agreement as shall be
            appropriate to make them applicable to this Agreement and consistent
            with the Project shall be deemed to be made; and

The provisions and definitions of the applicable AMD Inc. Primary Bank Credit
Agreement, as incorporated by reference in this Agreement, shall continue to be
binding on AMD Inc. after giving effect to any consent or waiver with respect to
such provisions or to any amendment or modification thereof, in each case given
or made in accordance with the terms of and by the parties to the applicable AMD
Inc. Primary Bank Credit Agreement.

SECTION 13.4 Affirmative Covenants of the Sponsors. The Sponsors, jointly and
severally, agree, so long as any Primary Secured Obligations shall remain
outstanding or any Bank shall have any commitment under or arising out of the
Loan Agreement, that each of AMD Holding, AMD Admin, and (prior to the
Substitution (if any)), AMD Saxony LLC will (and, at all times prior to the
exercise of rights by the Security Agent under any of the Security Documents,
AMD Inc. will cause each of AMD Holding, AMD Admin, and (prior to the
Substitution (if any)) AMD Saxony LLC to), unless the Agent (acting on the
instructions of an Instructing Group) shall have otherwise consented in writing:

     (i)    duly and punctually pay and perform all of its obligations under
            each of the Operative Documents to which it is a party in the manner
            and at the time contemplated therein.

                                       64



     (ii)   pay or discharge (a) all taxes, assessments, and governmental
            charges or levies imposed upon it or upon its income or profits or
            any property belonging to it prior to the date on which penalties
            attach thereto, and (b) all lawful claims prior to the time they
            become an Encumbrance upon any property of any of AMD Holding, AMD
            Admin or AMD Saxony LLC, as the case may be, and other than taxes,
            assessments, charges, levies, or claims included in clauses (a) and
            (b) above which are not, individually or collectively, substantial
            in aggregate amount; provided, that (after providing notice thereof
            to the Agent) neither AMD Holding, nor AMD Saxony LLC, nor AMD Admin
            shall be required to pay or discharge any such tax, assessment,
            charge, levy, or claim while the same is being contested by it in
            good faith and by appropriate proceedings and adequate book reserves
            have been established with respect thereto, and so long as the lien
            or charge resulting from the nonpayment or non-discharge of such
            tax, assessment, charge, levy, or claim shall not, individually or
            in the aggregate, have a Material Adverse Effect.

     (iii)  cause AMD Saxonia to preserve and maintain its existence as a
            Limited Partnership, rights, privileges, and franchises in the
            jurisdiction of its incorporation, and cause AMD Saxonia to not have
            operations in any other jurisdiction.

     (iv)   comply in all material respects with all laws, rules, regulations,
            and governmental orders (Federal, state, local, and foreign) having
            applicability to it or to the business or businesses at any time
            conducted by each of AMD Holding, AMD Admin, and AMD Saxony LLC
            except to the extent that any such noncompliance, individually or in
            the aggregate, could not reasonably be expected to have a Material
            Adverse Effect.

     (v)    promptly following each of AMD Holding's, AMD Admin's and AMD Saxony
            LLC's, as the case may be, receipt or transmission thereof, unless
            otherwise concurrently delivered by another AMD Company to the Agent
            under an Operative Document, furnish to the Agent a copy of each
            notice, report, schedule, certificate, financial statement, or other
            document furnished pursuant to any of the Operative Documents if
            such notice, report, schedule, certificate, financial statement, or
            other document could reasonably be considered material to the Agent
            or any Bank in connection with the Operative Documents or the
            entirety of the transactions contemplated thereby.

     (vi)   promptly following a request from the Security Agent to do so and at
            AMD Holding's, AMD Admin's or AMD Saxony LLC's, as the case may be,
            own expense, take all such lawful action as the Security Agent may
            reasonably request to enforce or secure the performance by each
            other AMD Company under any Operative Document to which AMD Holding,
            AMD Admin or AMD Saxony LLC is a party of such AMD Company's
            respective obligations under and in connection with the applicable
            Operative Document in accordance with the respective terms thereof,
            and exercise any right of termination or remedy available to AMD
            Holding, AMD Admin or AMD Saxony LLC thereunder or in

                                       65



            connection therewith to the extent and in the manner reasonably
            directed by the Security Agent, including, without limitation, the
            institution of legal or administrative actions or proceedings to
            compel or enforce performance by each other AMD Company of its
            respective obligations thereunder, or to recover any payment due AMD
            Holding, AMD Admin or AMD Saxony LLC thereunder.

     (vii)  keep, or cause to be kept, adequate records and books of account, in
            which complete entries are to be made reflecting its business and
            financial transactions, such entries to be made in accordance with
            GAAP consistently applied in the case of financial transactions or
            as otherwise required by applicable rules and regulations of any
            governmental agency or regulatory authority (federal, state, local
            or foreign) having jurisdiction over AMD Holding, AMD Admin and AMD
            Saxony LLC, or the transactions contemplated by this Agreement or
            the other Operative Documents to which it is or will be a party.

     (viii) maintain, obtain or effect all Governmental Approvals which may at
            any time or from time to time be necessary for the due
            authorization, execution, delivery, performance, legality, validity,
            or enforceability of each of the Operative Documents to which it is
            or will be a party.

     (ix)   prior to Completion, cause AMD Saxonia to use Sponsors' Loans,
            equity contributions under Article II, Advances and Revolving Loans
            solely to pay Project Costs to complete the Project in accordance
            with the Plans and Specifications.

     (x)    cause each of AMD Holding and AMD Admin to promptly pay proceeds
            from any tax refunds to AMD Saxonia.

     (xi)   furnish to the Agent (with copies for each of the Banks):

            (a)     as soon as available, and in any event within ninety (90)
                    days after the end of each calendar year, financial
                    statements of each of AMD Holding and AMD Admin consisting
                    of a balance sheet of each of AMD Holding and AMD Admin as
                    at the end of such calendar year and a profit and loss
                    statement and cash flow statement of each of AMD Holding and
                    AMD Admin for such calendar year, setting forth in
                    comparative form the corresponding figures for the preceding
                    calendar year (to the extent applicable), all in reasonable
                    detail and certified by independent certified public
                    accountants of recognised national standing and by an
                    authorised financial officer of each of AMD Holding and AMD
                    Admin as fairly presenting in accordance with GAAP,
                    consistently applied, the financial position and results of
                    operations of each of AMD Holding and AMD Admin;

            (b)     as soon as available, and in any event within ninety (90)
                    days after the end of each Fiscal Year of AMD Saxony LLC,
                    financial statements consisting of a balance sheet of AMD
                    Saxony LLC as at the end of such Fiscal Year

                                       66



                    and a statement of income and statement of shareholders'
                    equity and cashflows of AMD Saxony LLC for such Fiscal Year,
                    setting forth in comparative form the corresponding figures
                    for the preceding Fiscal Year, all in reasonable detail and
                    certified by independent certified public accountants of
                    recognised national standing and by an authorised financial
                    officer of AMD Saxony LLC as fairly presenting in accordance
                    with GAAP, consistently applied, the financial position and
                    results of operations of AMD Saxony LLC.

     (xii)  following the Conversion, promptly execute a declaration of
            liability substantially in the same form attached as Appendix Four
            to the SAB/Dresdner Subsidy Agreement, amended to reflect the
            addition of the Additional Partner Companies and promptly deliver or
            cause to be delivered, to the Agent the original executed version of
            the Power of Attorney referred to in para (xxiii) of the definition
            of Conversion Documents which shall be held by the Agent in
            accordance with the Operative Documents.

SECTION 13.5 Negative Covenants of the Sponsors. The Sponsors, jointly and
severally, agree, so long as any Primary Secured Obligation shall remain
outstanding or any Bank shall have any commitment under or arising out of the
Loan Agreement, that none of AMD Holding, AMD Admin or (prior to the
Substitution (if any)) AMD Saxony LLC will (and AMD Inc. will not, at any time
prior to the exercise of rights by the Security Agent under any of the Security
Documents, permit AMD Holding, AMD Admin or (prior to the Substitution (if any))
AMD Saxony LLC to), unless the Agent (acting on the instructions of an
Instructing Group) shall have otherwise consented in writing:

     (i)    terminate, amend or modify, or agree to the termination, amendment
            or modification, of any Operative Document, other than (w) the AMD
            Inc. Primary Bank Credit Agreement (which may be amended, modified
            or terminated in accordance with Section 13.3), (x) the Equipment
            Supply Contracts that are not Material Equipment Supply Contracts,
            (y) the Service Contracts that are not Material Service Contracts,
            or (z) in the case of the Project Budget, the Approved Project
            Budget, the Project Schedule, the Approved Project Schedule, and the
            Management Plan, as expressly provided hereunder; provided, that AMD
            Inc. may terminate the AMD Holding Wafer Purchase Agreement or the
            AMD Holding Research Agreement only in accordance with the express
            termination provisions thereof; provided, further, that AMD Holding
            may terminate the AMD Saxonia Wafer Purchase Agreement or the AMD
            Saxonia Research Agreement only in accordance with the express
            termination provisions thereof; and provided, further, that the AMD
            Saxonia Hedging Contract may be terminated only in accordance with
            the express termination provisions thereof. The foregoing
            notwithstanding, AMD Saxonia may amend or modify, or agree to the
            amendment or modification of, the Design/Build Agreement, any
            Material Equipment Supply Contract, any Material Service Contract,
            or the Plans and Specifications to the extent such amendment or
            modification does not, individually or in the aggregate, decrease or
            adversely affect (x) the value or use of the Plant and the Design
            Center (or of the rights of the Banks with respect

                                       67



              thereto) in any material respect, or (y) the capacity of the Plant
              to perform, on a substantially continuous basis, the functions for
              which it was specifically designed in accordance with the plans
              and specifications as originally approved by the Technical Advisor
              and the Agent for purposes of the Operative Documents; provided,
              that, prior to Completion, no such amendment or modification will,
              individually or in the aggregate, be inconsistent with the
              Approved Project Budget or the Approved Project Schedule.

      (ii)    engage in any activities other than those contemplated by the
              Operative Documents to which it is a party or the transactions
              contemplated thereby and activities reasonably incidental thereto.

      (iii)   create, incur, assume, or suffer to exist any Encumbrance in,
              upon, or with respect to any of its properties or assets, whether
              now owned or hereafter acquired, or assign or otherwise convey any
              right to receive income to secure any obligation, except as
              contemplated by (1) the AMD Holding Security Documents, (2) the
              AMD Saxony LLC Security Documents, (3) the AMD Admin Security
              Documents and (4) for Permitted Encumbrances.

      (iv)    create, incur, assume, or suffer to exist any Indebtedness,
              whether current or funded, except current accounts and other
              amounts payable in the ordinary course of business, and except to
              the extent contemplated by the Operative Documents.

      (v)     create, incur, assume, or suffer to exist any obligations as
              lessee for the rental or hire of real or personal property of any
              kind whatsoever.

      (vi)    assume, guarantee, or endorse, or otherwise become directly or
              contingently liable in respect of, any obligation of any Person,
              except pursuant to the Operative Documents to which it is a party.

      (vii)   merge with or into or consolidate with any Person, or, acquire,
              lease, or purchase, all or substantially all of the assets or
              stock of any class of, or any partnership or joint venture
              interest in, any Person, or create or acquire any Subsidiary,
              except, with respect to AMD Holding, for the acquisition of AMD
              Saxonia and AMD Admin.

      (viii)  sell, lease, assign, transfer, or otherwise dispose of any of its
              assets, including its accounts receivable, except as contemplated
              by the Operative Documents or in connection with the Conversion
              and the Substitution (if any); or issue or sell any shares of any
              class of its capital stock to any Person except, with respect to
              AMD Holding and AMD Saxony LLC, to AMD Inc. and except, with
              respect to AMD Admin, to AMD Holding.

      (ix)    make any loan or advance or extend any credit to any Person other
              than AMD Saxonia or as contemplated by the AMD Holding Wafer
              Purchase Agreement, or purchase or otherwise acquire the capital
              stock or obligation of, or any investment in, any Person other
              than AMD Saxonia, in each case other than Cash Equivalent

                                       68



              Investments which have been pledged to the Security Agent pursuant
              to the AMD Holding Security Documents.

      (x)     apply for or become liable with respect to any letter of credit or
              acceptance financing; or enter into or become liable with respect
              to any interest or currency swap, hedge, exchange, or other
              similar obligation.

      (xi)    purchase any shares of, or interest in, any Person, other than,
              with respect to AMD Holding, shares of, or interest in, AMD
              Saxonia or AMD Admin, and, with respect to AMD Saxony LLC, the
              re-transfer of Euro 250 capital interest (Pflichteinlage) in AMD
              Saxonia in connection with the Conversion, or redeem any of its
              shares, declare or pay any dividend thereon or make any
              distribution to its shareholders, except for any such distribution
              made as a result of the transactions contemplated by Section 6.3
              or as otherwise contemplated by the Operative Documents; or in the
              case of AMD Saxony LLC, AMD Admin or AMD Holding, accept any
              distributions, or accept any payments of profits (Gewinnanspruch)
              including but not limited to, any and all rights and claims
              arising in connection with the capital accounts (Kapitalkonten),
              loan accounts (Darlehenskonten), and the private accounts
              (Privatkonten) of any partner (Gesellschafter), any claim to a
              distribution-quote (Auseinandersetzungsanspruch) including but not
              limited to any compensation in case of termination (Auflosung), in
              particular claims for liquidation proceeds (Liquidationserlos),
              withdrawal (Ausscheiden) of a partner, repaid capital in case of a
              capital decrease (Herabsetzung der Einlage oder der
              Pflichteinlage), repayment of capital (Ruckzahlung von Einlagen)
              or any other pecuniary claims (geldwerte Forderungen) from AMD
              Saxonia, except for any such distribution or payment of profits
              made as a result of the transactions contemplated by Section 6.3
              or as otherwise contemplated by the Operative Documents.

      (xii)   except as provided in the Management Service Agreement, pay any
              salary, compensation, or bonus of any character to any officer,
              director, or employee of AMD Holding or any Affiliate thereof, or
              of AMD Admin or any Affiliate thereof or of AMD Saxony LLC or any
              Affiliate thereof or provide any such Person with any medical,
              surgical, dental, hospital, disability, unemployment, retirement,
              pension, vacation, or insurance benefit of any kind or adopt,
              establish, or maintain any plan, fund, or program to provide any
              such benefit.

      (xiii)  enter into any transaction with AMD Inc. or an Affiliate thereof
              (other than AMD Saxonia) on a basis materially less favourable to
              AMD Holding, AMD Admin or AMD Saxony LLC, as the case may be, than
              would be the case if such transaction had been effected with a
              Person other than AMD Inc. or an Affiliate thereof.

      (xiv)   open or maintain a bank account with any Person, except for demand
              or other deposit accounts at the Agent and at Security Agent.

      (xv)    amend or modify the Organizational Documents of AMD Saxonia, AMD
              Saxony LLC or AMD Admin.

                                       69



      (xvi)   issue any power of attorney or other contract or agreement giving
              any Person power or control over the day-to-day operations of AMD
              Holding's business, AMD Admin's business or AMD Saxony LLC's
              business, as the case may be, except as contemplated by the
              Operative Documents.

      (xvii)  commence, or join with any other creditor in commencing, any
              bankruptcy, reorganization, or insolvency proceeding with respect
              to AMD Saxonia or AMD Inc.

      (xviii) enter into any agreement other than as contemplated by the
              Operative Documents to which it is or will be a party or under any
              instrument or document delivered or to be delivered by it
              hereunder or thereunder, or in connection herewith or therewith.

      (xix)   make any significant change in accounting treatment or reporting
              practices, except as required by GAAP, or change its Fiscal Year.

      (xx)    create, incur, assume, or suffer to exist any Encumbrance with
              respect to its rights under or in respect of the Sponsors' Loan
              Agreement or the Revolving Loan Facility Agreement, except as set
              forth in the Security Documents.

      (xxi)   permit AMD Saxony LLC to conduct any activities other than as
              general partner of AMD Saxonia, nor permit AMD Admin to conduct
              any activities other than as limited partner of AMD Saxonia (and
              as substitute general partner of AMD Saxonia, following the
              Substitution (if any)), nor permit AMD Holding to conduct any
              activities other than as limited partner of AMD Saxonia or as
              contemplated by the Operative Documents.

SECTION 13.6   Affirmative Covenants of the Additional Partner Companies. The
Additional Partner Companies, jointly and severally, agree, so long as any
Primary Secured Obligations shall remain outstanding or any Bank shall have any
commitment under or arising out of the Loan Agreement, that each of AMD Admin
and (prior to the Substitution (if any)) AMD Saxony LLC will, unless the
Security Agent shall have enforced any of the Security or the Agent (acting on
the instructions of an Instructing Group) shall have otherwise consented in
writing:

      (i)     furnish to the Agent (with copies for each of the Banks):

              (a)  as soon as available, and in any event within ninety (90)
                   days after the end of each calendar year, financial
                   statements of AMD Admin consisting of a balance sheet of AMD
                   Admin as at the end of such calendar year and a profit and
                   loss statement and cash flow statement of AMD Admin for such
                   calendar year, setting forth in comparative form the
                   corresponding figures for the preceding calendar year (to the
                   extent applicable), all in reasonable detail and certified by
                   independent certified public accountants of recognised
                   national standing and by an authorised financial officer of
                   each of AMD Admin as fairly presenting in accordance with
                   GAAP, consistently applied, the financial position and
                   results of operations of AMD Admin;

                                       70



              (b)  as soon as available, and in any event within ninety (90)
                   days after the end of each Fiscal Year of AMD Saxony LLC,
                   financial statements consisting of a balance sheet of AMD
                   Saxony LLC as at the end of such Fiscal Year and a statement
                   of income and statement of shareholders' equity and cashflows
                   of AMD Saxony LLC for such Fiscal Year, setting forth in
                   comparative form the corresponding figures for the preceding
                   Fiscal Year (to the extent applicable), all in reasonable
                   detail and certified by independent certified public
                   accountants of recognised national standing and by an
                   authorised financial officer of AMD Saxony LLC as fairly
                   presenting in accordance with GAAP, consistently applied, the
                   financial position and results of operations of AMD Saxony
                   LLC;

              (c)  promptly following the Additional Partner Companies' receipt
                   or transmission thereof, and unless otherwise concurrently
                   delivered by another AMD Company to the Agent under an
                   Operative Document, a copy of each notice, report, schedule,
                   certificate, financial statement, or other document furnished
                   pursuant to any of the Operative Documents if such notice,
                   report, schedule, certificate, financial statement, or other
                   document could reasonably be considered material to the Agent
                   or any Bank in connection with the Operative Documents and
                   the entirety of the transactions contemplated thereby; and

              (d)  such other information with respect to the business affairs,
                   financial condition, and/or operations of the Additional
                   Partner Companies as the Agent or any Bank (acting through
                   the Agent) may from time to time reasonably request for
                   purposes of the transactions contemplated by the Operative
                   Documents.

      (ii)    pay and perform all of its obligations under each of the Operative
              Documents to which it is a party in the manner and at the time
              contemplated therein.

      (iii)   ensure that 100% of the capital partnership interests
              (Kapitalanteile) in AMD Saxonia shall be held by AMD Admin (as to
              Euro 250), AMD Holding (as to at least 99.99% (rounded to two
              decimal points) and AMD Saxony LLC (prior to a Substitution (if
              any)) (as to Euro 250 prior to its re-transfer of a fractional
              interest pursuant to the Conversion Documents, and as to 0%
              following such re-transfer), each of which shall hold no
              investment in any other person (except that AMD Admin is a
              wholly-owned subsidiary of AMD Holding) and that AMD Holding and
              AMD Saxony LLC shall be, in turn, wholly-owned subsidiaries of AMD
              Inc.

      (iv)    with respect to AMD Saxony LLC, retransfer to AMD Holding its
              capital interest (Pflichteinlage) of Euro 250 in AMD Saxonia in
              accordance with the Assignment and Trust Agreement.

      (v)     pay or discharge (a) all taxes, assessments, and governmental
              charges or levies imposed upon it or upon its income or profits or
              any property belonging to it prior to the date on which penalties
              attach thereto, and (b) all lawful claims prior to the

                                       71



              time they become an Encumbrance upon any property of any of the
              Additional Partner Companies, and other than taxes, assessments,
              charges, levies, or claims included in clauses (a) and (b) above
              which are not, individually or collectively, substantial in
              aggregate amount; provided, that (after providing notice thereof
              to the Agent) neither AMD Saxony LLC nor AMD Admin shall be
              required to pay or discharge any such tax, assessment, charge,
              levy, or claim while the same is being contested by it in good
              faith and by appropriate proceedings and adequate book reserves
              have been established with respect thereto, and so long as the
              lien or charge resulting from the nonpayment or non-discharge of
              such tax, assessment, charge, levy, or claim shall not,
              individually or in the aggregate, have a Material Adverse Effect.

      (vi)    cause AMD Saxonia to preserve and maintain its existence as a
              Limited Partnership, rights, privileges, and franchises in the
              jurisdiction of its incorporation, and cause AMD Saxonia to not
              have operations in any other jurisdiction.

      (vii)   comply in all material respects with all laws, rules, regulations,
              and governmental orders (federal, state, local, and foreign)
              having applicability to it or to the business or businesses at any
              time conducted by each of the Additional Partner Companies except
              to the extent that any such noncompliance, individually or in the
              aggregate, could not reasonably be expected to have a Material
              Adverse Effect.

      (viii)  promptly following a request from the Security Agent to do so and
              at the Additional Partner Companies' own expense, take all such
              lawful action as the Security Agent may reasonably request to
              enforce or secure the performance by each other AMD Company under
              any Operative Document to which the Additional Partner Companies
              are a party of such AMD Company's respective obligations under and
              in connection with the applicable Operative Document in accordance
              with the respective terms thereof, and exercise any right of
              termination or remedy available to the Additional Partner
              Companies thereunder or in connection therewith to the extent and
              in the manner reasonably directed by the Security Agent,
              including, without limitation, the institution of legal or
              administrative actions or proceedings to compel or enforce
              performance by each other AMD Company of its respective
              obligations thereunder, or to recover any payment due the
              Additional Partner Companies thereunder.

      (ix)    keep, or cause to be kept, adequate records and books of account,
              in which complete entries are to be made reflecting its business
              and financial transactions, such entries to be made in accordance
              with GAAP consistently applied in the case of financial
              transactions or as otherwise required by applicable rules and
              regulations of any governmental agency or regulatory authority
              (federal, state, local or foreign) having jurisdiction over the
              Additional Partner Companies, or the transactions contemplated by
              this Agreement or the other Operative Documents to which it is or
              will be a party.

                                       72



     (x)    maintain, obtain or effect all Governmental Approvals which may at
            any time or from time to time be necessary for the due
            authorization, execution, delivery, performance, legality, validity,
            or enforceability of each of the Operative Documents to which it is
            or will be a party.

     (xi)   with respect to AMD Admin, promptly pay proceeds from any tax
            refunds to AMD Saxonia.

     (xii)  following the Conversion, promptly execute a declaration of
            liability substantially in the same form attached as Appendix Four
            to the SAB/Dresdner Subsidy Agreement, amended to reflect the
            addition of the Additional Partner Companies and promptly deliver or
            cause to be delivered, to the Agent the original executed version of
            the Power of Attorney referred to in para (xxiii) of the definition
            of Conversion Documents which shall be held by the Agent in
            accordance with the Operative Documents.

SECTION 13.7 Negative Covenants of the Additional Partner Companies. The
Additional Partner Companies, jointly and severally agree, so long as any
Primary Secured Obligation shall remain outstanding or any Bank shall have any
commitment under or arising out of the Loan Agreement, that neither AMD Admin
nor (prior to the Substitution (if any)) AMD Saxony LLC will, unless the
Security Agent shall have enforced any of the Security or the Agent (acting on
the instructions of an Instructing Group) shall have otherwise consented in
writing:

     (i)    terminate, amend or modify, or agree to the termination, amendment
            or modification, of any Operative Document to which it is a party.

     (ii)   engage in any activities other than those contemplated by the
            Operative Documents to which it is a party or the transactions
            contemplated thereby and activities reasonably incidental thereto.

     (iii)  create, incur, assume, or suffer to exist any Encumbrance in, upon,
            or with respect to any of its properties or assets, whether now
            owned or hereafter acquired, or assign or otherwise convey any right
            to receive income to secure any obligation, except as contemplated
            by (1) the AMD Saxony LLC Security Documents, (2) the AMD Admin
            Security Documents and (3) for Permitted Encumbrances.

     (iv)   create, incur, assume, or suffer to exist any Indebtedness, whether
            current or funded, except current accounts and other amounts payable
            in the ordinary course of business, and except to the extent
            contemplated by the Operative Documents.

     (v)    create, incur, assume, or suffer to exist any obligations as lessee
            for the rental or hire of real or personal property of any kind
            whatsoever.

     (vi)   assume, guarantee, or endorse, or otherwise become directly or
            contingently liable in respect of, any obligation of any Person,
            except pursuant to the Operative Documents to which it is a party.

                                       73



     (vii)  merge with or into or consolidate with any Person, or, acquire,
            lease, or purchase, all or substantially all of the assets or stock
            of any class of, or any partnership or joint venture interest in,
            any Person, or create or acquire any Subsidiary, except for AMD
            Saxonia.

     (viii) sell, lease, assign, transfer, or otherwise dispose of any of its
            assets, including its accounts receivable, except as contemplated by
            the Operative Documents or in connection with the Conversion and the
            Substitution (if any); or issue or sell any shares of any class of
            its capital stock to any Person except, with respect to AMD Saxony
            LLC, to AMD Inc. and except, with respect to AMD Admin, to AMD
            Holding in accordance with the Conversion Documents.

     (ix)   make any loan or advance or extend any credit to any Person other
            than AMD Saxonia, or purchase or otherwise acquire the capital stock
            or obligation of, or any investment in, any Person other than AMD
            Saxonia, and in each case other than Cash Equivalent Investments
            which have been pledged to the Security Agent pursuant to the
            relevant Security Documents.

     (x)    apply for or become liable with respect to any letter of credit or
            acceptance financing; or enter into or become liable with respect to
            any interest or currency swap, hedge, exchange, or other similar
            obligation.

     (xi)   purchase any shares of, or interest in, any Person, other than, with
            respect to AMD Saxony LLC, the re-transfer of Euro 250 partnership
            interest in AMD Saxonia in connection with the Conversion, or redeem
            any of its shares, declare or pay any dividend thereon or make any
            distribution to its shareholders, except for any such redemption or
            distribution made as a result of the transactions contemplated by
            Section 6.3 or as otherwise contemplated by the Operative Documents;
            or accept any distributions or accept any payments of profits
            (Gewinnanspruch) including but not limited to, any and all rights
            and claims arising in connection with the capital accounts
            (Kapitalkonten), loan accounts (Darlehenskonten), and the private
            accounts (Privatkonten) of any partner (Gesellschafter), any claim
            to a distribution-quote (Auseinandersetzungsanspruch) including but
            not limited to any compensation in case of termination (Auflosung),
            in particular claims for liquidation proceeds (Liquidationserlos),
            withdrawal (Ausscheiden) of a partner, repaid capital in case of a
            capital decrease (Herabsetzung der Einlage oder der Pflichteinlage),
            repayment of capital (Ruckzahlung von Einlagen) or any other
            pecuniary claims (geldwerte Forderungen) from AMD Saxonia, except
            for any such distribution or payment of profits made as a result of
            the transactions contemplated by Section 6.3 or as otherwise
            contemplated by the Operative Documents.

     (xii)  pay any salary, compensation, or bonus of any character to any
            officer, director, or employee of the Additional Partner Companies
            or provide any such Person with any medical, surgical, dental,
            hospital, disability, unemployment, retirement, pension, vacation,
            or insurance benefit of any kind or adopt, establish, or maintain
            any plan, fund, or program to provide any such benefit.

                                       74



    (xiii)  enter into any transaction with AMD Inc. or an Affiliate thereof
            (other than AMD Saxonia) on a basis materially less favourable to
            the Additional Partner Companies than would be the case if such
            transaction had been effected with a Person other than AMD Inc. or
            an Affiliate thereof.

    (xiv)   open or maintain a bank account with any Person, except for demand
            or other deposit accounts at the Agent and at Security Agent.

    (xv)    amend or modify the Organizational Documents of AMD Saxonia or the
            Additional Partner Companies.

    (xvi)   issue any power of attorney or other contract or agreement giving
            any Person power or control over the day-to-day operations of the
            Additional Partner Companies' business, except as contemplated by
            the Operative Documents.

    (xvii)  commence, or join with any other creditor in commencing, any
            bankruptcy, reorganization, or insolvency proceeding with respect to
            AMD Saxonia or AMD Inc.

    (xviii) enter into any agreement other than as contemplated by the Operative
            Documents to which it is or will be a party or under any instrument
            or document delivered or to be delivered by it hereunder or
            thereunder, or in connection herewith or therewith.

    (xix)   make any significant change in accounting treatment or reporting
            practices, except as required by GAAP, or change its Fiscal Year.

    (xx)    with respect to AMD Saxony LLC, conduct any activities other than as
            general partner of AMD Saxonia or with respect to AMD Admin, conduct
            any activities other than as limited partner of AMD Saxonia (and as
            substitute general partner of AMD Saxonia, following the
            Substitution (if any)).

SECTION 13.8 Recourse to AMD Inc. for Breach of Covenant. It is expressly
understood and agreed by the parties hereto that the obligations of AMD Saxonia
under the Loan Agreement are intended to be limited recourse obligations from
the perspective of AMD Inc. and that the covenants of the Sponsors and the
Additional Partner Companies contained in this Article XIII are not intended to
represent a guaranty of AMD Saxonia's obligations under the Loan Agreement.
Accordingly, (i) neither AMD Inc. nor its assets (other than its interests in
AMD Holding and AMD Saxony LLC) shall be exposed to liability (whether in
damages or otherwise) for breach of any covenant contained in this Article XIII
to the extent that such damages would otherwise result in AMD Inc. incurring
greater financial exposure than the aggregate amount otherwise agreed to be
payable by AMD Inc. pursuant to this Agreement and the other Operative
Documents, and (ii) neither AMD Holding nor any Additional Partner Company shall
have any right of contribution against AMD Inc. arising from any payment made by
AMD Holding or such Additional Partner Company under this Agreement or the
Sponsors' Guaranty to the extent that AMD Inc. provides funds for the purpose of
such payment by contributions to AMD Holding's or such Additional Partner
Company's stated capital or capital reserves and/or by loans to AMD Holding or
such Additional Partner Company; provided, however, that the provisions of

                                       75



this Section 13.8 shall not be construed to absolve AMD Inc. for its liability,
whether in damages or otherwise, for actions or omissions constituting fraud or
misrepresentation or breach of warranty; and provided, further that the
provisions of this Section 13.8 shall not preclude the Security Agent from
seeking temporary relief (if otherwise available) for any prospective breach by
AMD Inc. of its covenants contained in this Article XIII.

                                  ARTICLE XIV
                  Costs and Expenses; Indemnities; Taxes; Etc.

SECTION 14.1 Costs and Expenses. The Sponsors, jointly and severally, agree to
pay (to the extent not previously paid by AMD Saxonia promptly following a
demand by the Agent therefor, it being understood and agreed that the Agent will
demand such payment for the costs and expenses of the preparation of this
Agreement) all costs and expenses (including reasonable legal fees and expenses)
of the Agent, the Security Agent, and the Paying Agent in connection with the
negotiation, preparation, execution, and delivery of this Agreement, any
amendments or modifications of (or supplements to) this Agreement, and any and
all other documents furnished pursuant hereto or in connection herewith, as well
as all costs and expenses (including, without limitation, reasonable attorneys'
fees and expenses) if any, in connection with the enforcement of this Agreement
or any other agreement furnished by them prior to the enforcement by the
Security Agent of any of the Security pursuant hereto or in connection herewith.

SECTION 14.2 General Indemnity. The Sponsors, jointly and severally, hereby
agree to indemnify, exonerate, and hold the Agent, the Security Agent, and the
Paying Agent, and each of the officers, directors, employees of the Agent, the
Security Agent, and the Paying Agent (herein collectively called the
"Indemnitees") free and harmless from and against any and all actions, claims,
losses, liabilities, damages, and expenses, including, without limitation,
reasonable legal fees and expenses (herein collectively called the "Indemnified
Liabilities"), which may be incurred by or asserted against the Indemnitees or
any Indemnitee as a result of, or arising out of, or relating to, or in
connection with:

     (i)    the failure by either Sponsor or the relevant Additional Partner
            Company to comply with its respective obligations under this
            Agreement, the Conversion Documents, the Amendment Agreements, the
            Sponsors' Guaranty, the Sponsors' Loan Agreement and the Revolving
            Loan Facility Agreement (subject, in the case of Indemnified
            Liabilities arising from Article XIII, to the provisions of Section
            13.8);

     (ii)   the inaccuracy by either Sponsor of any of its representations and
            warranties contained in any of the Operative Documents to which it
            is a party as and when made or reaffirmed as the case may be
            (provided that AMD Inc. shall have no liability under this Section
            14.2 in respect of any inaccuracy by AMD Holding of the
            representation and warranty contained in Section 12.2 (xi)); and

     (iii)  any investigation, litigation, or proceeding related to this
            Agreement or the consummation of the transactions contemplated
            hereby, whether or not any such Indemnitee is a party thereto, and,
            to the extent that the foregoing undertaking may be unenforceable
            for any reason, the Sponsors, jointly and severally, hereby

                                       76



            agree to make the maximum contribution to the payment and
            satisfaction of each of the Indemnified Liabilities which is
            permissible under applicable law.

In no event shall AMD Inc. indemnify the Indemnitees against any liabilities of
AMD Saxony LLC or, following the Substitution, AMD Admin, arising solely by
virtue of AMD Saxony LLC, or, following the Substitution, AMD Admin, being
generally liable for the obligations of AMD Saxonia as the general partner of
AMD Saxonia.

SECTION 14.3 Undertaking to Contribute. AMD Inc. hereby undertakes that in the
event:

     (i)    Either: (A) a liability is imposed on AMD Saxonia, AMD Holding or
            AMD Admin as a result of the German tax authorities
            re-characterising interest on the Sponsors' Loans or Revolving Loans
            as dividends; or (B) a liability is imposed on AMD Saxonia, AMD
            Holding or AMD Admin as a result of the German tax authorities
            ruling that AMD Saxonia, AMD Holding or AMD Admin, as the case may
            be, is not sufficiently profitable (any such liability referred to
            in (A) and (B) being together, the "Liabilities"), and, in the case
            of either (A) or (B)

     (ii)   AMD Saxonia, AMD Holding and/or AMD Admin make payments to the
            German tax authorities in respect of the Liabilities as required by
            German law,

AMD Inc. shall advance Sponsors' Loans to AMD Saxonia or contribute Equity
Capital (or other contributions to AMD Saxonia's capital reserves) to AMD
Holding (and AMD Inc. shall to the extent necessary and depending on where the
Liability arises, contribute sufficient funds or otherwise cause sufficient
funds to be made available, to AMD Holding as shall be necessary to enable AMD
Holding to so contribute to AMD Saxonia and AMD Inc. shall cause AMD Holding to
do the same) in an amount equal to the amounts paid by AMD Saxonia (including
payments by AMD Saxonia to AMD Holding or AMD Admin) in respect of the
Liabilities, as follows:

To the extent AMD Saxonia has drawn all amounts available for drawing under the
Revolving Loan Facility Agreement prior to the payment of such Liabilities, such
Sponsors' Loans or Equity Capital contribution shall be made at the same time as
the payment of the Liabilities.

To the extent AMD Saxonia has not drawn all amounts available for drawing under
the Revolving Loan Facility Agreement prior to the payment of such Liabilities,
such Sponsors' Loans or Equity Capital contribution shall be made at the time
that AMD Saxonia draws all amounts available for drawing under the Revolving
Loan Facility Agreement.

SECTION 14.4 SAB Related Agreements Indemnity. The Sponsors, jointly and
severally, hereby agree to indemnify, exonerate, and hold the Agent, and each of
the officers, directors, employees of the Agent (herein collectively called the
"SAB Indemnitees") free and harmless from and against any and all actions,
claims, losses, liabilities, damages, and expenses, including, without
limitation, reasonable legal fees and expenses (herein collectively called the
"Indemnified SAB Liabilities"), which may be incurred by or asserted against the
SAB Indemnitees or any SAB Indemnitee as a result of, or arising out of, or
relating to, or in

                                       77



connection with, the SAB Related Agreements (other than any such Indemnified SAB
Liabilities finally determined by a court of competent jurisdiction to have
resulted from the gross negligence or wilful misconduct of an SAB Indemnitee),
and, to the extent that the foregoing undertaking may be unenforceable for any
reason, the Sponsors, jointly and severally, hereby agree to make the maximum
contribution to the payment and satisfaction of each of the Indemnified SAB
Liabilities which is permissible under applicable law.

SECTION 14.5 Payments Free and Clear of Taxes, etc. Each of the Sponsors and
Additional Partner Companies hereby agree that:

         (a)   All payments by such Sponsor or Additional Partner Company
               hereunder shall be made to the Person entitled thereto in Same
               Day Funds, free and clear of and without deduction for any
               present or future income, excise, stamp, or franchise taxes and
               other taxes, fees, duties, withholdings, or other charges of any
               nature whatsoever imposed by any taxing authority on such
               payments, but excluding taxes imposed on or measured by such
               Person's net income or receipts or the net income or receipts of
               any branch thereof (such non-excluded items being called
               "Taxes"). In the event that any withholding or deduction from any
               payment to be made by either of the Sponsors or the Additional
               Partner Companies hereunder is required in respect of any Taxes
               pursuant to any applicable law, rule, or regulation, then such
               Sponsor or Additional Partner Company will, subject to Section
               14.5(d),

               (i)    pay directly to the relevant authority the full amount
                      required to be so withheld or deducted;

               (ii)   promptly forward to such Person (with a copy to the
                      Security Agent) an official receipt or other documentation
                      satisfactory to the Security Agent evidencing such payment
                      to such authority; and

               (iii)  pay to such Person such additional amount or amounts as is
                      necessary to ensure that the net amount actually received
                      by such Person will equal the full amount such Person
                      would have received had no such withholding or deduction
                      been required.

               Moreover, if any Taxes are directly asserted against any Person
               entitled to receive a payment under this Agreement with respect
               to any payment received by such Person hereunder, such Person may
               pay such Taxes and the Sponsors or Additional Partner Companies
               will promptly pay such additional amounts (including any
               penalties, interest, or expenses, but only (in the case of
               penalties or interest) to the extent not resulting from a
               negligent or wilful failure to pay any or all of such Taxes by
               such Person, as the case may be) as is necessary in order that
               the net amount received by such Person after the payment of such
               Taxes (including any Taxes on such additional amount) shall equal
               the amount such Person would have received had no such Taxes been
               asserted.

                                       78



                  (b) The additional amount or amounts that either Sponsor or
                      Additional Partner Company shall be required to pay
                      pursuant to clause (iii) of Section 14.5(a) shall be
                      reduced, to the extent permitted by applicable law, by the
                      amount of the offsetting tax benefits, if any, as
                      determined by the relevant Person in the exercise of its
                      sole discretion, which such Person actually receives and
                      utilises as a result of such Sponsor's or Additional
                      Partner Company's payment under clause (i) of Section
                      14.5(a) to the relevant authority (it being expressly
                      understood and agreed that such Person shall be required
                      to use commercially reasonable efforts to claim or utilise
                      any such benefit which may be available to it unless it
                      believes in good faith that to do so would be inconsistent
                      with its internal tax and other policies or if, in its
                      good faith judgment, it would be disadvantaged in any
                      respect with respect to its tax position or planning).

                  (c) Subject to the relevant Person complying with Section
                      14.5(d) below, if any of the Sponsors or Additional
                      Partner Companies fails to pay any Taxes when due to the
                      appropriate taxing authority or fails to remit to the
                      applicable recipient hereunder the required receipts or
                      other required documentary evidence, such Sponsor or
                      Additional Partner Company shall indemnify such Person for
                      any incremental Taxes, interest, or penalties that may
                      become payable by such Person as a result of any such
                      failure.

                  (d) Each Person entitled to receive a payment hereunder that
                      is entitled to claim an exemption (either on its own
                      account or for the account of the relevant Sponsor or
                      Additional Partner Company) in respect of all or a portion
                      of any Taxes which are otherwise required to be paid or
                      deducted or withheld pursuant to this Section 14.5 in
                      respect of any payments made by a Sponsor or Additional
                      Partner Company hereunder shall, within a reasonable time
                      after receiving a written request from such Sponsor or
                      Additional Partner Company, provide such Sponsor or
                      Additional Partner Company with such certificates as may
                      be appropriate in order to obtain the benefits of such
                      exemption.

                  (e) Without prejudice to the survival of any other agreement
                      of the Sponsors or the Additional Partner Companies
                      hereunder, the agreements and obligations of the Sponsors
                      or Additional Partner Companies contained in this Section
                      14.5 shall survive the payment in full of the principal of
                      and interest on the loans and other financial
                      accommodations made to AMD Saxonia under the Loan
                      Agreement.

SECTION 14.6 Judgment. The Sponsors and Additional Partner Companies hereby
agree that:

                  (a) If, for the purposes of obtaining a judgment in any court,
                      it is necessary to convert a sum due hereunder in Deutsche
                      Marks into another currency, the rate of exchange used
                      shall be that at which in accordance with normal banking
                      procedures the Security Agent could purchase Deutsche
                      Marks

                                       79



                      with such other currency on the Business Day preceding
                      that on which final judgment is given.

                  (b) The obligation of each of the Sponsors or the Additional
                      Partner Companies in respect of any sum due from it to the
                      Security Agent, the Agent, the Paying Agent, or any Bank
                      hereunder shall, notwithstanding any judgment in a
                      currency other than Deutsche Marks be discharged only to
                      the extent that on the Business Day following receipt by
                      the Security Agent, the Agent, the Paying Agent, or such
                      Bank, as the case may be, of any sum adjudged to be so due
                      in such other currency, the Security Agent, the Agent, the
                      Paying Agent, or such Bank, as the case may be, may, in
                      accordance with normal banking procedures, purchase
                      Deutsche Marks with such other currency; in the event that
                      the Deutsche Marks so purchased are less than the sum
                      originally due to the Security Agent, the Agent, the
                      Paying Agent, or any Bank, in Deutsche Marks, such Sponsor
                      or Additional Partner Company, as a separate obligation
                      and notwithstanding any such judgment, hereby indemnifies
                      and holds harmless the Security Agent, the Agent, the
                      Paying Agent, and each Bank against such loss, and if the
                      Deutsche Marks so purchased exceed the sum originally due
                      to the Security Agent, the Agent, or such Bank in Deutsche
                      Marks, the Security Agent, the Agent, the Paying Agent, or
                      such Bank, as the case may be, shall remit to the relevant
                      Sponsor or Additional Partner Company such excess.


SECTION 14.7 License Agreement. With respect to the License Agreement,

                  (a) AMD Inc. hereby waives, and agrees to cause each of its
                      Subsidiaries other than AMD Saxonia to waive, any and all
                      rights, claims and/or causes of action such Person now has
                      or in the future may have against AMD Saxonia, its
                      successors and assigns, the Agent, the Security Agent, the
                      Paying Agent, any Bank, any receiver appointed to operate
                      the Plant, or a third party purchaser of the capital
                      stock, or of all or substantially all of the assets, of
                      AMD Saxonia (herein collectively referred to as the
                      "Beneficiaries" and individually as a "Beneficiary"),
                      based on: (i) its use, in any manner whatsoever, of any
                      Non-Proprietary Know-how or of Information Residuals (as
                      such terms are defined in the License Agreement); (ii) its
                      use, within the scope of the license granted in Section
                      3(a) of the License Agreement, of the Developed
                      Intellectual Property (as defined in the License
                      Agreement), or (iii) its use, in any manner whatsoever, of
                      Post Research Agreement AMD Saxonia Developed Improvements
                      or Post Research Agreement AMD Saxonia Developed
                      Intellectual Property (as such terms are defined in the
                      License Agreement). The preceding sentence
                      notwithstanding, AMD Inc. does not waive any rights,
                      claims or causes of action based on the infringement
                      and/or misappropriation of any patents, copyrights, mask
                      works, trademarks and trade secrets, whether registered or
                      not, which are owned by AMD Inc. or by an Affiliate of AMD
                      Inc. other than AMD Saxonia and

                                       80



                      not licensed to AMD Saxonia under the License Agreement;
                      provided, however, that the use of Information Residuals
                      (as so defined) shall not be deemed to constitute an
                      infringement and/or misappropriation of any intellectual
                      property rights of AMD Inc. or any of its Subsidiaries
                      (other than AMD Saxonia).

                  (b) each Sponsor hereby acknowledges and agrees that,
                      following the termination of the AMD Saxonia Wafer
                      Purchase Agreement, the operation of the Plant by AMD
                      Saxonia, its successors and assigns, or by a Beneficiary
                      shall not, absent a separate infringement or other
                      unlawful violation, under the License Agreement or
                      otherwise, of a proprietary, substantial, and identifiable
                      right of AMD Inc., or any of its Subsidiaries other than
                      AMD Saxonia, constitute: (i) a breach of the terms of the
                      License Agreement or of any of the Service Agreements (as
                      defined in the License Agreement), or (ii) an infringement
                      upon any intellectual property right of AMD Inc. or its
                      Subsidiaries other than AMD Saxonia; and

                  (c) except where such failure was due to a breach by AMD
                      Saxonia of its covenants to cooperate with AMD Inc., if
                      AMD Inc. fails to complete the document removal process
                      set forth in Section 9 of the License Agreement within the
                      period required therein following the termination of the
                      AMD Saxonia Research Agreement, AMD Inc. and its
                      Subsidiaries other than AMD Saxonia shall be deemed to
                      have waived any and all rights, claims and/or causes of
                      action they have or in the future may have against AMD
                      Saxonia, its successors and assigns, or against a
                      Beneficiary based on the disclosure or use, for any
                      purpose, by such Person of any documentation left in the
                      Plant on the grounds that such documentation or the
                      information contained therein is proprietary to AMD Inc.
                      or its Affiliates or Subsidiaries other than (in either
                      case) AMD Saxonia.

                                   ARTICLE XV
                                  Miscellaneous

SECTION 15.1 No Waiver; Modifications in Writing. No failure or delay on the
part of the Agent or the Security Agent in exercising any right, power, or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power, or remedy preclude any other or
further exercise thereof or the exercise of any other right, power, or remedy.
The remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to the Agent or the Security Agent at law or
otherwise. No amendment, modification, supplement, termination, or waiver of or
to any provision of this Agreement, or consent to any departure by either
Sponsor therefrom, shall be effective unless the same shall be in writing and
signed by or on behalf of the Agent and the Security Agent. Any waiver of any
provision of this Agreement, and any consent to any departure by either Sponsor
from the terms of any provision of this Agreement, shall be effective only in
the specific instance and for the specific purpose for which given. No notice to
or demand on either Sponsor in any case shall entitle such Sponsor to any other
or further notice or demand in similar or other circumstances.

                                       81



SECTION 15.2 Severability of Provisions. In case any provision of this Agreement
is invalid or unenforceable, the validity or enforceability of the remaining
provisions hereof shall remain unaffected. The parties hereto shall have an
obligation to replace any invalid or unenforceable provision by a valid and
enforceable provision which approximates best the economic purpose of the
invalid provision.

SECTION 15.3 Termination. This Agreement and the obligations of the parties
hereunder shall terminate on the day that AMD Saxonia has paid in full all of
the Primary Secured Obligations, and the Banks shall have no other or further
commitments under the Loan Agreement; provided, that such obligations shall
automatically revive and be reinstated if and to the extent that AMD Saxonia
shall subsequently have obligations to any Secured Party under or in connection
with any of the Operative Documents.

SECTION 15.4 Assignment. This Agreement shall be binding upon and shall inure to
the benefit of each party hereto and their respective successors and assigns;
provided that neither AMD Inc. nor AMD Holding nor the Additional Partner
Companies shall have the right to transfer or assign their respective rights
under this Agreement without the prior written consent of the Agent and the
Security Agent.

SECTION 15.5 Notice. All notices, demands, instructions, and other
communications required or permitted to be given to or made upon any party
hereto shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage pre-paid, return receipt requested, or by
pre-paid telex, TWX, or telegram, or by pre-paid courier service, or by
telecopier, and shall be deemed to be given for purposes of this Agreement on
the day that such writing is delivered or sent to the intended recipient thereof
in accordance with the provisions of this Section 15.5. Unless otherwise
specified in a notice sent or delivered in accordance with the foregoing
provisions of this Section 15.5, notices, demands, instructions, and other
communications in writing shall be given to or made upon the respective parties
hereto at their respective addresses (or to their respective telex, TWX or
telecopier numbers) indicated below.

         To the Security Agent:

         Dresdner Bank AG, as Security Agent
         Ostra Allee 9
         01067 Dresden
         Attention:     Betreuung Unternehmenskunden
         Facsimile No.: (49) 351 489-1300

         To the Agent:

         Dresdner Bank Luxembourg S.A., as Agent
         26, rue du Marche-aux-Herbes
         L-2097 Luxembourg
         Attention:     Direktion
         Facsimile No.: (352) 4760-824

                                       82



         To AMD Inc.:

         Advanced Micro Devices, Inc.
         One AMD Place
         Sunnyvale, California  94088
         Attention:     General Counsel
         Facsimile No.: (1) (408) 749-3945

         To AMD Holding:

         AMD Saxony Holding GmbH
         Wilschdorfer Landstrasse 101
         01109 Dresden
         Attention:     Geschaftsfuhrer
         Facsimile No.: 49 351 277 91300

         To AMD Admin:

         Wilschdorfer Landstrasse 101
         01109 Dresden
         Attention:     Geschaftsfuhrer
         Facsimile No.: 49 351 277 91300

         To AMD Saxony LLC:

         One AMD Place

         Mailstop 150
         Sunnyvale, California 94088
         Attention:     Manager
         Facsimile No.: (408) 774 7399

SECTION 15.6 Relationship to Other Agreements. The rights of the Agent and the
Security Agent pursuant to this Agreement are in addition to any other rights or
remedies which the Agent and the Security Agent may have under statutory law or
other agreements between one or more of the Agent, the Security Agent, the
Banks, and AMD Inc. or AMD Holding or the Additional Partner Companies.

SECTION 15.7 Effectiveness of Agreement; Survival; Expiry of Obligation. This
Agreement shall not be effective for any purpose whatsoever prior to the
execution and delivery of the Loan Agreement by each of AMD Saxonia and the
Agent. Subject to Section 15.3 hereof, the obligations of the Sponsors under
this Agreement shall terminate, except as otherwise provided herein, upon the
payment in full of all of the Primary Secured Obligations to the Secured Parties
under or in connection with the Financing Documents and the Security Documents,
and the expiration or termination of all of their respective commitments
thereunder (the "Loan Agreement Termination Date"); provided, however, that the
obligations of the Sponsors contained in Article XIV hereof shall survive any
termination of this Agreement. Except as provided in Section 2.4 of the
Sponsors' Guaranty, the obligations of the Sponsors under the Sponsors' Guaranty
shall expire on the Loan Agreement Termination Date.

                                       83



SECTION 15.8 EMU. European Economic and Monetary Union anticipate the
introduction of a single currency and the substitution of the national
currencies of Member States participating in Monetary Union. On the date on
which the Deutsche Mark is replaced by the single currency, conversion into such
currency shall take effect. The denomination of the original currency shall be
retained for so long as this is legally permissible. Conversions shall be based
on the officially fixed rate of conversion. Neither the introduction of the
single currency nor the substitution of the national currencies of the Member
States participating in European Monetary Union nor the fixing of the official
rate of conversion nor any economic consequences that arise from any of the
aforementioned events or in connection with European Monetary Union shall give
rise to any right to terminate prematurely, contest, cancel, rescind, modify, or
renegotiate this Agreement or any of its provisions or to raise any other
objections and/or exceptions or to assert any claims for compensation. This
Agreement shall continue in full force and effect in accordance with its terms.

                                  ARTICLE XVI
                    Governing Law, Jurisdiction, and Language

SECTION 16.1 Governing Law. The form and execution of this Agreement and all
rights and obligations of the parties arising hereunder shall be governed by the
Laws of the Federal Republic of Germany.

SECTION 16.2 Jurisdiction. Each of AMD Inc., AMD Admin, AMD Saxony LLC and AMD
Holding hereby submits to the exclusive jurisdiction of the courts in Frankfurt
am Main for any dispute arising out of or in connection with this Agreement. AMD
Inc. and AMD Saxony LLC state that Advanced Micro Devices GmbH, whose address is
Rosenheimerstrasse 143b, 81671 Munich, Germany, Attention: Legal Department,
Tel: +49 89 450 530, Fax: +49 89 406 490, Telex: 841523883, is their respective
accredited agent for service of process and hereby undertake to maintain an
agent for service in Germany. The foregoing submission to jurisdiction shall not
(and shall not be construed so as to) limit the rights of the Agent or the
Security Agent to take suits, actions, or proceedings against a Sponsor or AMD
Admin or AMD Saxony LLC to enforce any judgment rendered by the courts in
Frankfurt am Main in any other court or entity of competent jurisdiction where
such Sponsor or AMD Admin or AMD Saxony LLC, as the case may be, has assets, nor
shall the taking of suits, actions, or proceedings to enforce any such judgment
in one or more jurisdictions preclude the taking of enforcement proceedings in
any other jurisdiction, whether concurrently or not.

SECTION 16.3 Use of English Language. This Agreement has been executed in the
English language. All certificates, reports, notices, and other documents and
communications given or delivered pursuant to this Agreement shall be in the
English language and, if reasonably requested by the Agent, shall be accompanied
by a certified German translation thereof. In the event of any inconsistency,
the English language version of any such document shall control.

                                       84



IN WITNESS WHEREOF, each of the parties set out below has caused this Agreement
to be duly executed and delivered by its respective officer or agent thereunto
duly authorised as of the date first above written.

                                               ADVANCED MICRO DEVICES, INC.


                                               By_______________________________

                                               Its______________________________

                                               AMD SAXONY HOLDING GMBH


                                               By_______________________________

                                               Its______________________________

                                               AMD SAXONY ADMIN GMBH


                                               By_______________________________

                                               Its______________________________

                                               AMD SAXONY LLC


                                               By_______________________________

                                               Its______________________________

                                               DRESDNER BANK LUXEMBOURG S.A.,
                                               as Agent

                                               By_______________________________

                                               Its______________________________

                                       85




                                                   DRESDNER BANK AG,
                                                   as Security Agent

                                                   By___________________________

                                                   Its__________________________

                                       86

EX-10.43(G-4)

                                                              Exhibit 10.43(g-4)
                               THIRD AMENDMENT TO
                            SPONSORS' LOAN AGREEMENT

          THIS THIRD AMENDMENT (this "Amendment"), dated 3 June 2002, is made
among ADVANCED MICRO DEVICES, INC., a corporation organised and existing under
the laws of the State of Delaware, United States of America, with its chief
executive office and principal place of business at One AMD Place, Sunnyvale,
California 94088, United States of America ("AMD Inc."); AMD SAXONY HOLDING
GMBH, Dresden, registered in the Commercial Register of the Dresden County
Court, HRB 13931 ("AMD Holding" and, together with AMD Inc. collectively, the
"Sponsors"); and AMD SAXONY MANUFACTURING GMBH, Dresden, registered in the
Commercial Register of the Dresden County Court, HRB 13186 (proposed to be known
as "AMD Saxony LLC & Co. KG" following the Conversion Effective Date) ("AMD
Saxonia").

                              W I T N E S S E T H:

          WHEREAS, AMD Saxonia has been formed for the purpose of constructing,
owning, and operating (i) the Plant and (ii) the integrated Design Center (the
construction, ownership, and operation of the Plant and the Design Center being
hereinafter called the "Project");

          WHEREAS, in order to finance the construction of the Plant and the
Design Center, and start-up costs of the operation of the Plant, inter alia, (i)
AMD Saxonia has entered into the Loan Agreement dated 11 March 1997, as amended,
providing, inter alia, for two separate senior secured term and standby
facilities aggregating up to DM 1,500,000,000 (one billion five hundred million
Deutsche Marks), and (ii) the Sponsors, the Agent, and the Security Agent have
entered into that certain Sponsors' Support Agreement dated 11 March 1997, as
amended by the First Amendment to Sponsors' Support Agreement dated 6 February
1998, the Second Amendment to Sponsors' Support Agreement dated 29 June 1999,
the Third Amendment to Sponsors' Support Agreement dated 20 February 2001 and
the Accession Agreement and Fourth Amendment to Sponsors' Support Agreement
dated of even date herewith (as amended, the "Sponsors' Support Agreement"),
providing (x) certain assurances to the Agent and Security Agent with respect to
the completion of the Project, and (y) certain undertakings to and for the
benefit of the Secured Parties;

          WHEREAS, pursuant to the Conversion Documents (as defined in the
Sponsors' Support Agreement), AMD Saxonia proposes to change its legal form to a
Kommanditgesellschaft (a limited partnership organized under the laws of the
Federal Republic of Germany), with AMD Holding and AMD Saxony Admin GmbH, with
its seat in Dresden ("AMD Admin") as its sole limited partners (Kommanditisten)
and AMD Saxony LLC, a limited liability company organized under the laws of the
State of Delaware and a wholly-owned subsidiary of AMD Inc. ("AMD Saxony LLC")
as its sole general partner (Komplementar);

                                      -1-



          WHEREAS, AMD Saxonia wishes, with the consent of the Sponsors to,
among other things, amend the Sponsors' Loan Agreement, by and among AMD Inc.,
AMD Holding, and AMD Saxonia, dated 11 March 1997, as amended by the First
Amendment to Sponsors' Loan Agreement dated 6 February 1998 and the Second
Amendment to Sponsors' Loan Agreement dated 25 June 1999 (as amended, the
"Sponsors' Loan Agreement") to decrease the interest rate payable on each of the
Sponsors' Loans; and

          WHEREAS, concurrently herewith, the relevant parties are also amending
the Sponsors' Support Agreement and certain other agreements;

          NOW, THEREFORE, the Sponsors and AMD Saxonia agree as follows:

                                    ARTICLE I
                                   Definitions

     SECTION 1.1 Definitions. Capitalized terms not otherwise defined in this
Amendment are used with the definitions assigned to them in the Sponsors' Loan
Agreement or, if not there defined, in the Sponsors' Support Agreement.

     SECTION 1.2 Construction. In this Amendment, unless the context requires
otherwise, references to Sections and Schedules are to Sections and Schedules of
the Sponsors' Loan Agreement. Section headings are inserted for reference only
and shall be ignored in construing this Amendment.

                                   ARTICLE II
                                    Amendment

     SECTION 2.1 With effect from the Conversion Effective Date, the Sponsors'
Loan Agreement is hereby amended as more particularly set out below. In all
other respects, the Sponsors' Loan Agreement shall remain in full force and
effect.

     (i)  Section 3.1 shall be deleted and replaced with the following:

          "SECTION 3.1 Interest Rate. The unpaid principal amount from time to
          time outstanding of each Sponsors' Loan shall bear interest at a rate
          per annum equal to 4% compounded monthly, with effect from January 1,
          2002. As provided in the Sponsors' Subordination Agreement, payment of
          interest on the Sponsors' Loans has been subordinated to the Senior
          Liabilities (as therein defined) and, once permitted to be paid by AMD
          Saxonia pursuant to the Sponsors' Subordination Agreement, shall be
          paid quarterly in arrears."

                                   ARTICLE III
                                  Miscellaneous

     SECTION 3.1 Representations and Warranties. Each of the Sponsors and AMD
Saxonia hereby represents and warrants, as of the date hereof and as of the
Conversion Effective Date, that:

                                      -2-



     (a)  Organisation; Corporate Power. It is duly organised and validly
existing under the laws of the jurisdiction of its organisation, and has all
necessary power and authority to execute and deliver this Amendment and,
following the Conversion Effective Date, to consummate the transactions
contemplated by the Sponsors' Loan Agreement, as amended hereby;

     (b)  Corporate Authority; No Conflict. The execution and delivery by it of
this Amendment, and the performance by it, following the Conversion Effective
Date, of its obligation under the Sponsors' Loan Agreement, as amended by this
Amendment, have been duly authorised by all necessary corporate action
(including any necessary shareholder action) on its part, and do not and will
not (i) violate any provision of any law, rule regulation, order, writ,
judgment, injunction, decree, determination, or award presently in effect having
applicability to it, or of its charter or by-laws; or (ii) result in a breach
of, result in a mandatory prepayment or acceleration of indebtedness evidenced
by or secured by, or constitute a default under, any indenture or loan or credit
agreement, or any other agreement or instrument to which it is a party or by
which it or its properties may be bound, or require the creation or imposition
of any encumbrance of any nature upon or with respect to any of the properties
now owned or hereafter acquired by it; and

     (c)  Valid and Binding Obligations. Following the Conversion Effective
Date, the Sponsors' Loan Agreement, as amended by this Amendment, shall
constitute its legal, valid, and binding obligation, enforceable against it in
accordance with its terms; subject, however, to applicable bankruptcy,
insolvency, reorganisation, moratorium, or similar laws affecting creditors'
rights generally and, as to enforceability, by general equitable principles.

     SECTION 3.2 Miscellaneous.

     (a)  This Amendment is limited as specified and shall not constitute a
modification, amendment or waiver of any other provision of the Sponsors' Loan
Agreement or any provision of any other Operative Document. Except as
specifically amended by this Amendment, the Sponsors' Loan Agreement shall
remain in full force and effect and is hereby ratified and confirmed.

     (b)  Without prejudice to the foregoing, AMD Saxonia hereby ratifies and
confirms that its obligations under the Sponsors' Loan Agreement, as amended,
shall continue in full force and effect following the Conversion.

     (c)  This Amendment shall be an Operative Document under and for purposes
of the Sponsors' Support Agreement.

     (d)  Sections 7.1, 7.2, 7.3 and 7.4 of the Sponsors' Loan Agreement shall
apply, mutatis mutandis, to this Amendment, as if set out herein in full.

     (e)  This Amendment may be executed in any number of counterparts and by
different parties on separate counterparts which when taken together shall
constitute one agreement.

                  [Remainder of page intentionally left blank.]

                                      -3-



     IN WITNESS WHEREOF, each of the parties set out below has caused this
Amendment to be duly executed and delivered by its respective officer or agent
thereunto duly authorised as of the date first above written.

                                   ADVANCED MICRO DEVICES, INC.

                                   By: /s/ Robert J. Rivet
                                      ------------------------------------------
                                   Its Senior Vice President and Chief
                                       Financial Officer

                                   AMD SAXONY HOLDING GMBH

                                   By: /s/ Hans-Raimund Deppe
                                      ------------------------------------------
                                   Dr. Hans-Raimund Deppe
                                   Its   Managing Director (Geschaftsfuhrer)


                                   AMD SAXONY MANUFACTURING GMBH

                                   By: /s/ Hans-Raimund Deppe
                                      ------------------------------------------
                                   Dr. Hans-Raimund Deppe
                                   Its   Managing Director (Geschaftsfuhrer)

EX-10.43(H-1)

                                                             Exhibit 10.43 (h-1)

                                 FIRST AMENDMENT

                                       TO

                        SPONSORS' SUBORDINATION AGREEMENT

THIS FIRST AMENDMENT (this "Amendment"), dated 20 February 2001, is made between
ADVANCED MICRO DEVICES, INC., a corporation organized and existing under the
laws of the State of Delaware, United States of America, with its chief
executive office and principal place of business at One AMD Place, Sunnyvale,
California 94088, United States of America ("AMD Inc."), AMD SAXONY HOLDING
GMBH, Dresden, registered in the Commercial Register of the Dresden County
Court, HRB 13931 ("AMD Holding"; and, together with AMD Inc., collectively, the
"Sponsors"), AMD SAXONY MANUFACTURING GMBH, Dresden, registered in the
Commercial Register of the Dresden County Court HRB 13186 ("AMD Saxonia"),
DRESDNER BANK LUXEMBOURG S.A., as Agent (and successor to Dresdner Bank AG in
such capacity) under the Loan Agreement referred to below (in such capacity, the
"Agent") for the Banks referred to below, and DRESDNER BANK AG, as Security
Agent under such Loan Agreement (in such capacity, the "Security Agent"), for
the Secured Parties referred to below.

                              W I T N E S S E T H:

WHEREAS, AMD Saxonia, a wholly-owned Subsidiary of AMD Holding, which is, in
turn, a wholly-owned Subsidiary of AMD Inc., has been formed for the purpose of
constructing, owning, and operating (i) the Plant and (ii) the integrated Design
Center;

WHEREAS, in order to finance the construction of the Plant and the Design
Center, and start-up costs of the operation of the Plant, inter alia, (i) AMD
Saxonia has entered into a Syndicated Loan Agreement, dated 11 March 1997, as
amended, (the "Loan Agreement") with the Agent, the Security Agent and the Banks
from time to time party thereto providing, inter alia, for a senior secured term
facility aggregating up to DM 1,500,000,000 (one billion five hundred million
Deutsche Marks), and (ii) the Sponsors, the Agent and the Security Agent have
entered into that certain Sponsors' Support Agreement dated 11 March 1997, as
amended, (the "Sponsors' Support Agreement") providing (x) certain assurances to
the Agent and Security Agent with respect to the completion of the Project, and
(y) certain undertakings to and for the benefit of the Secured Parties;

WHEREAS, AMD Saxonia, the Agent, the Security Agent and the Banks wish, with the
consent of the Sponsors to, among other things, amend the Loan Agreement, the
Sponsors' Support Agreement and the Sponsors' Subordination Agreement;

WHEREAS, the Sponsors are willing to provide certain additional undertakings to
and for the benefit of the Secured Parties as provided in this Amendment and to
amend and supplement the Sponsors' Subordination Agreement on the terms and
subject to the conditions of this Amendment;





NOW, THEREFORE, the Sponsors, the Agent (for itself and on behalf of the Banks),
and the Security Agent (on behalf of the Secured Parties), agree as follows:

                                    ARTICLE I
                                   Definitions

SECTION 1.1 Definitions. Capitalized terms not otherwise defined in this
Amendment are used with the definitions assigned to them in the Sponsors'
Support Agreement.

SECTION 1.2 Construction. In this Amendment, unless the context requires
otherwise, references to Sections and Schedules are to Sections and Schedules of
the Sponsors' Support Agreement. Section headings are inserted for reference
only and shall be ignored in construing this Amendment.

                                   ARTICLE II
                                   Amendments

SECTION 2.1 Amendments. The Sponsors' Subordination Agreement shall be amended
and restated in the form set out in Schedule 1 to this Amendment Agreement.

                                   ARTICLE III
                                  Miscellaneous

SECTION 3.1 Representations and Warranties. Each of the Sponsors hereby
represents and warrants that:

(a)  Organization; Corporate Power. It is duly incorporated and validly existing
     under the laws of the jurisdiction of its organization, and has all
     necessary power and authority to execute and deliver this Amendment and to
     consummate the transactions contemplated by the Sponsors' Subordination
     Agreement, as amended hereby;

(b)  Corporate Authority; No Conflict. The execution and delivery by it of this
     Amendment, and the performance by it of its obligations under the Sponsors'
     Subordination Agreement, as amended by this Amendment, have been duly
     authorized by all necessary corporate action (including any necessary
     shareholder action) on its part, and do not and will not (i) violate any
     provision of any law, rule, regulation, order, writ, judgment, injunction,
     decree, determination or award presently in effect having applicability to
     it, or of its charter or by-laws or (ii) result in a breach of, result in a
     mandatory prepayment or acceleration of indebtedness evidenced by or
     secured by, or constitute a default under, any indenture or loan or credit
     agreement, or any other agreement or instrument to which it is a party or
     by which it or its properties may be bound, or require the creation or
     imposition of any encumbrance of any nature upon or with respect to any of
     the properties now owned or hereafter acquired by it; and

(c)  Valid and Binding Obligations. The Sponsors' Subordination Agreement, as
     amended by this Amendment, constitutes its legal, valid and binding
     obligation,

                                       2




     enforceable against it in accordance with its terms subject, however, to
     applicable bankruptcy, insolvency, reorganization, moratorium or similar
     laws affecting creditors' rights generally and, as to enforceability, by
     general equitable principles.

SECTION 3.2 Repetition of Representation and Warranties. The representations and
warranties contained in Sections 12.1 and 12.2 of the Sponsors' Support
Agreement shall be repeated on the date hereof except to the extent any such
representation and warranty expressly relates solely to an earlier date.

SECTION 3.3  Miscellaneous.

(a)  This Amendment is limited as specified and, except as expressly herein
     provided, shall not constitute a modification, amendment or waiver of any
     other provision of any other Operative Document. Except as specifically
     amended by this Amendment, the Sponsors' Subordination Agreement shall
     remain in full force and effect and is hereby ratified and confirmed.

(b)  This Amendment shall be an Operative Document under and for purposes of the
     Sponsors' Support Agreement.

(c)  The form and execution of this Amendment and all rights and obligations of
     the parties arising hereunder shall be governed by the laws of the Federal
     Republic of Germany.

(d)  This Amendment has been executed in the English language.

(e)  This Amendment may be executed in any number of counterparts and all of
     such counterparts taken together shall be deemed to constitute one and the
     same instrument.

                  [Remainder of page intentionally left blank]

                                       3




IN WITNESS WHEREOF, each of the parties set out below has caused this Amendment
to be duly executed and delivered by its respective officer or agent thereunto
duly authorised as of the date first above written.

ADVANCED MICRO DEVICES, INC.

By /s/ Robert J. Rivet
   -------------------

Its Senior Vice President and Chief Financial Officer


AMD SAXONY HOLDING GMBH

By /s/ Thomas M. McCoy
   -------------------

Its Managing Director


AMD SAXONY MANUFACTURING GMBH

By /s/ James Doran
   ---------------

Its Managing Director


DRESDNER BANK LUXEMBOURG S.A., as
Agent

/s/ Marcus Nelgen /s/ Robert von Finckenstein
- ---------------------------------------------

DRESDNER BANK AG, as Security Agent


/s/ Marcus Nelgen /s/ Robert von Finckenstein
- ----------------------------------------------

                                       4




                                   Schedule 1

             Amended and restated Sponsors' Subordination Agreement



                                                            Amended and Restated

                        SPONSORS' SUBORDINATION AGREEMENT

THIS SPONSORS' SUBORDINATION AGREEMENT, dated 11 March 1997, as amended, is made
between ADVANCED MICRO DEVICES, INC., a corporation organised and existing under
the laws of the State of Delaware, United States of America, with its chief
executive office and principal place of business at One AMD Place, Sunnyvale,
California 94088, United States of America ("AMD Inc."), AMD SAXONY HOLDING
GMBH, Dresden, registered in the Commercial Register of the Dresden County Court
HRB 13931 ("AMD Holding"; and, together with AMD Inc., collectively, the
"Sponsors"), AMD SAXONY MANUFACTURING GMBH, Dresden, registered in the
Commercial Register of the Dresden County Court HRB 13186 ("AMD Saxonia"), and
DRESDNER BANK LUXEMBOURG S.A. ("Dresdner"), as Agent (in such capacity, the
"Agent") for the Banks under the Loan Agreement referred to below and DRESDNER
BANK AG, as Security Agent (in such capacity, the "Security Agent") for the
Secured Parties under such Loan Agreement.

                              W I T N E S S E T H :

WHEREAS, AMD Saxonia, a wholly-owned Subsidiary (such and other capitalised
terms being used herein with the meanings provided in Section 1.1), of AMD
Holding, which is, in turn, a wholly-owned Subsidiary of AMD Inc., has been
formed for the purpose of constructing, owning, and operating (i) the Plant and
(ii) the integrated Design Center (the construction, ownership, and operation of
the Plant and the Design Center being hereinafter called the "Project");

WHEREAS, in order to finance the construction of the Plant and the Design
Center, and start-up costs of the operation of the Plant, (i) the Sponsors
expect to make substantial subordinated loans to, and AMD Holding expects to
make substantial equity investments in, AMD Saxonia, and (ii) AMD Saxonia has
entered into a Syndicated Loan Agreement, dated 11 March 1997, as amended, (the
"Loan Agreement"), with the banks from time to time party thereto (hereinafter
collectively called the "Banks" and individually called a "Bank"), Dresdner, as
Agent and Paying Agent (in such capacity, the "Paying Agent"), providing, inter
alia, for a senior secured term facility aggregating up to DM1,500,000,000 (one
billion five hundred million Deutsche Marks);

WHEREAS, the Sponsors desire that the Project be constructed and completed and
are entering into this Agreement with AMD Saxonia, the Agent, the Security Agent
for the benefit of the Banks and the Paying Agent (the Agent, the Security
Agent, the Banks and the Paying Agent being hereinafter collectively called the
"Secured Parties" and individually called a "Secured Party"), for the purpose,
among other things, of providing (i) certain assurances with respect to the
completion of the Project, and (ii) certain undertakings to and for the benefit
of the Secured Parties; and

WHEREAS, a condition precedent to the initial Advance is, inter alia, the
execution by the Sponsors of this Agreement, and, in extending credit to AMD
Saxonia under the Loan Agreement, the Banks are relying on the undertakings of
the Sponsors contained herein;

NOW, THEREFORE, the Sponsors, AMD Saxonia, the Agent (for itself and on behalf
of and the Banks), and the Security Agent (on behalf of the Secured Parties),
agree as follows:

SECTION 1. Definitions.  Unless otherwise defined herein, terms used herein have
the meanings assigned to such terms in the Sponsors' Support Agreement. In
addition, the following terms (whether or not underlined) when used in this
Agreement, including its preamble and recitals, shall,



except where the context otherwise requires, have the following meanings (such
meanings to be equally applicable to the singular and plural forms thereof):

       "Agent" has the meaning assigned to such term in the introduction to this
       Agreement.

       "Agreement" means this Sponsors' Subordination Agreement, as the same may
       at any time be amended or modified in accordance with the terms hereof
       and in effect.

       "AMD Holding" has the meaning assigned to such term in the introduction
       to this Agreement.

       "AMD Holding Junior Liabilities" means all Junior Liabilities owing to
       AMD Holding.

       "AMD Inc." has the meaning assigned to such term in the introduction to
       this Agreement.

       "AMD Saxonia" has the meaning assigned to such term in the introduction
       to this Agreement.

       "Bank" and "Banks" have the respective meanings assigned to such terms in
       the second recital of this Agreement.

       "Dresdner" has the meaning assigned to such term in the introduction to
       this Agreement.

       "Junior Liabilities" means all obligations and liabilities of AMD Saxonia
       to either of the Sponsors (including, in the case of AMD Holding, any AMD
       Holding Junior Liabilities), howsoever created, arising, or evidenced,
       whether direct or indirect, absolute or contingent, or now or hereafter
       existing, or due or to become due.

       "Loan Agreement" has the meaning assigned to such term in the second
       recital of this Agreement.

       "Loan Agreement Termination Date" means the first date on or as of which
       (i) all Primary Secured Obligations have been paid in full, and (ii) the
       Banks have no commitments under or in connection with the Loan Agreement.

       "Paying Agent" has the meaning assigned to such term in the second
       recital of this Agreement.

       "Project" has the meaning assigned to such term in the first recital of
       this Agreement.

       "Secured Parties" and "Secured Party" have the respective meanings
       assigned to such terms in the third recital of this Agreement.

       "Security Agent" has the meaning assigned to such term in the
       introduction to this Agreement.

       "Senior Liabilities" means all obligations and liabilities of AMD Saxonia
       to the Agent, the Security Agent, any Bank, the Paying Agent, or either
       Guarantor (other than any arising solely by reason of any pledge or
       assignment of any AMD Holding Junior Liabilities made to the Security
       Agent pursuant to Section 2(b) hereof) under or arising out of any
       Financing Document, howsoever created, arising, or evidenced, whether
       direct or indirect, absolute or contingent, or now or hereafter existing,
       or due or to become due, it being expressly understood and agreed that
       the term "Senior Liabilities" shall include, without limitation, any and
       all interest accruing on any of the Senior Liabilities after the
       commencement of any proceedings referred to in Section 4, notwithstanding
       any provision or rule of law which might restrict the rights of the
       Security Agent, as against AMD Saxonia or any other Person, to collect
       such interest.

                                        2



       "Sponsors" has the meaning assigned to such term in the introduction to
       this Agreement.

       "Sponsors' Support Agreement" means the Sponsors' Support Agreement, of
       even date herewith, between the Sponsors, the Agent, and the Security
       Agent, as the same may at any time be amended or modified in accordance
       with the terms thereof and in effect.

In this Agreement, unless the context requires otherwise, (i) any reference to
an Operative Document shall be to such Operative Document as the same may have
been or from time to time may be amended, varied, re-issued, replaced, novated
or supplemented, in each case in accordance with the terms thereof and hereof,
and in effect; (ii) any statutory provisions shall be construed as references to
those provisions as amended, modified, re-enacted, or replaced from time to
time; (iii) words importing a gender include every gender; and (iv) references
to Sections are to Sections of this Agreement. Section headings are inserted for
reference only and shall be ignored in construing this Agreement. A time of day,
unless otherwise specified, shall be construed as a reference to Frankfurt am
Main time.

SECTION 2. Obligations of Sponsors. The Sponsors will, from time to time, (a)
promptly notify the Security Agent of the creation of any Junior Liabilities
pursuant to the Sponsors' Support Agreement, the Sponsors' Loan Agreement or the
Revolving Loan Facility Agreement, and (b) in the case of AMD Holding, and as
collateral security for all Senior Liabilities, indorse without recourse,
deliver, and pledge to the Security Agent any and all promissory notes or other
instruments evidencing any of the AMD Holding Junior Liabilities, in a manner
satisfactory to the Security Agent.

SECTION 3. Subordination. Except as expressly provided in this Agreement, or as
the Agent (acting on the instructions of an Instructing Group) may hereafter
otherwise expressly consent in writing, the payment of all Junior Liabilities
shall be postponed and subordinated to the payment in full of all Senior
Liabilities, and no payments or other distributions whatsoever in respect of any
Junior Liabilities shall be made, nor shall any property or assets of AMD
Saxonia be applied to the purchase or other acquisition or retirement of any
Junior Liabilities; provided, however, that as long as no Event of Default, nor
any Unmatured Event of Default nor, with respect to AMD Saxonia or either
Sponsor any event which is of the type described in Section 11.1 (e), (f), (g)
or (h) of the AMD Inc. 1999 Loan and Security Agreement has occurred and is
continuing, there are excepted from the foregoing provisions of this Section 3
(without duplication):

       (i)    those payments to either of the Sponsors made by AMD Saxonia
              pursuant to Article II of the Management Service Agreement;

       (ii)   those payments to AMD Holding made by AMD Saxonia pursuant to
              Article IV of the AMD Saxonia Wafer Purchase Agreement;

       (iii)  those payments to AMD Inc. made by AMD Saxonia in respect of
              purchases of equipment in the ordinary course of business and on
              an arm's length basis and not exceeding DM50,000,000 (fifty
              million Deutsche Marks) in aggregate;

       (iv)   those payments to the Sponsors made by AMD Saxonia in accordance
              with Section 6.3 of the Sponsors' Support Agreement;

       (v)    distributions in respect of the Junior Liabilities to the extent
              such distributions constitute non cash credits expressly permitted
              to be made under the Management Service Agreement or the AMD
              Saxonia Wafer Purchase Agreement;

       (vi)   those payments to AMD Inc. made by AMD Saxonia pursuant to the AMD
              Saxonia Hedging Agreement other than payments of premium and other
              than payments in respect of the early termination thereof;

                                        3



       (vii)  with effect from 1 January 2002, payments of principal and
              interest under the Revolving Loan Facility Agreement; and

       (viii) the repayment of Sponsors' Loans in an amount equal to the amount
              of any increase in AMD Saxonia's equity capital paid in in cash
              between 30 November 2000 and 31 December 2000;

and provided, further, that there are excepted from the foregoing terms of this
Section 3:

       (A)    performance by AMD Saxonia of its obligations (other than payment
              obligations, if any) under the AMD Saxonia Wafer Purchase
              Agreement, the AMD Saxonia Research Agreement or the License
              Agreement; and

       (B)    for the avoidance of doubt, employee salary funds withheld by AMD
              Saxonia for employees to acquire stock of AMD Inc. in connection
              with an employee stock purchase plan.

Moreover, if the AMD Saxonia Wafer Purchase Agreement or the Management Service
Agreement terminates for any reason whatsoever, AMD Saxonia shall be permitted
to credit the amounts payable thereunder against the amounts receivable by it
thereunder strictly in accordance with the terms and provisions of each such
Operative Document.

In addition to, and without intending to derogate from, the foregoing provisions
of this Section 3, each of the Sponsors hereby subordinates its claims arising
under or in connection with the Sponsors' Support Agreement, Sponsors' Loan
Agreement and the Revolving Loan Facility Agreement to all other present and
future creditors of AMD Saxonia, but the subordination under this sentence shall
not apply to any such claims as long as and to the extent that omitting such
claims from the subordination under this sentence will not result in or lead to
an increase of an overindebtedness of AMD Saxonia within the meaning of Sec. 63
Act on Limited Liability Companies (GmbHG), to be determined on the basis of AMD
Saxonia's statement of affairs (Vermogensstatus) as per any relevant point in
time or, if applicable, in an opening or closing liquidation balance sheet
(Liquidationseroffnungs-, schlussbilanz). For the purposes of determining
whether a repayment of principal or the payment of interest by AMD Saxonia is
permitted under this paragraph the value of the assets and liabilities of AMD
Saxonia to be included in the relevant statement of affairs shall always be
determined by the managing directors and confirmed by the Auditor in accordance
with the applicable rules. The Sponsors shall not be entitled to make payment
claims under the Sponsors' Support Agreement, Sponsors' Loan Agreement or the
Revolving Loan Facility Agreement as long as there is an overindebtedness of AMD
Saxonia within the above meaning, or as long as there is not a liquidation
surplus, or in a bankruptcy proceeding over the assets of AMD Saxonia, it being
understood that the Sponsors' claims shall rank behind all other creditors in
case of any insolvency proceeding which is governed by the provisions of the
Insolvency Act (Insolvenzordnung).

SECTION 4. Bankruptcy, Insolvency, etc. In the event of any dissolution, winding
up, liquidation, reorganization, or other similar proceedings relating to AMD
Saxonia or to its creditors, as such, or to its property (whether voluntary or
involuntary, partial or complete, and whether in bankruptcy, insolvency,
compromise proceedings (Vergleichsverfahren) or any other marshalling of the
assets and liabilities of AMD Saxonia, or any sale of all or substantially all
of the assets of AMD Saxonia, or otherwise), the Senior Liabilities shall first
be paid in full before either of the Sponsors shall be entitled to receive and
to retain any payment or distribution in respect of the Junior Liabilities, and
in order to implement the foregoing, (a) each of the Sponsors hereby irrevocably
agrees that in such event all payments and distributions of any kind or
character in respect of the Junior Liabilities to which such Sponsor would be
entitled if the Junior Liabilities were not subordinated, or, in the case of the
AMD Holding Junior Liabilities, subordinated and pledged or assigned, pursuant
to this Agreement, shall be made directly to the Security Agent; (b) upon the
commencement and during the continuance of any proceedings referred to in this
Section 4, the Security Agent shall have the right to

                                        4



require either or both of the Sponsors to claim, enforce, prove, or vote in
respect of the Junior Liabilities in such manner as is directed by the Security
Agent and as is permitted by applicable law, including, without limitation, to
direct that all payments and distributions of any kind or character in respect
of the Junior Liabilities to which such Sponsor would be entitled if the Junior
Liabilities were not subordinated (or, in the case of the AMD Holding Junior
Liabilities, subordinated and (if applicable) pledged) pursuant to this
Agreement, shall be made directly to the Security Agent; provided, that if the
Security Agent shall not have required a Sponsor to claim, enforce, prove, or
vote in respect of any of the Junior Liabilities on or before the day which is
10 Business Days before a date on which the failure to so claim, enforce, prove,
or vote would invalidate or otherwise materially adversely affect the rights of
such Sponsor, such Sponsor shall have the right to claim, enforce, prove, or
vote in respect of such Junior Liabilities in such Sponsor's sole discretion;
and (c) each Sponsor hereby irrevocably agrees that the Security Agent may, at
its sole discretion for purposes hereof, in the name of such Sponsor or
otherwise, demand, sue for, collect, receive, and receipt for any and all such
payments or distributions, and file, prove, and vote, or consent in any such
proceedings with respect to, any and all claims of such Sponsor relating to the
Junior Liabilities.

SECTION 5. Payments Held in Trust. In the event that either of the Sponsors
receives any payment or other distribution of any kind or character from AMD
Saxonia or from any other source whatsoever in respect of any of the Junior
Liabilities, other than as expressly permitted by the terms of this Agreement,
such payment or other distribution shall be received in trust for the Security
Agent, and promptly turned over by such Sponsor to the Security Agent. Each of
the Sponsors will mark its books and records, and cause AMD Saxonia to mark its
books and records, as to clearly indicate that the Junior Liabilities are
subordinated in accordance with the terms of this Agreement, and will cause to
be clearly inserted in any instrument which at any time evidences any of the
Junior Liabilities a statement to the effect that the payment thereof is
subordinated in accordance with the terms of this Agreement. Each of the
Sponsors will execute such further documents or instruments and take such
further action as the Security Agent may reasonably request from time to time to
carry out the intent of this Agreement.

SECTION 6. Application of Payments; No Subrogation. All payments and
distributions received by the Security Agent in respect of the Junior
Liabilities in accordance with the terms hereof, to the extent received in or
converted into cash, may be applied by the Security Agent first to the payment
of any and all expenses (including reasonable attorneys' fees and legal
expenses) paid or incurred by the Security Agent in enforcing this Agreement or
in endeavouring to collect or realize upon any of the Junior Liabilities or any
security therefor in accordance with the terms hereof, and any balance thereof
shall, solely as between the Sponsors and the Security Agent, be applied by the
Security Agent, in the manner provided by the Loan Agreement, toward the payment
of the Senior Liabilities remaining unpaid; but, as between AMD Saxonia and its
creditors, no such payments or distributions of any kind or character shall be
deemed to be payments or distributions in respect of the Senior Liabilities;
and, notwithstanding any such payments or distributions received by the Security
Agent in respect of the Junior Liabilities and so applied by the Security Agent
toward the payment of the Senior Liabilities, each of the Sponsors shall be
subrogated to the then-existing rights of the Agent, the Security Agent, and the
Banks, if any, in respect of the Senior Liabilities only at such time as (i) the
Agent, the Security Agent, and the Banks shall have received payment of the full
amount of the Senior Liabilities, as provided for in Section 9, or (ii) this
Agreement shall terminate pursuant to Section 15. Each Secured Party shall, at
the relevant Sponsor's request and expense made after such time, execute and
deliver to such Sponsor appropriate documents (without recourse or warranty
whatsoever) to evidence the transfer by subrogation to such Sponsor of an
interest in the Senior Liabilities resulting from the application of payments in
the manner contemplated by this Section 6. The obligations of the Secured
Parties under the preceding sentence shall survive any termination of this
Agreement.

SECTION 7. Waivers by the Sponsors. Each of the Sponsors hereby waives: (a)
notice of acceptance by the Agent, the Security Agent, or any Bank of this
Agreement; (b) notice of the existence or creation or non-payment of all or any
of the Senior Liabilities; and (c) all diligence in collection or protection of
or realization upon the Senior Liabilities or any thereof or any security
therefor.

                                        5



SECTION 8.  Obligations of the Sponsors. Neither of the Sponsors will, without
the prior written consent of the Security Agent: (a) transfer or assign, or
attempt to enforce or collect, any Junior Liabilities or any rights in respect
thereof, except (i) that AMD Inc. may assign any Senior Liability to AMD
Holding, and (ii) that AMD Inc. may enforce or collect any Junior Liabilities
that are expressly permitted to be paid pursuant to Section 3; provided, that
nothing in this Agreement shall be deemed to prevent AMD Inc. from seeking
damages, equitable relief or otherwise enforcing any rights it may have against
AMD Saxonia arising out of (x) any tort or infringement of AMD Inc. tangible or
intangible property rights (including without limitation rights under applicable
patent, copyright and trade secret laws and similar principles) to the extent
such tort or infringement arises after the date of termination of the AMD
Holding Wafer Purchase Agreement or (y) a breach by AMD Saxonia of its
obligations under the License Agreement to the extent, but only to the extent,
such tort or infringement arises after the date of termination of the AMD
Holding Wafer Purchase Agreement; (b) take any collateral security for any
Junior Liabilities; (c) convert any Junior Liabilities into equity capital of
AMD Saxonia (it being understood and agreed that (i) the Sponsors' Loans made by
AMD Holding (but not AMD Inc.) may be converted into equity of AMD Saxonia and
(ii) for the avoidance of doubt, a repayment permitted under Section 3 (ix)
shall not be considered a conversion hereunder); or (d) commence, or join with
any other creditor commencing, any bankruptcy, reorganisation, or insolvency
proceedings with respect to AMD Saxonia.

SECTION 9.  Continuing Subordination. This Agreement shall in all respects be a
continuing agreement and shall remain in full force and effect (notwithstanding,
without limitation, the dissolution of either of the Sponsors or that at any
time or from time to time all Senior Liabilities may have been paid in full),
but shall automatically terminate on the Loan Agreement Termination Date.

SECTION 10. Rights of the Agent, the Security Agent, and the Banks. The Agent,
the Security Agent, and each Bank may, from time to time, at its sole discretion
and without notice to either of the Sponsors, take any or all of the following
actions without affecting its or their rights under this Agreement: (a) retain
or obtain a security interest in any property of any Person to secure any of the
Senior Liabilities; (b) retain or obtain the primary or secondary obligations of
any other obligor or obligors with respect to any of the Senior Liabilities; (c)
extend or renew for one or more periods (whether or not longer than the original
period), alter or exchange any of the Senior Liabilities, or release or
compromise any obligation of any nature of any obligor with respect to any of
the Senior Liabilities; (d) compromise, settle, release, renew, extend, indulge,
amend, change, waive, modify, or supplement in any respect any of the terms or
conditions of any of the Operative Documents; and (e) release its lien on or
security interest in, or surrender, release, or permit any substitution or
exchange for, all or any part of any property securing any of the Senior
Liabilities, or extend or renew for one or more periods (whether or not longer
than the original period) or release, compromise, alter, or exchange any
obligations of any nature of any obligor with respect to any such property.

SECTION 11. Transfer of Obligations; Enforcement. The Security Agent, the Agent,
or any Bank may, from time to time, without notice to either of the Sponsors,
but subject, however, to the provisions of Section 26 of the Loan Agreement,
assign or transfer any or all of the Senior Liabilities or any interest therein;
and, notwithstanding any such assignment or transfer or any subsequent
assignment or transfer thereof, such Senior Liabilities shall be and remain
Senior Liabilities for purposes of this Agreement, and every immediate and
successive assignee or transferee of any of the Senior Liabilities or of any
interest therein, shall, to the extent of the interest of any such assignee or
transferee in the Senior Liabilities, be entitled to the benefits of this
Agreement to the same extent as if such assignee or transferee were the
transferor. The rights of the Secured Parties hereunder shall be exercisable
solely by the Security Agent on behalf of the Secured Parties, unless either the
Security Agent is not able pursuant to applicable law to realize the practical
benefits of such rights on behalf of the Secured Parties or the limitations set
forth in this sentence would otherwise materially adversely affect the rights of
the Secured Parties hereunder.

                                        6



SECTION 12. Additional Provisions. None of the Agent, the Security Agent, or the
Banks shall be prejudiced in its rights under this Agreement by any act or
failure to act of any of AMD Saxonia or either of the Sponsors, or any
noncompliance of AMD Saxonia or either of the Sponsors with any agreement or
obligation, regardless of any knowledge thereof which the Agent, the Security
Agent, or such Bank may have or with which the Agent, the Security Agent, or
such Bank may be charged; and no action of the Agent, the Security Agent, or any
Bank permitted hereunder shall in any way affect or impair the rights of the
Agent, the Security Agent, or any Bank, and the obligations of each of the
Sponsors, under this Agreement. For the purposes of this subordination, Senior
Liabilities shall include all obligations of AMD Saxonia under or in connection
with any of the Operative Documents to the Agent, the Security Agent, the Paying
Agent and each Bank, notwithstanding any right or power of any AMD Saxonia or
anyone else to assert any claim or defence as to the invalidity or
unenforceability of any such obligation, and no such claim or defence shall
affect or impair the agreements and obligations of the Sponsors hereunder;
provided, however, that Senior Liabilities shall not include any obligations or
liabilities of AMD Saxonia which a court of competent jurisdiction shall have
determined (which determination shall be final and unappealable) are invalid or
unenforceable.

SECTION 13. Cumulative Remedies; Modifications in Writing. The remedies provided
for herein are cumulative and are not exclusive of any remedies that may be
available to the Agent or the Security Agent at law, in equity, or otherwise. No
amendment, modification, supplement, termination, or waiver of or to any
provision of this Agreement, or consent to any departure by either of the
Sponsors or AMD Saxonia therefrom, shall be effective unless the same shall be
in writing and signed by or on behalf of the Agent and the Security Agent.

SECTION 14. Severability of Provisions. In case any provision of this Agreement
is invalid or unenforceable, the validity or enforceability of the remaining
provisions hereof shall remain unaffected. The parties hereto shall have an
obligation to replace any invalid provision by a valid provision which
approximates best the economic purpose of the invalid provision.

SECTION 15. Termination. This Agreement and the obligations of the parties
hereunder shall terminate on the Loan Agreement Termination Date; provided, that
such obligations shall automatically revive and be reinstated if and to the
extent that AMD Saxonia shall subsequently have obligations to any of the
Secured Parties under or arising out of any of the Financing Documents.

SECTION 16. Assignment. This Agreement shall be binding upon and shall inure to
the benefit of each party hereto and their respective successors and assigns;
provided, however, that the Security Agent, the Agent, and the Banks may
transfer their rights under this Agreement, subject, however, to the provisions
of Section 26 of the Loan Agreement; provided, further, that neither of the
Sponsors nor AMD Saxonia shall have the right to transfer or assign its rights
under this Agreement without the prior written consent of the Agent and the
Security Agent; and provided, further, that AMD Saxonia may assign this
Agreement to the Security Agent as security for the obligations of AMD Saxonia
under the Loan Agreement and the other Operative Documents. Notwithstanding any
such assignment or transfer or any subsequent assignment or transfer thereof,
Senior Liabilities shall be and remain Senior Liabilities for the purposes of
this Agreement, and every immediate and successive assignee or transferee of any
of the Senior Liabilities or of any interest therein shall, to the extent of the
interest of such assignee or transferee in the Senior Liabilities, be entitled
to the benefits of this Agreement to the same extent as if such assignee or
transferee were the transferor, subject, however, to the provisions of Section
11; provided, however, that, in addition to its rights under Section 11, unless
the Security Agent (acting on the instructions of an Instructing Group) shall
otherwise consent in writing, the Security Agent shall have an unimpaired right,
prior and superior to that of any such assignee or transferee, to enforce this
Agreement for the benefit of the Secured Parties as to those of the Senior
Liabilities which have not been so assigned or transferred.

SECTION 17. Notice. All notices, demands, instructions, and other communications
required or permitted to be given to or made upon any party hereto shall be in
writing and shall be personally delivered or sent by registered or certified
mail, postage pre-paid, return receipt requested, or by pre-

                                        7



paid telex, TWX, or telegram, or by pre-paid courier service, or by telecopier,
and shall be deemed to be given for purposes of this Agreement on the day that
such writing is delivered or sent to the intended recipient thereof in
accordance with the provisions of this Section 17. Unless otherwise specified in
a notice sent or delivered in accordance with the foregoing provisions of this
Section 17, notices, demands, instructions, and other communications in writing
shall be given to or made upon the respective parties hereto at their respective
addresses (or to their respective telex, TWX or telecopier numbers) indicated
below.

To the Security Agent:

Dresdner Bank AG, as Security Agent
Ostra Allee 9
01067 Dresden
Attention: Betreuung Unternehmenskunden
Facsimile No.: (49) 351 489-1300

To the Agent:

Dresdner Bank Luxembourg S.A., as Agent
26, rue du Marche-aux-Herbes
L-2097 Luxembourg
Attention: Direktion
Facsimile No.: (352) 4760-824

To AMD Inc.:

Advanced Micro Devices, Inc.
One AMD Place
Sunnyvale, California  94088
Attention: General Counsel
Facsimile No.: (1) (408)774 7399

To AMD Holding:

AMD Saxony Holding GmbH
Wilschdorfer Landstrasse 101
01109 Dresden
Attention: Geschaftsfuhrer
Facsimile No.: (49) 351 277 91300

To AMD Saxonia:

AMD Saxony Manufacturing GmbH
Wilschdorfer Landstrasse 101
01109 Dresden
Attention: Geschaftsfuhrer
Facsimile No.: (49) 351 277 91300

                                        8



SECTION 18. Relationship to Other Agreements. The rights of the Agent and the
Security Agent pursuant to this Agreement are in addition to any other rights or
remedies which the Agent and the Security Agent may have under statutory law or
other agreements between one or more of the Agent, the Security Agent, the
Banks, the Sponsors, and AMD Saxonia. Where such rights and remedies are in
conflict with the provision of this Agreement, the provision of this Agreement
shall prevail.

SECTION 19. Governing Law. This Agreement and all rights and obligations of the
parties arising hereunder or in connection herewith shall be governed by the
Laws of the Federal Republic of Germany.

SECTION 20. Jurisdiction. Each of the Sponsors and AMD Saxonia hereby submits to
the exclusive jurisdiction of the courts in Frankfurt am Main for any dispute
arising out of or in connection with this Agreement. AMD Inc. states that
Advanced Micro Devices GmbH, whose address is Rosenheimerstrasse 143b, 81671
Munich, Germany, Attention: Legal Department, Tel: +49 89 450 530, Fax: +49 89
406 490, Telex: 841523883, is its accredited agent for service of process and
hereby undertakes to maintain an agent for service in Germany. The foregoing
submission to jurisdiction shall not (and shall not be construed so as to) limit
the rights of the Agent or the Security Agent to take suits, actions, or
proceedings against a Sponsor to enforce any judgment rendered by the courts in
Frankfurt am Main in any other court or entity of competent jurisdiction where
such Sponsor has assets, nor shall the taking of suits, actions, or proceedings
to enforce any such judgment in one or more jurisdictions preclude the taking of
enforcement proceedings in any other jurisdiction, whether concurrently or not.

SECTION 21. Use of English Language. This Agreement has been executed in the
English language. All certificates, reports, notices, and other documents and
communications given or delivered pursuant to this Agreement shall be in the
English language and, if reasonably requested by the Agent, shall be accompanied
by a certified German translation promptly thereafter. In the event of any
inconsistency, the English language version of any such document shall control.

SECTION 22. Operative Document. This Agreement is an Operative Document executed
pursuant to the Loan Agreement.

IN WITNESS WHEREOF, each of the parties set out below has caused this Agreement
to be duly executed and delivered by its respective officer or agent thereunto
duly authorised as of the date first above written.

                                ADVANCED MICRO DEVICES, INC.


                                By___________________________________________

                                Its__________________________________________

                                AMD SAXONY HOLDING GMBH

                                _____________________________________________

                                AMD SAXONY MANUFACTURING GMBH

                                _____________________________________________

                                DRESDNER BANK AG, as Agent and Security Agent

                                _____________________________________________


                                        9

EX-10.43(H-2)

                                                              Exhibit 10.43(h-2)

                   ACCESSION AGREEMENT AND SECOND AMENDMENT TO
                        SPONSORS' SUBORDINATION AGREEMENT

           THIS ACCESSION AGREEMENT AND SECOND AMENDMENT (this "Amendment"),
dated 3 June 2002, is made among ADVANCED MICRO DEVICES, INC., a corporation
organised and existing under the laws of the State of Delaware, United States of
America, with its chief executive office and principal place of business at One
AMD Place, Sunnyvale, California 94088, United States of America ("AMD Inc.");
AMD SAXONY HOLDING GMBH, Dresden, registered in the Commercial Register of the
Dresden County Court, HRB 13931 ("AMD Holding," together with AMD Inc.,
collectively, the "Sponsors"); AMD SAXONY LLC, a limited liability company
organised and existing under the laws of the State of Delaware, United States of
America ("AMD Saxony LLC"); AMD SAXONY ADMIN GMBH, with its seat in Dresden
("AMD Admin," together with AMD Saxony LLC, collectively, the "Additional
Partner Companies"); AMD SAXONY MANUFACTURING GMBH, registered in the Commercial
Register of the Dresden County Court, HRB 13186 (proposed to be known as "AMD
Saxony LLC & Co. KG" following the Conversion Effective Date) ("AMD Saxonia");
DRESDNER BANK LUXEMBOURG S.A., as Agent (and successor to DRESDNER BANK AG
("Dresdner") in such capacity) under the Loan Agreement dated 11 March 1997, as
amended (as so amended, the "Loan Agreement") (in such capacity, the "Agent")
for the Banks from time to time party thereto; and Dresdner, as Security Agent
under such Loan Agreement (in such capacity, the "Security Agent") for the
Secured Parties referred to therein.

                              W I T N E S S E T H:

           WHEREAS, AMD Saxonia has been formed for the purpose of constructing,
owning, and operating (i) the Plant and (ii) the integrated Design Center (the
construction, ownership, and operation of the Plant and the Design Center being
hereinafter called the "Project");

           WHEREAS, pursuant to the Conversion Documents, AMD Saxonia proposes
to change its legal form to a Kommanditgesellschaft (a limited partnership
organised under the laws of the Federal Republic of Germany) with AMD Holding
and AMD Admin as its sole limited partners (Kommanditisten) and AMD Saxony LLC
as its sole general partner (Komplementar);

           WHEREAS, with effect from the Conversion Effective Date, AMD Saxonia
wishes, with the consent of the Sponsors and the Additional Partner Companies
to, among other things, modify the interest rate on Sponsors' Loans and
Revolving Loans and to increase the amount of the Revolving Loan Facility; and



           WHEREAS, with effect from the Conversion Effective Date, the
Additional Partner Companies desire to accede to, and the Sponsors, the
Additional Partner Companies, AMD Saxonia, the Agent and the Security Agent
desire to amend and supplement, the Sponsors' Subordination Agreement dated 11
March 1997, by and among AMD Inc., AMD Holding, AMD Saxony Manufacturing GmbH,
Dresdner Bank AG, as Security Agent, and Dresdner Bank Luxembourg S.A., as
Agent, as amended by the First Amendment to Sponsors' Subordination Agreement
dated 20 February 2001(as amended, the "Sponsors' Subordination Agreement"), on
the terms and subject to the conditions of this Amendment;

           NOW, THEREFORE, the Sponsors, the Additional Partner Companies, AMD
Saxonia, the Agent (for itself and on behalf of the Banks), and the Security
Agent (on behalf of the Secured Parties), agree as follows:

                                    ARTICLE I
                                    Accession

Section 1.1 With effect from the Conversion Effective Date, the Additional
Partner Companies hereby accede to the Sponsors' Subordination Agreement, and
the Sponsors, AMD Saxonia, the Agent and Security Agent hereby consent to such
accession

                                   ARTICLE II
                                   Definitions

Section 2.1 Definitions. Capitalized terms not otherwise defined in this
Amendment are used with the definitions assigned to them in the Sponsors'
Subordination Agreement or the Sponsors' Support Agreement, as the case may be.

           In addition, the following terms when used in this Amendment shall
have the following meaning:

           "Agreed Terms" means, in respect of any document, that document
substantially in the form thereof which has been initialled (for the purposes of
identification) by or on behalf of AMD Saxonia and the Agent.

           "Conversion Documents" means the following agreements and documents,
each in the Agreed Terms: (i) the Certificate of Formation of AMD Saxony LLC;
(ii) the AMD Admin Articles of Association; (iii) the Formation Protocol for AMD
Admin; (iv) the Application to the Commercial Register for Formation of AMD
Admin; (v) the Resolution of AMD Holding as Shareholder of AMD Admin for Section
181 German Civil Code Release; (vi) the List of Shareholders for AMD Admin;
(vii) the AMD Saxony LLC Agreement; (viii) the AMD Saxonia Partnership
Agreement; (ix) the Assignment and Trust Agreement between AMD Holding and AMD
Saxony LLC; (x) the Purchase and Assignment Agreement between AMD Holding and
AMD Admin; (xi) the Resolution of AMD Holding as Shareholder of AMD Saxonia for
Transfer of Fractional Share to AMD Saxony LLC; (xii) the Notification to AMD
Saxonia of Assignment of Fractional Share to AMD Admin; (xiii) the List of
Shareholders of AMD Saxonia (reflecting addition of AMD Admin); (xiv) the
Resolution of AMD Holding and AMD Saxony LLC as Shareholders of AMD Saxonia for
Transfer of Fractional Share to AMD Admin; (xv) the Notification to AMD Saxonia
of Assignment of Fractional Share to AMD

                                       2



Saxony LLC; (xvi) the List of Shareholders of AMD Saxonia (reflecting addition
of AMD Saxony LLC); (xvii) the Resolution of AMD Holding, AMD Admin and AMD
Saxony LLC as Shareholders of AMD Saxonia Approving Conversion to Limited
Partnership; (xviii) the Resolution of AMD Inc. as Shareholder of AMD Holding
Approving Conversion of AMD Saxonia; (xix) Application to the Commercial
Register for Conversion of AMD Saxonia to Limited Partnership; (xx) Application
to the Real Estate Register for Change in AMD Saxonia's Name; (xxi) the Transfer
Agreement for Transfer Back Of Fractional Share between AMD Holding and AMD
Saxony LLC; (xxii) Application to the Commercial Register for Transfer Back of
Fractional Share by AMD Saxony LLC to AMD Holding; (xxiii) Power of Attorney
regarding Removal of AMD Saxony LLC as General Partner of AMD Saxonia; and
(xxiv) any other agreement or document designated by the AMD Companies (with the
consent of the Agent) in addition to or in substitution for any of the
above-named documents or agreements as a "Conversion Document."

           "Sponsors' Support Agreement" means the Sponsors' Support Agreement
between the Sponsors, the Additional Partner Companies, the Agent and the
Security Agent dated 11 March 1997, as amended by the First Amendment to
Sponsors' Support Agreement dated 6 February 1998, the Second Amendment to
Sponsors' Support Agreement dated 29 June 1999, the Third Amendment to Sponsors'
Support Agreement dated 20 February 2001 and the Accession Agreement and Fourth
Amendment to Sponsors' Support Agreement dated of even date herewith, and as the
same may at any time be amended or modified in accordance with the terms thereof
and in effect.

Section 2.2 Construction. In this Amendment, unless the context requires
otherwise, references to Sections and Schedules are to Sections and Schedules of
the Sponsors' Subordination Agreement. Section headings are inserted for
reference only and shall be ignored in construing this Amendment.

                                  ARTICLE III
                                   Amendments

Section 3.1 With effect from the Conversion Effective Date, the Sponsors'
Subordination Agreement will be amended and restated in its entirety in the form
attached as Appendix A.

                                   ARTICLE IV
                                  Miscellaneous

Section 4.1 Representations and Warranties. Each of the Sponsors, AMD Saxonia
and the Additional Partner Companies hereby represents and warrants, as of the
date hereof and as of the Conversion Effective Date, that:

(i)   Organisation; Corporate Power. It is duly organised and validly existing
under the laws of the jurisdiction of its organisation, and has all necessary
power and authority to execute and deliver this Amendment and, following the
Conversion Effective Date, to consummate the transactions contemplated by the
Sponsors' Subordination Agreement, as amended hereby;

(ii)  Corporate Authority; No Conflict. The execution and delivery by it of this
Amendment, and the performance by it, following the Conversion Effective Date,
of its obligations under the

                                       3



Sponsors' Subordination Agreement, as amended by this Amendment, have been duly
authorised by all necessary corporate action (including any necessary
shareholder action) on its part, and do not and will not (i) violate any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination, or award presently in effect having applicability to it,
or of its charter or by-laws; or (ii) result in a breach of, result in a
mandatory prepayment or acceleration of indebtedness evidenced by or secured by,
or constitute a default under, any indenture or loan or credit agreement, or any
other agreement or instrument to which it is a party or by which it or its
properties may be bound, or require the creation or imposition of any
encumbrance of any nature upon or with respect to any of the properties now
owned or hereafter acquired by it; and

(iii)  Valid and Binding Obligations. Following the Conversion Effective Date,
the Sponsors' Subordination Agreement, as amended by this Amendment, shall
constitute its legal, valid, and binding obligation, enforceable against it in
accordance with its terms; subject, however, to applicable bankruptcy,
insolvency, reorganisation, moratorium, or similar laws affecting creditors'
rights generally and, as to enforceability, by general equitable principles.

Section 4.2  Miscellaneous.

(i)    This Amendment is limited as specified and, except as expressly herein
provided, shall not constitute a modification, amendment or waiver of any other
provision of the Sponsors' Subordination Agreement or any provision of any other
Operative Document. Except as specifically amended by this Amendment, the
Sponsors' Subordination Agreement shall remain in full force and effect and is
hereby ratified and confirmed.

(ii)   This Amendment shall be an Operative Document under and for purposes of
the Sponsors' Support Agreement.

(iii)  This Amendment has been executed in the English language.

(iv)   This Amendment may be executed in any number of counterparts and by
different parties on separate counterparts which when taken together shall
constitute one agreement.

(v)    Sections 19, 20, and 21 of the Sponsors' Subordination Agreement shall
apply, mutatis mutandis, to this Amendment, as if set out herein in full.

                [Remainder of the page intentionally left blank]

                                       4



                  IN WITNESS WHEREOF, each of the parties set out below has
caused this Amendment to be duly executed and delivered by its respective
officer or agent thereunto duly authorised as of the date first above written.

                                  ADVANCED MICRO DEVICES, INC.


                                  By: /s/ Robert J. Rivet
                                      ------------------------------------------
                                  Its Senior Vice President and Chief
                                      ------------------------------------------
                                      Financial Officer
                                      ------------------------------------------

                                  AMD SAXONY HOLDING GMBH

                                  By: /s/ Hans-Raimund Deppe
                                      ------------------------------------------
                                  Dr. Hans-Raimund Deppe
                                  Its Managing Director (Geschaftsfuhrer)

                                  AMD SAXONY MANUFACTURING GMBH

                                  By: /s/ Hans-Raimund Deppe
                                      ------------------------------------------
                                  Dr. Hans-Raimund Deppe
                                  Its Managing Director (Geschaftsfuhrer)

                                  AMD SAXONY LLC

                                  By: /s/ Hans-Raimund Deppe
                                      ------------------------------------------
                                  Dr. Hans-Raimund Deppe
                                  Its Manager

                                  AMD SAXONY ADMIN GMBH

                                  By: /s/ Hans-Raimund Deppe
                                      ------------------------------------------
                                  Dr. Hans-Raimund Deppe
                                  Its Managing Director (Geschaftsfuhrer)

                                  DRESDNER BANK LUXEMBOURG S.A.
                                  as Agent

                                  By: /s/ Prellwitz
                                      ------------------------------------------
                                  Its Signatory under power of attorney
                                      ------------------------------------------

                                       5



                                DRESDNER BANK AG
                                as Security Agent


                                By: /s/ Prellwitz
                                    ----------------------------------------
                                Its Signatory under power of attorney
                                    ----------------------------------------

                 [Signature page to the Accession Agreement and
             Second Amendment to Sponsors' Subordination Agreement]

                                       6



                                   APPENDIX A

                              AMENDED AND RESTATED
                        SPONSORS' SUBORDINATION AGREEMENT

                                      A-1



                                                            Amended and Restated

                        SPONSORS' SUBORDINATION AGREEMENT

THIS SPONSORS' SUBORDINATION AGREEMENT, dated 11 March 1997, as amended, is made
between ADVANCED MICRO DEVICES, INC., a corporation organised and existing under
the laws of the State of Delaware, United States of America, with its chief
executive office and principal place of business at One AMD Place, Sunnyvale,
California 94088, United States of America ("AMD Inc."); AMD SAXONY HOLDING
GMBH, Dresden, registered in the Commercial Register of the Dresden County Court
HRB 13931 ("AMD Holding"; and, together with AMD Inc., collectively, the
"Sponsors"); AMD SAXONY LLC, a limited liability company organised and existing
under the laws of the State of Delaware, United States of America ("AMD Saxony
LLC"); AMD SAXONY ADMIN GMBH, with its seat in Dresden ("AMD Admin" and together
with AMD Saxony LLC, collectively, the "Additional Partner Companies"); AMD
SAXONY MANUFACTURING GMBH, registered in the Commercial Register of the Dresden
County Court, (proposed to be known as "AMD Saxony LLC & Co KG" Dresden
following the Conversion Effective Date) ("AMD Saxonia"); DRESDNER BANK
LUXEMBOURG S.A., as Agent (and successor to DRESDNER BANK AG ("Dresdner") in
such capacity) for the Banks under the Loan Agreement referred to below (in such
capacity, the "Agent") and DRESDNER, as Security Agent under such Loan Agreement
(in such capacity, the "Security Agent") for the Secured Parties referred to
below.

                              WITNESSETH:

WHEREAS, AMD Saxonia has been formed for the purpose of constructing, owning,
and operating (i) the Plant and (ii) the integrated Design Center (the
construction, ownership, and operation of the Plant and the Design Center being
hereinafter called the "Project");

WHEREAS, in order to finance the construction of the Plant and the Design
Center, and start-up costs of the operation of the Plant, (i) the Sponsors have
made substantial subordinated loans to, and AMD Holding has made substantial
equity investments in, AMD Saxonia, and (ii) AMD Saxonia has entered into a
Syndicated Loan Agreement, dated 11 March 1997, as amended, (the "Loan
Agreement"), with the banks from time to time party thereto (hereinafter
collectively called the "Banks" and individually called a "Bank"), Dresdner, as
Agent and Paying Agent (in such capacity, the "Paying Agent"), providing, inter
alia, for a senior secured term facility aggregating up to DM 1,500,000,000 (one
billion five hundred million Deutsche Marks);

WHEREAS, pursuant to the Conversion Documents, AMD Saxonia has changed its legal
form to a Kommanditgesellschaft (a limited partnership organised under the laws
of the Federal Republic of Germany) with AMD Holding and AMD Admin as its sole
limited partners (Kommanditisten) and AMD Saxony as its sole general partner
(Komplementar);

WHEREAS, the Sponsors and the Additional Partner Companies are entering into
this Agreement with AMD Saxonia, the Agent, and the Security Agent for the
benefit of the Banks and the Paying Agent (the Agent, the Security Agent, the
Banks and the Paying Agent being hereinafter collectively called the "Secured
Parties" and individually called a "Secured Party"), for the purpose, among
other things, of providing (i) certain assurances with respect to the completion
of the Project, and (ii) certain undertakings to and for the benefit of the
Secured Parties; and

WHEREAS, in extending or continuing to extend credit to AMD Saxonia under the
Loan Agreement, the Banks are relying on the undertakings of the Sponsors and
Additional Partner Companies contained herein;



NOW, THEREFORE, the Sponsors, the Additional Partner Companies, AMD Saxonia, the
Agent (for itself and on behalf of and the Banks), and the Security Agent (on
behalf of the Secured Parties), agree as follows:

SECTION 1.  Definitions.  Unless otherwise defined herein, terms used herein
have the meanings assigned to such terms in the Sponsors' Support Agreement. In
addition, the following terms (whether or not underlined) when used in this
Agreement, including its preamble and recitals, shall, except where the context
otherwise requires, have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof):

     "Additional Partner Companies" has the meaning assigned to such term in the
     introduction to this Agreement.

     "Agent" has the meaning assigned to such term in the introduction to this
     Agreement.

     "Agreement" means this Sponsors' Subordination Agreement, as the same may
     at any time be amended or modified in accordance with the terms hereof and
     in effect.

     "AMD Admin" has the meaning assigned to such term in the introduction to
     this Agreement.

     "AMD Holding" has the meaning assigned to such term in the introduction to
     this Agreement.

     "AMD Holding Junior Liabilities" means all Junior Liabilities owing to AMD
     Holding.

     "AMD Inc." has the meaning assigned to such term in the introduction to
     this Agreement.

     "AMD Saxonia" has the meaning assigned to such term in the introduction to
     this Agreement.

     "AMD Saxony LLC" has the meaning assigned to such term in the introduction
     to this Agreement.

     "Bank" and "Banks" have the respective meanings assigned to such terms in
     the second recital of this Agreement.

     "Dresdner" has the meaning assigned to such term in the introduction to
     this Agreement.

     "Junior Liabilities" means all obligations and liabilities of AMD Saxonia
     to any of the Additional Partner Companies or the Sponsors (including, in
     the case of AMD Holding, any AMD Holding Junior Liabilities), including but
     not limited to, any and all rights and claims arising in connection with
     the capital accounts (Kapitalkonten), loan accounts (Darlehenskonten), and
     the private accounts (Privatkonten) of any partner (Gesellschafter), any
     claim to a distribution-quote (Auseinandersetzungsanspruch) including but
     not limited to any compensation in case of termination (Auflosung), in
     particular claims for liquidation proceeds (Liquidationserlos), withdrawal
     (Ausscheiden) of a partner, repaid capital in case of a capital decrease
     (Herabsetzung der Einlage oder der Pflichteinlage), repayment of capital
     (Ruckzahlung von Einlagen) or any other pecuniary claims (geldwerte
     Forderungen), howsoever created, arising, or evidenced, whether direct or
     indirect, absolute or contingent, or now or hereafter existing, or due or
     to become due.

     "Loan Agreement" has the meaning assigned to such term in the second
     recital of this Agreement.

                                       2



         "Loan Agreement Termination Date" means the first date on or as of
         which (i) all Primary Secured Obligations have been paid in full, and
         (ii) the Banks have no commitments under or in connection with the Loan
         Agreement.

         "Paying Agent" has the meaning assigned to such term in the second
         recital of this Agreement.

         "Project" has the meaning assigned to such term in the first recital of
         this Agreement.

         "Secured Parties" and "Secured Party" have the respective meanings
         assigned to such terms in the fourth recital of this Agreement.

         "Security Agent" has the meaning assigned to such term in the
         introduction to this Agreement.

         "Senior Liabilities" means all obligations and liabilities of AMD
         Saxonia to the Agent, the Security Agent, any Bank, the Paying Agent,
         or either Guarantor (other than any arising solely by reason of any
         pledge or assignment of any AMD Holding Junior Liabilities made to the
         Security Agent pursuant to Section 2(b) hereof) under or arising out of
         any Financing Document, howsoever created, arising, or evidenced,
         whether direct or indirect, absolute or contingent, or now or hereafter
         existing, or due or to become due, it being expressly understood and
         agreed that the term "Senior Liabilities" shall include, without
         limitation, any and all interest accruing on any of the Senior
         Liabilities after the commencement of any proceedings referred to in
         Section 4, notwithstanding any provision or rule of law which might
         restrict the rights of the Security Agent, as against AMD Saxonia, any
         Additional Partner Company, or any other Person, to collect such
         interest.

         "Sponsors" has the meaning assigned to such term in the introduction to
         this Agreement.

         "Sponsors' Support Agreement" means the Sponsors' Support Agreement
         between the Sponsors, the Additional Partner Companies, the Agent and
         the Security Agent dated 11 March 1997, as amended by the First
         Amendment to Sponsors' Support Agreement dated 6 February 1998, the
         Second Amendment to Sponsors' Support Agreement dated 29 June 1999, the
         Third Amendment to Sponsors' Support Agreement dated 20 February 2001
         and the Accession Agreement and Fourth Amendment to Sponsors' Support
         Agreement dated of 3 June 2002, and as the same may at any time be
         amended or modified in accordance with the terms thereof and in effect.

In this Agreement, unless the context requires otherwise, any reference to an
Operative Document or a Project Agreement (including, in each case, any
reference thereto as being in the form set out in a Schedule to the Loan
Agreement) shall be a reference to such Document or Agreement as it shall have
been, or from time to time may be, amended, varied, re-issued, replaced, novated
or supplemented, in each case, in accordance with its terms and this Agreement.
For the avoidance of doubt, any reference in the Agreement to stated capital
(Stammkapital), capital reserves or any other similar term relating to the
capital structure of a German limited liability company shall, following the
Conversion Effective Date (as defined in the Sponsors' Support Agreement), be
deemed to be a reference to the capital (Haftsummen and Pflichteinlagen) or
capital reserves of a limited partnership under German law, save to the extent
the context requires otherwise.

In this Agreement, unless the context requires otherwise, (i) any statutory
provisions shall be construed as references to those provisions as amended,
modified, re-enacted, or replaced from time to time; (ii) words importing a
gender include every gender; (iii) references to Sections and Schedules are to
Sections of and Schedules to this Agreement; and (iv) references to this
Agreement include its Schedules. Section headings are inserted for reference
only and shall be ignored in construing this

                                       3



Agreement. A time of day, unless otherwise specified, shall be construed as a
reference to Frankfurt am Main time.

SECTION 2. Obligations of the Sponsors and the Additional Partner Companies. The
Sponsors and Additional Partner Companies will, from time to time, (a) promptly
notify the Security Agent of the creation of any Junior Liabilities pursuant to
the Sponsors' Support Agreement, the Sponsors' Loan Agreement or the Revolving
Loan Facility Agreement, and (b) in the case of AMD Holding, and as collateral
security for all Senior Liabilities, indorse without recourse, deliver, and
pledge to the Security Agent any and all promissory notes or other instruments
evidencing any of the AMD Holding Junior Liabilities, in a manner satisfactory
to the Security Agent.

SECTION 3. Subordination. Except as expressly provided in this Agreement, or as
the Agent (acting on the instructions of an Instructing Group) may hereafter
otherwise expressly consent in writing, the payment of all Junior Liabilities
shall be postponed and subordinated to the payment in full of all Senior
Liabilities, and no payments or other distributions whatsoever in respect of any
Junior Liabilities shall be made, nor shall any property or assets of AMD
Saxonia be applied to the purchase or other acquisition or retirement of any
Junior Liabilities; provided, however, that as long as no Event of Default, nor
any Unmatured Event of Default nor, with respect to AMD Saxonia or any of the
Sponsors or Additional Partner Companies, any event which is of the type
described in Section 11.1 (e), (f), (g) or (h) of the AMD Inc. 1999 Loan and
Security Agreement has occurred and is continuing, there are excepted from the
foregoing provisions of this Section 3 (without duplication):

          (i)    those payments to either of the Sponsors made by AMD Saxonia
                 pursuant to Article II of the Management Service Agreement;

          (ii)   those payments to AMD Holding made by AMD Saxonia pursuant to
                 Article IV of the AMD Saxonia Wafer Purchase Agreement;

          (iii)  those payments to AMD Inc. made by AMD Saxonia in respect of
                 purchases of equipment in the ordinary course of business and
                 on an arm's length basis and not exceeding DM 50,000,000
                 (fifty million Deutsche Marks) in aggregate;

          (iv)   those payments to the Sponsors made by AMD Saxonia in
                 accordance with Section 6.3 of the Sponsors' Support Agreement;

          (v)    distributions in respect of the Junior Liabilities to the
                 extent such distributions constitute non cash credits
                 expressly permitted to be made under the Management Service
                 Agreement or the AMD Saxonia Wafer Purchase Agreement;

          (vi)   those payments to AMD Inc. made by AMD Saxonia pursuant to the
                 AMD Saxonia Hedging Agreement other than payments of premium
                 and other than payments in respect of the early termination
                 thereof;

          (vii)  with effect from 1 January 2002, payments of principal (but not
                 interest) under the Revolving Loan Facility Agreement;

          (viii) the repayment of Sponsors' Loans in an amount equal to the
                 amount of any increase in AMD Saxonia's equity capital paid in
                 cash between 30 November 2000 and 31 December 2000;

          (ix)   those payments by AMD Saxonia to AMD Holding and AMD Admin of
                 such amounts as are necessary to pay income tax liabilities
                 which have become due and payable resulting from AMD Holding's
                 and AMD Admin's partnership interests in AMD Saxonia; and

                                       4



         (x)      those payments by AMD Saxonia to AMD Saxony LLC of costs and
                  expenses and compensation in connection with AMD Saxony LLC
                  acting as general partner of AMD Saxonia, up to a maximum
                  aggregate amount of $75,000 per annum (or such other amount as
                  may be agreed by AMD Saxonia and the Agent in writing).

and provided, further, that there are excepted from the foregoing terms of this
Section 3:

         (A)      performance by AMD Saxonia of its obligations (other than
                  payment obligations, if any) under the AMD Saxonia Wafer
                  Purchase Agreement, the AMD Saxonia Research Agreement or the
                  License Agreement; and

         (B)      for the avoidance of doubt, employee salary funds withheld by
                  AMD Saxonia for employees to acquire stock of AMD Inc. in
                  connection with an employee stock purchase plan.

Moreover, if the AMD Saxonia Wafer Purchase Agreement or the Management Service
Agreement terminates for any reason whatsoever, AMD Saxonia shall be permitted
to credit the amounts payable thereunder against the amounts receivable by it
thereunder strictly in accordance with the terms and provisions of each such
Operative Document.

In addition to, and without intending to derogate from, the foregoing provisions
of this Section 3, each of the Sponsors and Additional Partner Companies hereby
subordinates its claims arising under or in connection with the Sponsors'
Support Agreement, Sponsors' Loan Agreement and the Revolving Loan Facility
Agreement to all other present and future creditors of AMD Saxonia, but the
subordination under this sentence shall not apply to any such claims as long as
and to the extent that omitting such claims from the subordination under this
sentence will not result in or lead to an increase of an overindebtedness of AMD
Saxonia within the meaning of Sec. 19 Insolvency Act (InsO), to be determined on
the basis of AMD Saxonia's statement of affairs (Vermogensstatus) as per any
relevant point in time or, if applicable, in an opening or closing liquidation
balance sheet (Liquidationseroffnungs-, schlu(beta)bilanz). For the purposes of
determining whether a repayment of principal or the payment of interest by AMD
Saxonia is permitted under this paragraph the value of the assets and
liabilities of AMD Saxonia to be included in the relevant statement of affairs
shall always be determined by the managing directors and confirmed by the
Auditor in accordance with the applicable rules. The Sponsors and Additional
Partner Companies shall not be entitled to make payment claims under the
Sponsors' Support Agreement, Sponsors' Loan Agreement or the Revolving Loan
Facility Agreement as long as there is an overindebtedness of AMD Saxonia within
the above meaning, or as long as there is not a liquidation surplus, or in a
bankruptcy proceeding over the assets of AMD Saxonia, it being understood that
the Sponsors and Additional Partner Companies' claims shall rank behind all
other creditors in case of any insolvency proceeding which is governed by the
provisions of the Insolvency Act (Insolvenzordnung).

SECTION 4.  Bankruptcy, Insolvency, etc. In the event of any dissolution,
winding up, liquidation, reorganization, or other similar proceedings relating
to AMD Saxonia or to its creditors, as such, or to its property (whether
voluntary or involuntary, partial or complete, and whether in bankruptcy,
insolvency, compromise proceedings (Vergleichsverfahren) or any other
marshalling of the assets and liabilities of AMD Saxonia, or any sale of all or
substantially all of the assets of AMD Saxonia, or otherwise), the Senior
Liabilities shall first be paid in full before any of the Sponsors and
Additional Partner Companies shall be entitled to receive and to retain any
payment or distribution in respect of the Junior Liabilities, and in order to
implement the foregoing, (a) each of the Sponsors and the Additional Partner
Companies hereby irrevocably agrees that in such event all payments and
distributions of any kind or character in respect of the Junior Liabilities to
which such Sponsor or Additional Partner Company would be entitled if the Junior
Liabilities were not subordinated, or, in the case of the AMD Holding Junior
Liabilities, subordinated and pledged or assigned, pursuant to this Agreement,
shall be made directly to the Security Agent; (b) upon the commencement and
during the continuance of any proceedings referred to in this Section 4, the
Security Agent shall have the

                                       5



right to require any or all of the Sponsors or the Additional Partner Companies
to claim, enforce, prove, or vote in respect of the Junior Liabilities in such
manner as is directed by the Security Agent and as is permitted by applicable
law, including, without limitation, to direct that all payments and
distributions of any kind or character in respect of the Junior Liabilities to
which such Sponsor or Additional Partner Company would be entitled if the Junior
Liabilities were not subordinated (or, in the case of the AMD Holding Junior
Liabilities, subordinated and (if applicable) pledged) pursuant to this
Agreement, shall be made directly to the Security Agent; provided, that if the
Security Agent shall not have required a Sponsor or Additional Partner Company
to claim, enforce, prove, or vote in respect of any of the Junior Liabilities on
or before the day which is 10 Business Days before a date on which the failure
to so claim, enforce, prove, or vote would invalidate or otherwise materially
adversely affect the rights of such Sponsor or Additional Partner Company, such
Sponsor or Additional Partner Company shall have the right to claim, enforce,
prove, or vote in respect of such Junior Liabilities in such Sponsor's or
Additional Partner Company's sole discretion; and (c) each Sponsor and
Additional Partner Company hereby irrevocably agrees that the Security Agent
may, at its sole discretion for purposes hereof, in the name of such Sponsor,
Additional Partner Company or otherwise, demand, sue for, collect, receive, and
receipt for any and all such payments or distributions, and file, prove, and
vote, or consent in any such proceedings with respect to, any and all claims of
such Sponsor or Additional Partner Company relating to the Junior Liabilities.

SECTION 5.  Payments Held in Trust. In the event that any of the Sponsors or
Additional Partner Companies receives any payment or other distribution of any
kind or character from AMD Saxonia or from any other source whatsoever in
respect of any of the Junior Liabilities, other than as expressly permitted by
the terms of this Agreement, such payment or other distribution shall be
received in trust for the Security Agent, and promptly turned over by such
Sponsor or Additional Partner Company to the Security Agent. Each of the
Sponsors and Additional Partner Companies will mark its books and records, and
cause AMD Saxonia to mark its books and records, as to clearly indicate that the
Junior Liabilities are subordinated in accordance with the terms of this
Agreement, and will cause to be clearly inserted in any instrument which at any
time evidences any of the Junior Liabilities a statement to the effect that the
payment thereof is subordinated in accordance with the terms of this Agreement.
Each of the Sponsors and Additional Partner Companies will execute such further
documents or instruments and take such further action as the Security Agent may
reasonably request from time to time to carry out the intent of this Agreement.

SECTION 6.  Application of Payments; No Subrogation. All payments and
distributions received by the Security Agent in respect of the Junior
Liabilities in accordance with the terms hereof, to the extent received in or
converted into cash, may be applied by the Security Agent first to the payment
of any and all expenses (including reasonable attorneys' fees and legal
expenses) paid or incurred by the Security Agent in enforcing this Agreement or
in endeavouring to collect or realize upon any of the Junior Liabilities or any
security therefor in accordance with the terms hereof, and any balance thereof
shall, solely as between the Sponsors, Additional Partner Companies and the
Security Agent, be applied by the Security Agent, in the manner provided by the
Loan Agreement, toward the payment of the Senior Liabilities remaining unpaid;
but, as between AMD Saxonia and its creditors, no such payments or distributions
of any kind or character shall be deemed to be payments or distributions in
respect of the Senior Liabilities; and, notwithstanding any such payments or
distributions received by the Security Agent in respect of the Junior
Liabilities and so applied by the Security Agent toward the payment of the
Senior Liabilities, each of the Sponsors and Additional Partner Companies shall
be subrogated to the then-existing rights of the Agent, the Security Agent, and
the Banks, if any, in respect of the Senior Liabilities only at such time as (i)
the Agent, the Security Agent, and the Banks shall have received payment of the
full amount of the Senior Liabilities, as provided for in Section 9, or (ii)
this Agreement shall terminate pursuant to Section 15. Each Secured Party shall,
at the relevant Sponsor's or Additional Partner Company's request and expense
made after such time, execute and deliver to such Sponsor or Additional Partner
Company appropriate documents (without recourse or warranty whatsoever) to
evidence the transfer by subrogation to such Sponsor or Additional Partner
Company of an interest in the Senior Liabilities resulting from the application
of payments in the

                                       6



manner contemplated by this Section 6. The obligations of the Secured Parties
under the preceding sentence shall survive any termination of this Agreement.

SECTION 7.  Waivers by the Sponsors and the Additional Partner Companies. Each
of the Sponsors and Additional Partner Companies hereby waives: (a) notice of
acceptance by the Agent, the Security Agent, or any Bank of this Agreement; (b)
notice of the existence or creation or non-payment of all or any of the Senior
Liabilities; and (c) all diligence in collection or protection of or realization
upon the Senior Liabilities or any thereof or any security therefor.

SECTION 8.  Obligations of the Sponsors and the Additional Partner Companies.
None of the Sponsors or the Additional Partner Companies will, without the prior
written consent of the Security Agent: (a) transfer or assign, or attempt to
enforce or collect, any Junior Liabilities or any rights in respect thereof,
except (i) that AMD Inc. may assign any Senior Liability to AMD Holding, and
(ii) that the Sponsors and Additional Partner Companies may enforce or collect
any Junior Liabilities that are expressly permitted to be paid pursuant to
Section 3; provided, that nothing in this Agreement shall be deemed to prevent
AMD Inc. from seeking damages, equitable relief or otherwise enforcing any
rights it may have against AMD Saxonia arising out of (x) any tort or
infringement of AMD Inc. tangible or intangible property rights (including
without limitation rights under applicable patent, copyright and trade secret
laws and similar principles) to the extent such tort or infringement arises
after the date of termination of the AMD Holding Wafer Purchase Agreement or (y)
a breach by AMD Saxonia of its obligations under the License Agreement to the
extent, but only to the extent, such tort or infringement arises after the date
of termination of the AMD Holding Wafer Purchase Agreement; (b) take any
collateral security for any Junior Liabilities; (c) convert any Junior
Liabilities into Equity Capital of AMD Saxonia (it being understood and agreed
that (i) the Sponsors' Loans made by AMD Holding (but not AMD Inc.) may be
converted into Equity Capital of AMD Saxonia and (ii) for the avoidance of
doubt, a repayment permitted under Section 3 (viii) shall not be considered a
conversion hereunder); or (d) commence, or join with any other creditor
commencing, any bankruptcy, reorganisation, or insolvency proceedings with
respect to AMD Saxonia.

SECTION 9.  Continuing Subordination. This Agreement shall in all respects be a
continuing agreement and shall remain in full force and effect (notwithstanding,
without limitation, the dissolution of any of the Sponsors or Additional Partner
Companies, or that at any time or from time to time all Senior Liabilities may
have been paid in full), but shall automatically terminate on the Loan Agreement
Termination Date.

SECTION 10. Rights of the Agent, the Security Agent, and the Banks. The Agent,
the Security Agent, and each Bank may, from time to time, at its sole discretion
and without notice to any of the Sponsors or Additional Partner Companies, take
any or all of the following actions without affecting its or their rights under
this Agreement: (a) retain or obtain a security interest in any property of any
Person to secure any of the Senior Liabilities; (b) retain or obtain the primary
or secondary obligations of any other obligor or obligors with respect to any of
the Senior Liabilities; (c) extend or renew for one or more periods (whether or
not longer than the original period), alter or exchange any of the Senior
Liabilities, or release or compromise any obligation of any nature of any
obligor with respect to any of the Senior Liabilities; (d) compromise, settle,
release, renew, extend, indulge, amend, change, waive, modify, or supplement in
any respect any of the terms or conditions of any of the Operative Documents;
and (e) release its lien on or security interest in, or surrender, release, or
permit any substitution or exchange for, all or any part of any property
securing any of the Senior Liabilities, or extend or renew for one or more
periods (whether or not longer than the original period) or release, compromise,
alter, or exchange any obligations of any nature of any obligor with respect to
any such property.

SECTION 11. Transfer of Obligations; Enforcement. The Security Agent, the Agent,
or any Bank may, from time to time, without notice to any of the Sponsors or
Additional Partner Companies, but subject, however, to the provisions of Section
26 of the Loan Agreement, assign or transfer any or all of the Senior
Liabilities or any interest therein; and, notwithstanding any such assignment or
transfer

                                       7



or any subsequent assignment or transfer thereof, such Senior Liabilities shall
be and remain Senior Liabilities for purposes of this Agreement, and every
immediate and successive assignee or transferee of any of the Senior Liabilities
or of any interest therein, shall, to the extent of the interest of any such
assignee or transferee in the Senior Liabilities, be entitled to the benefits of
this Agreement to the same extent as if such assignee or transferee were the
transferor. The rights of the Secured Parties hereunder shall be exercisable
solely by the Security Agent on behalf of the Secured Parties, unless either the
Security Agent is not able pursuant to applicable law to realize the practical
benefits of such rights on behalf of the Secured Parties or the limitations set
forth in this sentence would otherwise materially adversely affect the rights of
the Secured Parties hereunder.

SECTION 12.  Additional Provisions. None of the Agent, the Security Agent, or
the Banks shall be prejudiced in its rights under this Agreement by any act or
failure to act of any of AMD Saxonia or any of the Sponsors or Additional
Partner Companies, or any noncompliance of AMD Saxonia or any of the Sponsors or
Additional Partner Companies with any agreement or obligation, regardless of any
knowledge thereof which the Agent, the Security Agent, or such Bank may have or
with which the Agent, the Security Agent, or such Bank may be charged; and no
action of the Agent, the Security Agent, or any Bank permitted hereunder shall
in any way affect or impair the rights of the Agent, the Security Agent, or any
Bank, and the obligations of each of the Sponsors and Additional Partner
Companies, under this Agreement. For the purposes of this subordination, Senior
Liabilities shall include all obligations of AMD Saxonia under or in connection
with any of the Operative Documents to the Agent, the Security Agent, the Paying
Agent and each Bank, notwithstanding any right or power of any AMD Saxonia or
anyone else to assert any claim or defence as to the invalidity or
unenforceability of any such obligation, and no such claim or defence shall
affect or impair the agreements and obligations of the Sponsors and Additional
Partner Companies hereunder; provided, however, that Senior Liabilities shall
not include any obligations or liabilities of AMD Saxonia which a court of
competent jurisdiction shall have determined (which determination shall be final
and unappealable) are invalid or unenforceable.

SECTION 13.  Cumulative Remedies; Modifications in Writing. The remedies
provided for herein are cumulative and are not exclusive of any remedies that
may be available to the Agent or the Security Agent at law, in equity, or
otherwise. No amendment, modification, supplement, termination, or waiver of or
to any provision of this Agreement, or consent to any departure by any of the
Sponsors, Additional Partner Companies or AMD Saxonia therefrom, shall be
effective unless the same shall be in writing and signed by or on behalf of the
Agent and the Security Agent.

SECTION 14.  Severability of Provisions. In case any provision of this Agreement
is invalid or unenforceable, the validity or enforceability of the remaining
provisions hereof shall remain unaffected. The parties hereto shall have an
obligation to replace any invalid provision by a valid provision which
approximates best the economic purpose of the invalid provision.

SECTION 15.  Termination. This Agreement and the obligations of the parties
hereunder shall terminate on the Loan Agreement Termination Date; provided, that
such obligations shall automatically revive and be reinstated if and to the
extent that AMD Saxonia shall subsequently have obligations to any of the
Secured Parties under or arising out of any of the Financing Documents.

SECTION 16.  Assignment. This Agreement shall be binding upon and shall inure to
the benefit of each party hereto and their respective successors and assigns;
provided, however, that the Security Agent, the Agent, and the Banks may
transfer their rights under this Agreement, subject, however, to the provisions
of ss. 26 of the Loan Agreement; provided, further, that none of the Sponsors or
Additional Partner Companies or AMD Saxonia shall have the right to transfer or
assign its rights under this Agreement without the prior written consent of the
Agent and the Security Agent; and provided, further, that AMD Saxonia may assign
this Agreement to the Security Agent as security for the obligations of AMD
Saxonia under the Loan Agreement and the other Operative Documents.
Notwithstanding any such assignment or transfer or any subsequent assignment or
transfer thereof, Senior Liabilities shall be and remain Senior Liabilities for
the purposes of this Agreement, and every

                                       8



immediate and successive assignee or transferee of any of the Senior Liabilities
or of any interest therein shall, to the extent of the interest of such assignee
or transferee in the Senior Liabilities, be entitled to the benefits of this
Agreement to the same extent as if such assignee or transferee were the
transferor, subject, however, to the provisions of Section 11; provided,
however, that, in addition to its rights under Section 11, unless the Security
Agent (acting on the instructions of an Instructing Group) shall otherwise
consent in writing, the Security Agent shall have an unimpaired right, prior and
superior to that of any such assignee or transferee, to enforce this Agreement
for the benefit of the Secured Parties as to those of the Senior Liabilities
which have not been so assigned or transferred.

SECTION 17.  Notice. All notices, demands, instructions, and other
communications required or permitted to be given to or made upon any party
hereto shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage pre-paid, return receipt requested, or by
pre-paid telex, TWX, or telegram, or by pre-paid courier service, or by
telecopier, and shall be deemed to be given for purposes of this Agreement on
the day that such writing is delivered or sent to the intended recipient thereof
in accordance with the provisions of this Section 17. Unless otherwise specified
in a notice sent or delivered in accordance with the foregoing provisions of
this Section 17, notices, demands, instructions, and other communications in
writing shall be given to or made upon the respective parties hereto at their
respective addresses (or to their respective telex, TWX or telecopier numbers)
indicated below.

To the Security Agent:

Dresdner Bank AG, as Security Agent
Ostra Allee 9
01067 Dresden
Attention: Betreuung Unternehmenskunden
Facsimile No.: (49) 351 489-1300

To the Agent:

Dresdner Bank Luxembourg S.A., as Agent
26, rue du Marche-aux-Herbes
L-2097 Luxembourg
Attention: Direktion
Facsimile No.: (352) 4760-824

To AMD Inc.:

Advanced Micro Devices, Inc.
One AMD Place
Sunnyvale, California  94088
Attention: General Counsel
Facsimile No.: (1) (408)774 7399


To AMD Holding:

AMD Saxony Holding GmbH
Wilschdorfer Landstrasse 101
01109 Dresden
Attention: Geschaftsfuhrer
Facsimile No.: (49) 351 277 91300

                                       9



 To AMD Saxony LLC:

One AMD Place
Mailstop 150
Sunnyvale, CA 94088
Attention: Manager
Facsimile No.: (408) 774 7399

To AMD Admin:

Wilschdorfer Landstrasse 101
01109 Dresden
Attention: Geschaftsfuhrer
Facsimile No.: (49) 351 277 91300

To AMD Saxonia:

AMD Saxony Manufacturing GmbH
Wilschdorfer Landstrasse 101
01109 Dresden
Attention: Geschaftsfuhrer
Facsimile No.: (49) 351 277 91300

SECTION 18. Relationship to Other Agreements. The rights of the Agent and the
Security Agent pursuant to this Agreement are in addition to any other rights or
remedies which the Agent and the Security Agent may have under statutory law or
other agreements between one or more of the Agent, the Security Agent, the
Banks, the Sponsors, the Additional Partner Companies and AMD Saxonia. Where
such rights and remedies are in conflict with the provision of this Agreement,
the provision of this Agreement shall prevail.

SECTION 19. Governing Law. This Agreement and all rights and obligations of the
parties arising hereunder or in connection herewith shall be governed by the
Laws of the Federal Republic of Germany.

SECTION 20. Jurisdiction. Each of the Sponsors, Additional Partner Companies
and AMD Saxonia hereby submits to the exclusive jurisdiction of the courts in
Frankfurt am Main for any dispute arising out of or in connection with this
Agreement. AMD Inc. and AMD Saxony LLC state that Advanced Micro Devices GmbH,
whose address is Rosenheimerstrasse 143b, 81671 Munich, Germany, Attention:
Legal Department, Tel: +49 89 450 530, Fax: +49 89 406 490, Telex: 841523883, is
their accredited agent for service of process and hereby undertakes to maintain
an agent for service in Germany. The foregoing submission to jurisdiction shall
not (and shall not be construed so as to) limit the rights of the Agent or the
Security Agent to take suits, actions, or proceedings against a Sponsor or an
Additional Partner Company to enforce any judgment rendered by the courts in
Frankfurt am Main in any other court or entity of competent jurisdiction where
such Sponsor or Additional Partner Company has assets, nor shall the taking of
suits, actions, or proceedings to enforce any such judgment in one or more
jurisdictions preclude the taking of enforcement proceedings in any other
jurisdiction, whether concurrently or not.

SECTION 21. Use of English Language. This Agreement has been executed in the
English language. All certificates, reports, notices, and other documents and
communications given or delivered pursuant to this Agreement shall be in the
English language and, if reasonably requested by

                                       10



 the Agent, shall be accompanied by a certified German translation promptly
thereafter. In the event of any inconsistency, the English language version of
any such document shall control.

SECTION 22. Operative Document. This Agreement is an Operative Document executed
pursuant to the Loan Agreement.

                [Remainder of this page intentionally left blank]

                                       11



          IN WITNESS WHEREOF, each of the parties set out below has caused this
Agreement to be duly executed and delivered by its respective officer or agent
thereunto duly authorised as of the date first above written.

                                     ADVANCED MICRO DEVICES, INC.

                                     By:________________________________________
                                     Its________________________________________

                                     AMD SAXONY HOLDING GMBH

                                     By:________________________________________
                                     Its Managing Director

                                     AMD SAXONY LLC

                                     By:________________________________________
                                     Its Manager

                                     AMD SAXONY ADMIN GMBH

                                     By:________________________________________
                                     Its Managing Director

                                     AMD SAXONY MANUFACTURING GMBH

                                     By:________________________________________
                                     Its________________________________________

                                     DRESDNER BANK LUXEMBOURG S.A.
                                     as Agent

                                     By:________________________________________
                                     Its________________________________________

                                     DRESDNER BANK AG
                                     as Security Agent

                                     By:________________________________________
                                     Its________________________________________

            [Signature page to the Sponsors' Subordination Agreement]

                                       12

EX-10.43(L-4)

                                                             Exhibit 10.43 (l-4)

                         THIRD AMENDMENT TO AMD SAXONIA
                            WAFER PURCHASE AGREEMENT

                  THIS THIRD AMENDMENT to AMD Saxonia Wafer Purchase Agreement
(this "Third Amendment"), dated as of 3 June 2002, is made between AMD SAXONY
HOLDING GMBH, Dresden, registered in the Commercial Register of the Dresden
County Court, HRB 13931 ("AMD Holding"), and AMD SAXONY MANUFACTURING GMBH,
Dresden, registered in the Commercial Register of the Dresden Country Court HRB
13186 (to be known as "AMD Saxony LLC & Co. KG" following the Conversion
Effective Date) ("AMD Saxonia").

                                    RECITALS

                  WHEREAS, AMD Saxonia is an indirect wholly-owned Subsidiary
(such and other capitalised terms having the meanings assigned thereto in the
AMD Saxonia Wafer Purchase Agreement (as defined below)) of Advanced Micro
Devices, Inc., a corporation organised and existing under the laws of the State
of Delaware, United States of America ("AMD Inc.");

                  WHEREAS, AMD Inc., AMD Holding and AMD Saxonia are involved in
a project pursuant to which AMD Saxonia has constructed, and owns and operates
inter alia the Plant located in Dresden, Germany, to manufacture Wafers using
high-volume semiconductor wafer fabrication processes;

                  WHEREAS, AMD Inc. and AMD Holding are party to the AMD Holding
Wafer Purchase Agreement dated as of 11 March 1997, as amended by the First
Amendment to the AMD Holding Wafer Purchase Agreement dated as of 20 February
2001 (as amended, supplemented or otherwise modified from time to time, the "AMD
Holding Wafer Purchase Agreement"), pursuant to which, among other things, AMD
Inc. has agreed to purchase from AMD Holding, and AMD Holding has agreed to
supply on an exclusive basis to AMD Inc., all Wafers as are ordered from time to
time by AMD Inc. from AMD Holding, in each case on the terms and conditions of
the AMD Holding Wafer Purchase Agreement;

                  WHEREAS, AMD Holding and AMD Saxonia are party to that certain
AMD Saxonia Wafer Purchase Agreement dated as of 11 March 1997, as amended by
the First Amendment to AMD Saxonia Wafer Purchase Agreement dated as of 8
February 1998 and the Second Amendment to AMD Saxonia Wafer Purchase Agreement,
by and between AMD Holding and AMD Saxonia, dated as of 20 February 2001 (as so
amended, the "AMD Saxonia Wafer Purchase Agreement"), pursuant to which AMD
Holding has the exclusive right to purchase Wafers from AMD Saxonia in order to
enable AMD Holding to fulfill its obligations under the AMD Holding Wafer
Purchase Agreement, and AMD Saxonia has agreed on such exclusive basis, to
manufacture and sell Wafers to AMD Holding;

                                      -1-



                  WHEREAS, the parties now desire to amend the AMD Saxonia Wafer
Purchase Agreement to revise certain definitions, all on the terms and
conditions more particularly set forth in this Third Amendment; and

                  WHEREAS, pursuant to the Conversion Documents (as defined in
the Sponsors' Support Agreement dated March 11, 1997 among the Sponsors, AMD
Saxony Admin GmbH, with its seat in Dresden ("AMD Admin"), AMD Saxony LLC ("AMD
Saxony LLC"), Dresdner Bank Luxembourg S.A. as Agent and Dresdner Bank AG as
Security Agent, as amended by the First Amendment dated February 6, 1998, the
Second Amendment dated June 29, 1999, the Third Amendment dated February 20,
2001 and the Accession Agreement and Fourth Amendment dated 3 June 2002 (the
"Sponsors' Support Agreement")), AMD Saxonia proposes to change its legal form
to a Kommanditgesellschaft (a limited partnership organized under the laws of
the Federal Republic of Germany), with AMD Holding and AMD Admin as its sole
limited partners (Kommanditisten) and AMD Saxony LLC as its sole general partner
(Komplementar);

                  NOW, THEREFORE, in consideration of the mutual agreements
contained herein, intending to be legally bound hereby, the parties hereto agree
as follows:

                                   ARTICLE I
                                   Amendments

          Section 1.1   With effect from the Conversion Effective Date (as
defined in the Sponsors' Support Agreement), the AMD Saxonia Wafer Purchase
Agreement is hereby amended as more particularly set out below. In all other
respects, the AMD Saxonia Wafer Purchase Agreement shall remain in full force
and effect.

          (a)     Section 1.01(47), the definition of "Person", shall be deleted
and replaced with the following:

                  ""Person" means an individual, partnership, limited
                  partnership, limited liability company, joint venture,
                  trustee, trust, corporation, unincorporated association or
                  other entity, or a government, state or agency or political
                  subdivision thereof;"

          (b)     Section 1.01(65)(d), pertaining to Total Costs, shall be
deleted and replaced with the following:

                  "(d) Total Costs shall include all interest expense paid or
                  accrued by AMD Saxonia, including all interest expense
                  relating to loans to AMD Saxonia from third parties.
                  Notwithstanding the above or anything herein to the contrary,
                  with effect from 1 January 2002, Total Costs shall not include
                  any interest expense (whether such interest is paid or
                  capitalised) relating to loans to AMD Saxonia from AMD Holding
                  or AMD Inc. ("Intercompany Loans") nor shall total costs
                  include any imputed interest expense on any such Intercompany
                  Loans that have been repaid."

                                      -2-



          (c)     Section 1.01(65)(e), pertaining to Total Costs, shall be
deleted and replaced with the following:

                  "(e) Notwithstanding anything herein to the contrary with
                  effect from 1 January 2002, Total Costs shall not include any
                  trade tax (Gewerbesteuer)."

          (d)     New Section 1.01(65)(j) shall be added as follows:

                  "(j) For the avoidance of doubt, Total Costs shall also
                  include all expense reimbursements paid by AMD Saxonia to AMD
                  Saxony LLC, but shall not include compensation paid by AMD
                  Saxonia to AMD Saxony LLC for acting as general partner of AMD
                  Saxonia."

                                   ARTICLE II
                         Representations and Warranties

          Section 2.1   Each of AMD Holding and AMD Saxonia, severally and for
itself alone, hereby represents and warrants, as of the date hereof and as of
the Conversion Effective Date, to the other as follows:

          (a)     Organisation; Corporate Power. It is duly incorporated and
validly existing under the laws of the jurisdiction of its organisation, and has
all necessary power and authority to execute and deliver this Third Amendment
and, following the Conversion Effective Date, to consummate the transactions
contemplated by the AMD Saxonia Wafer Purchase Agreement as amended by this
Third Amendment;

          (b)     Corporate Authority; No Conflict. The execution and delivery
by it of this Third Amendment, and the performance by it, following the
Conversion Effective Date, of its obligations under the AMD Saxonia Wafer
Purchase Agreement as amended by this Third Amendment have been duly authorised
by all necessary corporate action (including any necessary shareholder action)
on its part, and do not and will not (i) violate any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree, determination, or award
presently in effect having applicability to it, or of its charter or by-laws; or
(ii) result in a breach of, result in a mandatory prepayment or acceleration of
indebtedness evidenced by or secured by, or constitute a default under, any
indenture or loan or credit agreement, or any other agreement or instrument to
which it is a party or by which it or its properties may be bound, or require
the creation or imposition of any encumbrance of any nature upon or with respect
to any of the properties now owned or hereafter acquired by it; and

          (c)     Valid and Binding Obligations. Following the Conversion
Effective Date, the AMD Saxonia Wafer Purchase Agreement, as amended by this
Third Amendment, shall constitute its legal, valid, and binding obligation,
enforceable against it in accordance with its terms; subject, however, to
applicable bankruptcy, insolvency, reorganisation, moratorium, or similar laws
affecting creditors' rights generally and, as to enforceability, by general
equitable principles.

                                      -3-




                                  ARTICLE III
                                  Miscellaneous

        Section 3.1  Miscellaneous.

        (a)     This Third Amendment is limited as specified and, except as
specifically set forth herein, shall not constitute a modification, amendment,
or waiver of any other provision of the AMD Saxonia Wafer Purchase Agreement or
any provision of any other Operative Document. Except as specifically amended by
this Third Amendment, the AMD Saxonia Wafer Purchase Agreement shall remain in
full force and effect and is hereby ratified and confirmed.

        (b)     Without prejudice to the foregoing, AMD Saxonia hereby ratifies
and confirms that its obligations under the AMD Saxonia Wafer Purchase
Agreement, as amended, shall continue in full force and effect following the
Conversion.

        (c)     This Third Amendment shall be an Operative Document under and
for purposes of the Sponsors' Support Agreement dated 11 March 1997, as amended
by the First Amendment to Sponsors' Support Agreement dated 6 February 1998, the
Second Amendment to Sponsors' Support Agreement dated 29 June 1999, the Third
Amendment to Sponsors' Support Agreement dated 20 February 2001 and the
Accession Agreement and Fourth Amendment to Sponsors' Support Agreement dated of
even date herewith (as amended, the "Sponsors' Support Agreement").

        (d)     This Third Amendment is in the English language, which language
shall be controlling in all respects.

        (e)     This Third Amendment may be executed in any number of
counterparts and by different parties on separate counterparts which when taken
together shall constitute one agreement.

        (f)     Sections 5.07, 5.08, 5.09, and 5.10 of the AMD Saxonia Wafer
Purchase Agreement shall apply, mutatis mutandis, to this Amendment, as if set
out herein in full.

                  [Remainder of page intentionally left blank]

                                       -4-



                  IN WITNESS OF THE FOREGOING, AMD Holding and AMD Saxonia have
caused this Amendment to be executed by their authorised representatives as of
the date first written above.

                                     AMD SAXONY HOLDING GMBH

                                     By: /s/ Hans-Raimund Deppe
                                        ----------------------------------------
                                     Dr. Hans-Raimund Deppe
                                     Its Managing Director (Geschaftsfuhrer)


                                     AMD SAXONY MANUFACTURING GMBH

                                     By: /s/ Hans-Raimund Deppe
                                        ----------------------------------------
                                     Dr. Hans-Raimund Deppe
                                     Its Managing Director (Geschaftsfuhrer)

EX-10.43(O-1)

                                                             Exhibit 10.43 (o-1)

                                 FIRST AMENDMENT

                                       TO

                        AMD INC. SUBORDINATION AGREEMENT

THIS FIRST AMENDMENT (this "Amendment"), dated 20 February 2001, is made between
ADVANCED MICRO DEVICES, INC., a corporation organized and existing under the
laws of the State of Delaware, United States of America, with its chief
executive office and principal place of business at One AMD Place, Sunnyvale,
California 94088, United States of America ("AMD Inc."), AMD SAXONY HOLDING
GMBH, Dresden, registered in the Commercial Register of the Dresden County
Court, HRB 13931 ("AMD Holding"; and, together with AMD Inc., collectively, the
"Sponsors"), DRESDNER BANK LUXEMBOURG S.A., as Agent (and successor to Dresdner
Bank AG in such capacity) under the Loan Agreement referred to below (in such
capacity, the "Agent") for the Banks referred to below, and DRESDNER BANK AG, as
Security Agent under such Loan Agreement (in such capacity, the "Security
Agent"), for the Secured Parties referred to below.

                              W I T N E S S E T H:

WHEREAS, AMD Saxony Manufacturing GmbH, Dresden, registered in the Commercial
Register of the Dresden Country Court HRB 13186 ("AMD Saxonia"), a wholly-owned
Subsidiary of AMD Holding, which is, in turn, a wholly-owned Subsidiary of AMD
Inc., has been formed for the purpose of constructing, owning, and operating (i)
the Plant and (ii) the integrated Design Center;

WHEREAS, in order to finance the construction of the Plant and the Design
Center, and start-up costs of the operation of the Plant, inter alia, (i) AMD
Saxonia has entered into a Syndicated Loan Agreement, dated 11 March 1997, as
amended, (the "Loan Agreement") with the Agent, the Security Agent and the Banks
from time to time party thereto providing, inter alia, for a senior secured term
facility aggregating up to DM 1,500,000,000 (one billion five hundred million
Deutsche Marks), and (ii) the Sponsors, the Agent and the Security Agent have
entered into that certain Sponsors' Support Agreement dated 11 March 1997, as
amended, (the "Sponsors' Support Agreement") providing (x) certain assurances to
the Agent and Security Agent with respect to the completion of the Project, and
(y) certain undertakings to and for the benefit of the Secured Parties;

WHEREAS, AMD Saxonia, the Agent, the Security Agent and the Banks wish, with the
consent of the Sponsors to, among other things, amend the Loan Agreement, the
Sponsors' Support Agreement and the AMD Inc. Subordination Agreement;

WHEREAS, the Sponsors are willing to provide certain additional undertakings to
and for the benefit of the Secured Parties as provided in this Amendment and to
amend and supplement the AMD Inc. Subordination Agreement on the terms and
subject to the conditions of this Amendment;




NOW, THEREFORE, the Sponsors, the Agent (for itself and on behalf of the Banks),
and the Security Agent (on behalf of the Secured Parties), agree as follows:

                                    ARTICLE I
                                   Definitions

SECTION 1.1 Definitions. Capitalized terms not otherwise defined in this
Amendment are used with the definitions assigned to them in the Sponsors'
Support Agreement.

SECTION 1.2 Construction. In this Amendment, unless the context requires
otherwise, references to Sections and Schedules are to Sections and Schedules of
the AMD Inc. Subordination Agreement. Section headings are inserted for
reference only and shall be ignored in construing this Amendment.


                                   ARTICLE II
                                   Amendments

SECTION 2.1 Amendments. The AMD Inc. Subordination Agreement shall be amended
and restated in the form set out in Schedule 1 to this Amendment Agreement.


                                   ARTICLE III
                                  Miscellaneous

SECTION 3.1 Representations and Warranties. Each of the Sponsors hereby
represents and warrants that:

(a)  Organization; Corporate Power. It is duly incorporated and validly existing
     under the laws of the jurisdiction of its organization, and has all
     necessary power and authority to execute and deliver this Amendment and to
     consummate the transactions contemplated by the AMD Inc. Subordination
     Agreement, as amended hereby;

(b)  Corporate Authority; No Conflict. The execution and delivery by it of this
     Amendment, and the performance by it of its obligations under the AMD Inc.
     Subordination Agreement, as amended by this Amendment, have been duly
     authorized by all necessary corporate action (including any necessary
     shareholder action) on its part, and do not and will not (i) violate any
     provision of any law, rule, regulation, order, writ, judgment, injunction,
     decree, determination or award presently in effect having applicability to
     it, or of its charter or by-laws or (ii) result in a breach of, result in a
     mandatory prepayment or acceleration of indebtedness evidenced by or
     secured by, or constitute a default under, any indenture or loan or credit
     agreement, or any other agreement or instrument to which it is a party or
     by which it or its properties may be bound, or require the creation or
     imposition of any encumbrance of any nature upon or with respect to any of
     the properties now owned or hereafter acquired by it; and

(c)  Valid and Binding Obligations. The AMD Inc. Subordination Agreement, as
     amended by this Amendment, constitutes its legal, valid and binding
     obligation,

                                       2




     enforceable against it in accordance with its terms subject, however, to
     applicable bankruptcy, insolvency, reorganization, moratorium or similar
     laws affecting creditors' rights generally and, as to enforceability, by
     general equitable principles.

SECTION 3.2 Repetition of Representation and Warranties. The representations and
warranties contained in Sections 12.1 and 12.2 of the Sponsors' Support
Agreement shall be repeated on the date hereof except to the extent any such
representation and warranty expressly relates solely to an earlier date.

SECTION 3.3 Miscellaneous.

(a)  This Amendment is limited as specified and, except as expressly herein
     provided, shall not constitute a modification, amendment or waiver of any
     other provision of any other Operative Document. Except as specifically
     amended by this Amendment, the AMD Inc. Subordination Agreement shall
     remain in full force and effect and is hereby ratified and confirmed.

(b)  This Amendment shall be an Operative Document under and for purposes of the
     Sponsors' Support Agreement.

(c)  The form and execution of this Amendment and all rights and obligations of
     the parties arising hereunder shall be governed by the laws of the Federal
     Republic of Germany.

(d)  This Amendment has been executed in the English language.

(e)  This Amendment may be executed in any number of counterparts and all of
     such counterparts taken together shall be deemed to constitute one and the
     same instrument.

                  [Remainder of page intentionally left blank]

                                       3




IN WITNESS WHEREOF, each of the parties set out below has caused this Amendment
to be duly executed and delivered by its respective officer or agent thereunto
duly authorised as of the date first above written.


ADVANCED MICRO DEVICES, INC.

By /s/ Robert J. Rivet
   -------------------

Its Senior Vice President and Chief Financial Officer



AMD SAXONY HOLDING GMBH

By /s/ Thomas M. McCoy
   -------------------

Its Managing Director



DRESDNER BANK LUXEMBOURG S.A., as
Agent


/s/ Marcus Nelgen    /s/ Robert von Finckenstein
- ------------------------------------------------


DRESDNER BANK AG, as Security Agent


/s/ Marcus Nelgen    /s/ Robert von Finckenstein
- ------------------------------------------------


                                       4



                                   Schedule 1

              Amended and restated AMD Inc. Subordination Agreement



                                                           Amended and Restated

                        AMD INC. SUBORDINATION AGREEMENT

THIS AMD INC. SUBORDINATION AGREEMENT, dated 11 March 1997, as amended, is made
between ADVANCED MICRO DEVICES, INC., a corporation organised and existing under
the laws of the State of Delaware, United States of America, with its chief
executive office and principal place of business at One AMD Place, Sunnyvale,
California 94088, United States of America ("AMD Inc."), AMD SAXONY HOLDING
GMBH, Dresden, registered in the Commercial Register of the Dresden County Court
HRB 13931 ("AMD Holding"; and, together with AMD Inc., collectively, the
"Sponsors" together with AMD Inc., collectively, the "Sponsors"), and DRESDNER
BANK LUXEMBOURG S.A. ("Dresdner"), as Agent (in such capacity, the "Agent") for
the Banks under the Loan Agreement referred to below and DRESDNER BANK, as
Security Agent (in such capacity, the "Security Agent") for the Secured Parties
under such Loan Agreement.

WHEREAS, AMD Saxony Manufacturing GmbH, Dresden, registered in the Commercial
Register of the Dresden County Court HRB 13186 ("AMD Saxonia"), a wholly-owned
Subsidiary (such and other capitalised terms being used herein with the meanings
provided in Section 1.1), of AMD Holding, which is, in turn, a wholly-owned
Subsidiary of AMD Inc., has been formed for the purpose of constructing, owning,
and operating (i) the Plant and (ii) the integrated Design Center (the
construction, ownership, and operation of the Plant and the Design Center being
hereinafter called the "Project");

WHEREAS, in order to finance the construction of the Plant and the Design
Center, and start-up costs of the operation of the Plant, (i) the Sponsors
expect to make substantial subordinated loans to, and AMD Holding expects to
make substantial equity investments in, AMD Saxonia, and (ii) AMD Saxonia has
entered into a Syndicated Loan Agreement, dated 11 March 1997 (the "Loan
Agreement"), with the banks from time to time party thereto (hereinafter
collectively called the "Banks" and individually called a "Bank"), Dresdner, as
Paying Agent (in such capacity, the "Paying Agent"), providing, inter alia, for
a senior secured term facility aggregating up to DM 1,500,000,000 (one billion
five hundred million Deutsche Marks);

WHEREAS, the Sponsors desire that the Project be constructed and completed and
are entering into this Agreement with the Agent and the Security Agent for the
benefit of the Banks and the Paying Agent (hereinafter collectively called the
"Secured Parties" and individually called a "Secured Party"), for the purpose,
among other things, of providing (i) certain assurances with respect to the
completion of the Project, and (ii) certain undertakings to and for the benefit
of the Secured Parties; and

WHEREAS, a condition precedent to the initial Advance is, inter alia, the
execution by the Sponsors of this Agreement, and, in extending credit to AMD
Saxonia under the Loan Agreement, the Banks are relying on the undertakings of
the Sponsors contained herein;





NOW, THEREFORE, the Sponsors, the Agent (for itself and on behalf of and the
Banks), and the Security Agent (on behalf of the Secured Parties), agree as
follows:

SECTION 1. Definitions. Unless otherwise defined herein, terms used herein have
the meanings assigned to such terms in the Sponsors' Support Agreement. In
addition, the following terms (whether or not underlined) when used in this
Agreement, including its preamble and recitals, shall, except where the context
otherwise requires, have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof):

         "Agent" has the meaning assigned to such term in the introduction to
this Agreement.

         "Agreement" means this AMD Inc. Subordination Agreement, as the same
may at any time be amended or modified in accordance with the terms hereof and
in effect.

         "AMD Holding" has the meaning assigned to such term in the introduction
to this Agreement.

         "AMD Inc." has the meaning assigned to such term in the introduction to
this Agreement.

         "AMD Saxonia" has the meaning assigned to such term in the first
recital of this Agreement.

         "Bank" and "Banks" have the respective meanings assigned to such term
in the second recital of this Agreement.

         "Dresdner" has the meaning assigned to such term in the introduction to
this Agreement.

         "Junior Liabilities" means all obligations and liabilities of AMD
Holding to AMD Inc., howsoever created, arising, or evidenced, whether direct or
indirect, absolute or contingent or now or hereafter existing, or due or to
become due.

         "Loan Agreement" has the meaning assigned to such term in the second
recital of this Agreement.

         "Loan Agreement Termination Date" means the first date on or as of
which (i) all Primary Secured Obligations under the Loan Agreement have been
paid in full, and (ii) the Banks have no commitments under or in connection with
the Loan Agreement.

         "Paying Agent" has the meaning assigned to that term in the second
recital of this Agreement.

         "Project" has the meaning assigned to such term in the first recital to
this Agreement.

         "Security Agent" has the meaning assigned to such term in the
introduction to this Agreement.

         "Secured Parties" and "Secured Party" have the respective meanings
assigned to such terms in the third recital of this Agreement.


                                       2




         "Senior Liabilities" means all obligations and liabilities of AMD
Holding to the Agent, the Security Agent, the Paying Agent, any Bank, or either
Guarantor under or arising out of any Financing Document, howsoever created,
arising, or evidenced, whether direct or indirect, absolute or contingent or now
or hereafter existing, or due or to become due, it being expressly understood
and agreed that the term "Senior Liabilities" shall include, without limitation,
any and all interest accruing on any of the Senior Liabilities after the
commencement of any proceedings referred to in Section 4 hereof, notwithstanding
any provision or rule of law which might restrict the rights of the Security
Agent, as against AMD Holding or any other Person, to collect such interest.

         "Sponsors" has the meaning assigned to such term in the introduction to
this Agreement.

         "Sponsors' Support Agreement" means the Sponsors' Support Agreement, of
even date herewith, between the Sponsors, the Agent, and the Security Agent, as
the same may at any time be amended or modified in accordance with the terms
thereof and in effect.

         In this Agreement, unless the context requires otherwise, (i) any
reference to an Operative Document shall be to such Operative Document as the
same may have been or from time to time may be amended, varied, re-issued,
replaced, novated or supplemented, in each case, in accordance with the terms
thereof and hereof, and in effect; (ii) any statutory re-encacted, or replaced
from time to time; (iii) words importing a gender include every gender; and (iv)
references to Sections are to Sections of this Agreement. Section headings are
inserted for reference only and shall be ignored in construing this Agreement. A
time of day, unless otherwise specified, shall be construed as a refence to
Frankfurt am Main time.

SECTION 2. Obligations of AMD Inc.  AMD Inc. will, from time to time, promptly
notify the Security Agent of the creation of any Junior Liabilities pursuant to
the Sponsors' Loan Agreement.

SECTION 3. Subordination. Except as expressly provided in this Agreement, or as
the Agent (acting on the instructions of an Instructing Group) may hereafter
otherwise expressly consent in writing, the payment of all Junior Liabilities
shall be postponed and subordinated to the payment in full of all Senior
Liabilities, and no payments or other distributions whatsoever in respect of any
Junior Liabilities shall be made, nor shall any property or assets of AMD
Holding be applied to the purchase or other acquisition or retirement of any
Junior Liabilities; provided, however, that as long as no Event of Default nor
any Unmatured Event of Default nor with respect to AMD Inc. any event which is
of the type described in Section 11 (i) (e), (f), (g) or (h) of the AMD Inc.
1999 Loan and Security Agreement has occurred and is continuing, there are
excepted from the terms of the provisions of this Section 3:

      (i)  those payments to AMD Inc. made by AMD Holding pursuant to Article II
           of the Management Service Agreement or pursuant to Article IV of the
           AMD Holding Wafer Purchase Agreement, in either case without
           duplication and to the extent not paid by AMD Saxonia pursuant
           thereto;

      (ii) [intentionally left blank]; and



                                       3




     (iii) those payments to AMD Inc. made by AMD Holding in accordance with
           Section 6.3 of the Sponsors' Support Agreement;

     and provided, further, that there are excepted from the terms of the
     foregoing provisions of this Section 3:

     (i)   distributions in respect of the Junior Liablities to the extent such
           distributions constitute non cash credits expressly permitted to be
           made under the Management Service Agreement or the AMD Holding Wafer
           Purchase Agreement; and

     (ii)  performance by AMD Holding of its obligations (other than payment
           obligations, if any) under the AMD Holding Wafer Purchase Agreement,
           the AMD Holding Research Agreement, or the License Agreement.

     Moreover, if the AMD Holding Wafer Purchase Agreement or the Management
     Service Agreement terminates for any reason whatsoever, AMD Holding shall
     be entitled to credit the amounts payable thereunder against the amounts
     receivable by it thereunder strictly in accordance with the terms and
     provisions of each such Operative Document.

SECTION 4. Bankruptcy, Insolvency, etc. In the event of any dissolution, winding
up, liquidation, reorganization, or other similar proceedings relating to AMD
Holding or to its creditors, as such, or to its property (whether voluntary or
involuntary, partial or complete, and whether in bankruptcy, insolvency,
compromise proceedings (Vergleichsverfahren) or any other marshalling of the
assets and liabilities of AMD Holding, or any sale of all or substantially all
of the assets of AMD Holding, or otherwise), the Senior Liabilities shall first
be paid in full before AMD Inc. shall be entitled to receive and to retain any
payment or distribution in respect of the Junior Liabilities, and in order to
implement the foregoing, (a) AMD Inc. hereby irrevocably agrees that in such
event all payments and distributions of any kind or character in respect of the
Junior Liabilities to which AMD Inc. would be entitled if the Junior Liabilities
were not subordinated pursuant to this Agreement, shall be made directly to the
Security Agent; (b) upon the commencement and during the continuance of any
proceedings referred to in this Section 4, the Security Agent shall have the
right to require AMD Inc. to claim, enforce, prove, or vote in respect of the
Junior Liabilities in such manner as is directed by the Security Agent and is
permitted by applicable law, including, without limitation, to direct that all
payments and distributions of any kind or character in respect of the Junior
Liabilities to which AMD Inc. would be entitled if the Junior Liabilities were
not subordinated pursuant to this Agreement, shall be made directly to the
Security Agent; provided, that if the Security Agent shall not have required AMD
Inc. to claim, enforce, prove, or vote in respect of any of the Junior
Liabilities on or before the day which is 10 Business Days before a date on
which the failure to so claim, enforce, prove, or vote would invalidate or
otherwise materially adversely affect the rights of AMD Inc., AMD Inc. shall
have the right to claim, enforce, prove, or vote in respect of such Junior
Liabilities in AMD Inc.'s sole discretion; and (c) AMD Inc. hereby irrevocably
agrees that, for purposes hereof, the Security Agent may, at its sole discretion
for purposes hereof, in the name of AMD Inc. or otherwise, demand, sue for,
collect, receive, and receipt for any and all such payments or distributions,
and file, prove, and vote, or consent in any such proceedings with respect to,
any and all claims of AMD Inc. relating to the Junior Liabilities.



                                       4




SECTION 5. Payments Not to be commingled. In the event that AMD Inc. receives
any payment or other distribution of any kind or character from AMD Holding or
from any other source whatsoever in respect of any of the Junior Liabilities,
other than as expressly permitted by the terms of this Agreement, such payment
or other distribution shall not be commingled with other assets of AMD Inc. and
shall be promptly turned over by AMD Inc. to the Security Agent. AMD Inc. will
mark its books and records, and cause AMD Holding to mark its books and records,
as to clearly indicate that the Junior Liabilities are subordinated in
accordance with the terms of this Agreement, and will cause to be clearly
inserted in any instrument which at any time evidences any of the Junior
Liabilities a statement to the effect that the payment thereof is subordinated
in accordance with the terms of this Agreement. AMD Inc. will execute such
further documents or instruments and take such further action as the Security
Agent may reasonably request from time to time to carry out the intent of this
Agreement.

SECTION 6. Application of Payments; No Subrogation. All payments and
distributions received by the Security Agent in respect of the Junior
Liabilities in accordance with the terms thereof, to the extent received in or
converted into cash, may be applied by the Security Agent first to the payment
of any and all expenses (including reasonable attorneys' fees and legal
expenses) paid or incurred by the Security Agent in enforcing this Agreement or
in endeavouring to collect or realize upon any of the Junior Liabilities or any
security therefor in accordance with the terms hereof, and any balance thereof
shall, solely as between AMD Inc. and the Security Agent, be applied by the
Security Agent, in the manner provided by the Loan Agreement, toward the payment
of the Senior Liabilities remaining unpaid; but, as between AMD Holding and its
creditors, no such payments or distributions of any kind or character shall be
deemed to be payments or distributions in respect of the Senior Liabilities;
and, notwithstanding any such payments or distributions received by the Security
Agent in respect of the Junior Liabilities and so applied by the Security Agent
toward the payment of the Senior Liabilities, AMD Inc. shall be subrogated to
the then-existing rights of the Agent, the Security Agent, and the Banks, if
any, in respect of the Senior Liabilities only at such time as the Agent, the
Security Agent, and the Banks, shall have received payment of the full amount of
the Senior Liabilities, as provided for in Section 9, or (ii) this Agreement
shall terminate pursuant to Section 15. Each Secured Party shall, at AMD Inc.'s
request and expense made after such time, execute and deliver to AMD Inc.
appropriate documents (without recourse or warranty whatsoever) to evidence the
transfer by subrogation to AMD Inc. of an interest in the Senior Liabilities
resulting from the application of payments in the manner contemplated by this
Section 6. The obligations of the Secured Parties under the preceding sentence
shall survive any termination of this Agreement.

SECTION 7. Waivers by AMD Inc.  AMD Inc. hereby waives: (a) notice of acceptance
by the Agent, the Security Agent, or any Bank, of this Agreement; (b) notice of
the existence or creation or non-payment of all or any of the Senior
Liabilities; and (c) all diligence in collection or protection of or realization
upon the Senior Liabilities or any thereof or any security therefor.

SECTION 8. Obligations of AMD Inc. AMD Inc. will not, without the prior written
consent of the Security Agent: (a) transfer or assign, or attempt to enforce or
collect, any Junior Liabilities or any rights in respect thereof except as
expressly permitted to be paid pursuant to Section 3 above; provided, that
nothing in this Agreement shall be deemed to prevent AMD Inc. from seeking
damages, equitable relief, or otherwise enforcing any rights it may have against
AMD Holding arising out of (x) any tort or infringement of AMD Inc. tangible or


                                       5




intangible property rights (including without limitation rights under applicable
patent, copyright and trade secret laws and similar principles) to the extent,
but only to the extent, such tort or infringement arises after the date of
termination of the AMD Holding Wafer Purchase Agreement or (y) any breach by AMD
Holding of its obligations under the License Agreement to the extent, but only
to the extent, that such breach arises after the date of termination of the AMD
Holding Wafer Purchase Agreement; (b) take any collateral security for any
Junior Liabilities or (c) commence, or join with any other creditor commencing,
any bankruptcy, reorganisation, or insolvency proceedings with respect to AMD
Holding. Nothing in this Agreement shall prevent AMD Inc. from forgiving all or
any portion of the Junior Liabilities or from converting all or any portion of
such Junior Liabilities into, or exchanging such Junior Liabilities for, equity
of AMD Holding, and any such equity shall not be deemed to be a distribution or
payment on such Junior Liabilities for purposes of this Agreement.

SECTION 9.  Continuing Subordination. This Agreement shall in all respects be a
continuing agreement and shall remain in full force and effect (notwithstanding,
without limitation, the dissolution of AMD Inc. or that at any time or from time
to time all Senior Liabilities may have been paid in full), but shall
automatically terminate on the Loan Agreement Termination Date.

SECTION 10. Rights of the Agent, the Security Agent, and the Banks. The Agent,
the Security Agent, and each Bank may, from time to time, at its sole discretion
and without notice to AMD Inc., take any or all of the following actions without
affecting its or their rights under this Agreement: (a) retain or obtain a
security interest in any property of any Person to secure any of the Senior
Liabilities; (b) retain or obtain the primary or secondary obligations of any
other obligor or obligors with respect to any of the Senior Liabilities; (c)
extend or renew for one or more periods (whether or not longer than the original
period), alter or exchange any of the Senior Liabilities, or release or
compromise any obligation of any nature of any obligor with respect to any of
the Senior Liabilities; (d) compromise, settle, release, renew, extend, indulge,
amend, change, waive, modify, or supplement in any respect any of the terms or
conditions of any of the Operative Documents; and (e) release its lien on or
security interest in, or surrender, release, or permit any substitution or
exchange for, all or any part of any property securing any of the Senior
Liabilities, or extend or renew for one or more periods (whether or not longer
than the original period) or release, compromise, alter, or exchange any
obligations of any nature of any obligor with respect to any such property.

SECTION 11. Transfer of Obligations; Enforcement. The Security Agent, the Agent,
or any Bank may, from time to time, without notice to AMD Inc., but subject
however, to the provisions of Section 26 of the Loan Agreement, assign or
transfer any or all of the Senior Liabilities or any interest therein; and,
notwithstanding any such assignment or transfer or any subsequent assignment or
transfer thereof, such Senior Liabilities shall be and remain Senior Liabilities
for purposes of this Agreement, and every immediate and successive assignee or
transferee of any of the Senior Liabilities or of any interest therein, shall,
to the extent of the interest of any such assignee or transferee in the Senior
Liabilities, be entitled to the benefits of this Agreement to the same extent as
if such assignee or transferee were the transferor. The rights of the Secured
Parties hereunder shall be exercisable solely by the Security Agent on behalf of
the Secured Parties, unless either the Security Agent is not able pursuant to
applicable law to realize the practical benefits of such rights on behalf of the
Secured Parties or the limitations set forth in this sentence would otherwise
materially adversely affect the rights of the Secured Parties hereunder.

                                       6




SECTION 12. Additional Provisions. None of the Agent, the Security Agent, or the
Banks shall be prejudiced in its rights under this Agreement by any act or
failure to act of any of AMD Holding or AMD Inc., or any noncompliance of AMD
Holding or AMD Inc. with any agreement or obligation, regardless of any
knowledge thereof which the Agent, the Security Agent, or such Bank may have or
with which the Agent, the Security Agent, or such Bank may be charged; and no
action of the Agent, the Security Agent, or any Bank permitted hereunder shall
in any way affect or impair the rights of the Agent, the Security Agent, or any
Bank, and the obligations of AMD Inc., under this Agreement. For the purposes of
this subordination, Senior Liabilities shall include all obligations of AMD
Holding under or in connection with any of the Operative Documents to the Agent,
the Security Agent, and each Bank, notwithstanding any right or power of any AMD
Holding or anyone else to assert any claim or defence as to the invalidity or
unenforceability of any such obligation, and no such claim or defence shall
affect or impair the agreements and obligations of AMD Inc. hereunder; provided,
however, that Senior Liabilities shall not include any obligations or
liabilities of AMD Holding which a court of competent jurisdiction shall have
determined (which determination shall be final and unappealable) are invalid or
unenforceable.

SECTION 13. Cumulative Remedies; Modifications in Writing. The remedies provided
for herein are cumulative and are not exclusive of any remedies that may be
available to the Agent or the Security Agent at law, in equity, or otherwise. No
amendment, modification, supplement, termination, or waiver of or to any
provision of this Agreement, or consent to any departure by AMD Inc. or AMD
Holding therefrom, shall be effective unless the same shall be in writing and
signed by or on behalf of the Agent and the Security Agent.

SECTION 14. Severability of Provisions. In case any provision of this Agreement
is invalid or unenforceable, the validity or enforceability of the remaining
provisions hereof shall remain unaffected. The parties hereto shall have an
obligation to replace any invalid provision by a valid provision which
approximates best the economic purpose of the invalid provision.

SECTION 15. Termination. This Agreement and the obligations of the parties
hereunder shall terminate on the Loan Agreement Termination Date; provided, that
such obligations shall automatically revive and be reinstated if and to the
extent that AMD Holding shall subsequently have obligations to any of the
Secured Parties under or arising out of any of the Financing Documents.

SECTION 16. Assignment. This Agreement shall be binding upon and shall inure to
the benefit of each party hereto and their respective successors and assigns;
provided, however, that the Security Agent, the Agent, and the Banks may
transfer their rights under this Agreement, subject, however, to the provisions
of Section 26 of the Loan Agreement; provided, further, that neither AMD Inc.
nor AMD Holding shall have the right to transfer or assign its rights under this
Agreement without the prior written consent of the Agent and the Security Agent;
and provided, further, that AMD Holding may assign this Agreement to the
Security Agent as security for the obligations of AMD Holding under the Loan
Agreement and the other Operative Documents. Notwithstanding any such assignment
or transfer or any subsequent assignment or transfer thereof, Senior Liabilities
shall be and remain Senior Liabilities for the purposes of this Agreement, and
every immediate and successive assignee or transferee of any of the Senior
Liabilities or of any interest therein shall, to the extent of the interest of
such assignee or transferee in the Senior Liabilities, be entitled to the
benefits

                                       7




of this Agreement to the same extent as if such assignee or transferee were the
transferor, subject, however, to the provisions of Section 11; provided,
however, that, in addition to its rights under Section 11, unless the Security
Agent (acting on the instructions of an Instructing Group) shall otherwise
consent in writing, the Security Agent shall have an unimpaired right, prior and
superior to that of any such assignee or transferee, to enforce this Agreement
for the benefit of the Secured Parties as to those of the Senior Liabilities
which have not been so assigned or transferred.

SECTION 17. Notice. All notices, demands, instructions, and other communications
required or permitted to be given to or made upon any party hereto shall be in
writing and shall be personally delivered or sent by registered or certified
mail, postage pre-paid, return receipt requested, or by pre-paid telex, TWX, or
telegram, or by pre-paid courier service, or by telecopier, and shall be deemed
to be given for purposes of this Agreement on the day that such writing is
delivered or sent to the intended recipient thereof in accordance with the
provisions of this Section 17. Unless otherwise specified in a notice sent or
delivered in accordance with the foregoing provisions of this Section 17,
notices, demands, instructions, and other communications in writing shall be
given to or made upon the respective parties hereto at their respective
addresses (or to their respective telex, TWX or telecopier numbers) indicated
below.

To the Security Agent:

Dresdner Bank AG, as Security Agent
Ostra Allee 9
01067 Dresden
Attention: Betreuung Unternehmenskunden
Facsimile No.: (49) 351 489-1300

To the Agent:

Dresdner Bank Luxembourg S.A., as Agent
26, rue du Marche-aux-Herbes
L-2097 Luxembourg
Attention: Direktion
Facsimile No.: (352) 4760-824

To AMD Inc.:

Advanced Micro Devices, Inc.
One AMD Place
Sunnyvale, California  94088
Attention: General Counsel
Facsimile No.: (1) (408)774 7399





                                       8




To AMD Holding:

AMD Saxony Holding GmbH
Wilschdorfer Landstrasse 101
01109 Dresden
Attention: Geschaftsfuhrer
Facsimile No.: (49) 351 277 91300

SECTION 18. Relationship to Other Agreements. The rights of the Agent and the
Security Agent pursuant to this Agreement are in addition to any other rights or
remedies which the Agent and the Security Agent may have under statutory law or
other agreements between one or more of the Agent, the Security Agent, the
Banks, AMD Inc., and AMD Holding. Where such rights and remedies are in conflict
with the provision of this Agreement, the provision of this Agreement shall
prevail.

SECTION 19. Governing Law.  The form and execution of this Agreement and all
rights and obligations of the parties arising hereunder shall be governed by the
Laws of the Federal Republic of Germany.

SECTION 20. Jurisdiction.  AMD Inc. and AMD Holding hereby submit to the
exclusive jurisdiction of the courts in Frankfurt am Main for any dispute
arising out of or in connection with this Agreement. AMD Inc. states that
Advanced Micro Devices GmbH, Rosenheimerstrasse 143b, 81671 Munich, Germany,
Tel.: +49 89 450 530, Fax: +49 89 906 490, is its accredited agent for service
of process and hereby undertakes to maintain an agent for service in Germany.
The foregoing submission to jurisdiction shall not (and shall not be construed
so as to) limit the rights of the Agent or the Security Agent to take suits,
actions, or proceedings against a Sponsor to enforce any judgment rendered by
the courts in Frankfurt am Main in any other court or entity of competent
jurisdiction where such Sponsor has assets, nor shall the taking of suits,
actions, or proceedings to enforce any such judgment in one or more
jurisdictions preclude the taking of enforcement proceedings in any other
jurisdiction, whether concurrently or not.

SECTION 21. Use of English Language. This Agreement has been executed in the
English language. All certificates, reports, notices, and other documents and
communications given or delivered pursuant to this Agreement shall be in the
English language and, if reasonably requested by the Agent, a certified German
translation thereof shall be furnished promptly thereafter. In the event of any
inconsistency, the English language version of any such document shall control.

SECTION 22. Operative Document.  This Agreement is an Operative Document
executed pursuant to the Loan Agreement.

IN WITNESS WHEREOF, each of the parties set out below has caused this Agreement
to be duly executed and delivered by its respective officer or agent thereunto
duly authorised as of the date first above written.




                                       9




                                   ADVANCED MICRO DEVICES, INC.

                                   By___________________________________________

                                   Its__________________________________________


                                   AMD SAXONY HOLDING GMBH

                                   _____________________________________________


                                   DRESDNER BANK AG, as Agent and Security Agent

                                   _____________________________________________

                                       10

EX-10.43(O-2)

                                                              Exhibit 10.43(o-2)

                   ACCESSION AGREEMENT AND SECOND AMENDMENT TO
                        AMD INC. SUBORDINATION AGREEMENT

          THIS ACCESSION AGREEMENT AND SECOND AMENDMENT (this "Amendment"),
dated 3 June 2002, is made among ADVANCED MICRO DEVICES, INC., a corporation
organised and existing under the laws of the State of Delaware, United States of
America, with its chief executive office and principal place of business at One
AMD Place, Sunnyvale, California 94088, United States of America ("AMD Inc.");
AMD SAXONY HOLDING GMBH, Dresden, registered in the Commercial Register of the
Dresden County Court, HRB 13931 ("AMD Holding," together with AMD Inc.,
collectively, the "Sponsors"); AMD SAXONY LLC, a limited liability company
organised and existing under the laws of the State of Delaware, United States of
America ("AMD Saxony LLC"); AMD SAXONY ADMIN GMBH, with its seat in Dresden
("AMD Admin," together with AMD Saxony LLC, collectively, the "Additional
Partner Companies"); DRESDNER BANK LUXEMBOURG S.A., as Agent (and successor to
DRESDNER BANK AG ("Dresdner") in such capacity) under the Loan Agreement dated
11 March 1997, as amended (as so amended, the "Loan Agreement") (in such
capacity, the "Agent") for the Banks from time to time party thereto; and
Dresdner, as Security Agent under such Loan Agreement (in such capacity, the
"Security Agent") for the Secured Parties referred to therein.

                              W I T N E S S E T H:

          WHEREAS, AMD Saxony Manufacturing GmbH, Dresden (proposed to be known
as "AMD Saxony LLC & Co. KG" following the Conversion Effective Date),
registered in the Commercial Register of the Dresden Country Court ("AMD
Saxonia"), has been formed for the purpose of constructing, owning and operating
(i) the Plant and (ii) the integrated Design Center (the construction, ownership
and operation of the Plant and the Design Center hereinafter called the
"Project");

          WHEREAS, pursuant to the Conversion Documents, AMD Saxonia proposes to
change its legal form to a Kommanditgesellschaft (a limited partnership
organised under the laws of the Federal Republic of Germany) with AMD Holding
and AMD Admin as its sole limited partners (Kommanditisten) and AMD Saxony LLC
as its sole general partner (Komplementar);

          WHEREAS, with effect from the Conversion Effective Date, AMD Saxonia
wishes, with the consent of the Sponsors and Additional Partner Companies to,
among other things, modify the interest rate on Sponsors' Loans and Revolving
Loans and to increase the amount of the Revolving Loan Facility; and

          WHEREAS, with effect from the Conversion Effective Date, the
Additional Partner Companies desire to accede to, and the Sponsors, the
Additional Partner Companies, the Agent and the Security Agent desire to amend
and supplement, the AMD Inc. Subordination Agreement dated 11 March 1997 by and
among AMD Inc., AMD Holding, Dresdner Bank AG, as Security Agent, and Dresdner
Bank Luxembourg S.A., as Agent, as amended by the First Amendment to the AMD
Inc. Subordination Agreement dated 20 February, 2001 (as amended,



the "AMD Inc. Subordination Agreement"), on the terms and subject to the
conditions of this Amendment;

          NOW, THEREFORE, the Sponsors, the Additional Partner Companies, the
Agent (for itself and on behalf of the Banks), and the Security Agent (on behalf
of the Secured Parties), agree as follows:

                                   ARTICLE I
                                    Accession

Section 1.1  With effect from the Conversion Effective Date, the Additional
Partner Companies hereby accede to the AMD Inc. Subordination Agreement, and the
Sponsors, the Agent and the Security Agent hereby consent to such accession.

                                   ARTICLE II
                                   Definitions

Section 2.1  Definitions. Capitalized terms not otherwise defined in this
Amendment are used with the definitions assigned to them in the AMD Inc.
Subordination Agreement or the Sponsor's Support Agreement, as the case may be.

          In addition, the following terms when used in this Amendment shall
have the following meaning:

          "Agreed Terms" means, in respect of any document, that document
substantially in the form thereof which has been initialed (for the purposes of
identification) by or on behalf of AMD Saxonia and the Agent.

          "Conversion Documents" means the following agreements and documents,
each in the Agreed Terms: (i) the Certificate of Formation of AMD Saxony LLC;
(ii) the AMD Admin Articles of Association; (iii) the Formation Protocol for AMD
Admin; (iv) the Application to the Commercial Register for Formation of AMD
Admin; (v) the Resolution of AMD Holding as Shareholder of AMD Admin for Section
181 German Civil Code Release; (vi) the List of Shareholders for AMD Admin;
(vii) the AMD Saxony LLC Agreement; (viii) the AMD Saxonia Partnership
Agreement; (ix) the Assignment and Trust Agreement between AMD Holding and AMD
Saxony LLC; (x) the Purchase and Assignment Agreement between AMD Holding and
AMD Admin; (xi) the Resolution of AMD Holding as Shareholder of AMD Saxonia for
Transfer of Fractional Share to AMD Saxony LLC; (xii) the Notification to AMD
Saxonia of Assignment of Fractional Share to AMD Admin; (xiii) the List of
Shareholders of AMD Saxonia (reflecting addition of AMD Admin); (xiv) the
Resolution of AMD Holding and AMD Saxony LLC as Shareholders of AMD Saxonia for
Transfer of Fractional Share to AMD Admin; (xv) the Notification to AMD Saxonia
of Assignment of Fractional Share to AMD Saxony LLC; (xvi) the List of
Shareholders of AMD Saxonia (reflecting addition of AMD Saxony LLC); (xvii) the
Resolution of AMD Holding, AMD Admin and AMD Saxony LLC as Shareholders of AMD
Saxonia Approving Conversion to Limited Partnership; (xviii) the Resolution of
AMD Inc. as Shareholder of AMD Holding Approving Conversion of AMD Saxonia;
(xix) Application to the Commercial Register for Conversion of AMD Saxonia to
Limited Partnership; (xx) Application to the Real Estate Register for Change in
AMD Saxonia's

                                       2



Name; (xxi) the Transfer Agreement for Transfer Back Of Fractional Share between
AMD Holding and AMD Saxony LLC; (xxii) Application to the Commercial Register
for Transfer Back of Fractional Share by AMD Saxony LLC to AMD Holding; (xxiii)
Power of Attorney regarding Removal of AMD Saxony LLC as General Partner of AMD
Saxonia; and (xxiv) any other agreement or document designated by the AMD
Companies (with the consent of the Agent) in addition to or in substitution for
any of the above-named documents or agreements as a "Conversion Document."

          "Sponsors' Support Agreement" means the Sponsors' Support Agreement
between the Sponsors, the Additional Partner Companies, the Agent and the
Security Agent dated 11 March 1997, as amended by the First Amendment to
Sponsors' Support Agreement dated 6 February 1998, the Second Amendment to
Sponsors' Support Agreement dated 29 June 1999, the Third Amendment to Sponsors'
Support Agreement dated 20 February 2001 and the Accession Agreement and Fourth
Amendment to Sponsors' Support Agreement dated of even date herewith, and as the
same may at any time be amended or modified in accordance with the terms thereof
and in effect.

Section 2.2 Construction. In this Amendment, unless the context requires
otherwise, references to Sections and Schedules are to Sections and Schedules of
the AMD Inc. Subordination Agreement. Section headings are inserted for
reference only and shall be ignored in construing this Amendment.

                                  ARTICLE III
                                   Amendments

Section 3.1 With effect from the Conversion Effective Date, the AMD Inc.
Subordination Agreement will be amended and restated in its entirety in the form
attached as Appendix A.

                                   ARTICLE IV
                                  Miscellaneous

Section 4.1 Representations and Warranties. Each of the Sponsors and Additional
Partner Companies hereby represents and warrants, as of the date hereof and as
of the Conversion Effective Date, that:

(i)  Organisation; Corporate Power. It is duly incorporated and validly
existing under the laws of the jurisdiction of its organisation, and has all
necessary power and authority to execute and deliver this Amendment and,
following the Conversion Effective Date, to consummate the transactions
contemplated by the AMD Inc. Subordination Agreement, as amended hereby;

(ii) Corporate Authority; No Conflict. The execution and delivery by it of this
Amendment, and the performance by it, following the Conversion Effective Date,
of its obligations under the AMD Inc. Subordination Agreement, as amended by
this Amendment, have been duly authorised by all necessary corporate action
(including any necessary shareholder action) on its part, and do not and will
not (i) violate any provision of any law, rule, regulation, order, writ,
judgment, injunction, decree, determination, or award presently in effect having
applicability to it, or of its charter or by-laws; or (ii) result in a breach
of, result in a mandatory prepayment or acceleration of indebtedness evidenced
by or secured by, or constitute a default under, any

                                       3



indenture or loan or credit agreement, or any other agreement or instrument to
which it is a party or by which it or its properties may be bound, or require
the creation or imposition of any encumbrance of any nature upon or with respect
to any of the properties now owned or hereafter acquired by it; and

(iii) Valid and Binding Obligations. Following the Conversion Effective Date,
the AMD Inc. Subordination Agreement, as amended by this Amendment, shall
constitute its legal, valid and binding obligation, enforceable against it in
accordance with its terms; subject, however, to applicable bankruptcy,
insolvency, reorganisation, moratorium, or similar laws affecting creditors'
rights generally and, as to enforceability, by general equitable principles.

Section 4.2       Miscellaneous.

(i)   This Amendment is limited as specified and, except as expressly herein
provided, shall not constitute a modification, amendment or waiver of any other
provision of the AMD Inc. Subordination Agreement or any provision of any other
Operative Document. Except as specifically amended by this Amendment, the AMD
Inc. Subordination Agreement shall remain in full force and effect and is hereby
ratified and confirmed.

(ii)  This Amendment shall be an Operative Document under and for purposes of
the Sponsors' Support Agreement.

(iii) This Amendment has been executed in the English language.

(iv)  This Amendment may be executed in any number of counterparts and by
different parties on separate counterparts which when taken together shall
constitute one agreement.

(v)   Sections 19, 20, and 21 of the AMD Inc.  Subordination  Agreement shall
apply, mutatis mutandis, to this Amendment,  as if set out herein in full.

                [Remainder of this page intentionally left blank]

                                       4



                  IN WITNESS WHEREOF, each of the parties set out below has
caused this Amendment to be duly executed and delivered by its respective
officer or agent thereunto duly authorised as of the date first above written.

                                     ADVANCED MICRO DEVICES, INC.

                                     By: /s/ Robert J. Rivet
                                        ----------------------------------------
                                     Its Senior Vice President and Chief
                                        ----------------------------------------
                                         Financial Officer
                                        ----------------------------------------

                                     AMD SAXONY HOLDING GMBH

                                     By: /s/ Hans-Raimund Deppe
                                        ----------------------------------------
                                     Dr. Hans-Raimund Deppe
                                     Its Managing Director (Geschaftsfuhrer)


                                     AMD SAXONY LLC

                                     By: /s/ Hans-Raimund Deppe
                                        ----------------------------------------
                                     Dr. Hans-Raimund Deppe
                                     Its Manager

                                     AMD SAXONY ADMIN GMBH

                                     By: /s/ Hans-Raimund Deppe
                                        ----------------------------------------
                                     Dr. Hans-Raimund Deppe
                                     Its Managing Director (Geschaftsfuhrer)


                                     DRESDNER BANK LUXEMBOURG S.A.
                                     as Agent

                                     By: /s/ Prellwitz
                                        ----------------------------------------
                                     Its Signatory under power of attorney
                                        ----------------------------------------


                                     DRESDNER BANK AG
                                     as Security Agent

                                     By: /s/ Prellwitz
                                        ----------------------------------------
                                     Its Signatory under power of attorney
                                        ----------------------------------------






                   [Signature page to the Accession Agreement
            and Second Amendment to AMD Inc. Subordination Agreement]

                                       5



                                   APPENDIX A
                              AMENDED AND RESTATED
                        AMD INC. SUBORDINATION AGREEMENT

                                      A-1




                                                            Amended and Restated

                        AMD INC. SUBORDINATION AGREEMENT

THIS AMD INC. SUBORDINATION AGREEMENT, dated 11 March 1997, as amended, is made
between ADVANCED MICRO DEVICES, INC., a corporation organised and existing under
the laws of the State of Delaware, United States of America, with its chief
executive office and principal place of business at One AMD Place, Sunnyvale,
California 94088, United States of America ("AMD Inc."); AMD SAXONY HOLDING
GMBH, Dresden, registered in the Commercial Register of the Dresden County Court
HRB 13931 ("AMD Holding"; and, together with AMD Inc., collectively, the
"Sponsors"); AMD SAXONY LLC, a limited liability company organised and existing
under the laws of the State of Delaware, United States of America ("AMD Saxony
LLC"); AMD SAXONY ADMIN GMBH, with its seat in Dresden ("AMD Admin" and together
with AMD Saxony LLC, collectively, the "Additional Partner Companies"); DRESDNER
BANK LUXEMBOURG S.A., as Agent (and successor to DRESDNER BANK AG ("Dresdner")
in such capacity) under the Loan Agreement referred to below (in such capacity,
the "Agent") and DRESDNER, as Security Agent under such Loan Agreement (in such
capacity, the "Security Agent") for the Secured Parties referred to below.

                              W I T N E S S E T H:
                              - - - - - - - - - -

WHEREAS, AMD Saxony Manufacturing GmbH, registered in the Commercial Register of
the Dresden County Court (proposed to be known as "AMD Saxony LLC & Co KG"
following the Conversion Effective Date) ("AMD Saxonia"), has been formed for
the purpose of constructing, owning, and operating (i) the Plant and (ii) the
integrated Design Center (the construction, ownership, and operation of the
Plant and the Design Center being hereinafter called the "Project");

WHEREAS, in order to finance the construction of the Plant and the Design
Center, and start-up costs of the operation of the Plant, (i) the Sponsors have
made substantial subordinated loans to, and AMD Holding has made substantial
equity investments in, AMD Saxonia, and (ii) AMD Saxonia has entered into a
Syndicated Loan Agreement, dated 11 March 1997, as amended (the "Loan
Agreement"), with the banks from time to time party thereto (hereinafter
collectively called the "Banks" and individually called a "Bank"), Dresdner, as
Paying Agent (in such capacity, the "Paying Agent"), providing, inter alia, for
a senior secured term facility aggregating up to DM 1,500,000,000 (one billion
five hundred million Deutsche Marks);

WHEREAS, pursuant to the Conversion Documents, AMD Saxonia has changed its legal
form to a Kommanditgesellschaft (a limited partnership organised under the laws
of the Federal Republic of Germany) with AMD Holding and AMD Admin as its sole
limited partners (Kommanditisten) and AMD Saxony LLC as its sole general partner
(Komplementar);

WHEREAS, the Sponsors and Additional Partner Companies are entering this
Agreement with the Agent and the Security Agent for the benefit of the Banks and
the Paying Agent (hereinafter collectively called the "Secured Parties" and
individually called a "Secured Party"), for the purpose, among other things, of
providing (i) certain assurances with respect to the completion of the Project,
and (ii) certain undertakings to and for the benefit of the Secured Parties; and

WHEREAS, in extending or continuing to extend credit to AMD Saxonia under the
Loan Agreement, the Banks are relying on the undertakings of the Sponsors and
Additional Partner Companies contained herein;



NOW, THEREFORE, the Sponsors, the Additional Partner Companies, the Agent (for
itself and on behalf of and the Banks), and the Security Agent (on behalf of the
Secured Parties), agree as follows:

SECTION 1. Definitions. Unless otherwise defined herein, terms used herein have
the meanings assigned to such terms in the Sponsors' Support Agreement. In
addition, the following terms (whether or not underlined) when used in this
Agreement, including its preamble and recitals, shall, except where the context
otherwise requires, have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof):

         "Additional Partner Companies" has the meaning assigned to such term in
the introduction to this Agreement.

         "Agent" has the meaning assigned to such term in the introduction to
this Agreement.

         "Agreement" means this AMD Inc. Subordination Agreement, as the same
may at any time be amended or modified in accordance with the terms hereof and
in effect.

         "AMD Admin" has the meaning assigned to such term in the introduction
to this Agreement.

         "AMD Holding" has the meaning assigned to such term in the introduction
to this Agreement.

         "AMD Inc." has the meaning assigned to such term in the introduction to
this Agreement.

         "AMD Saxonia" has the meaning assigned to such term in the first
recital of this Agreement.

         "AMD Saxony LLC" has the meaning assigned to such term in the
introduction to this Agreement.

         "Bank" and "Banks" have the respective meanings assigned to such term
in the second recital of this Agreement.

         "Dresdner" has the meaning assigned to such term in the introduction to
this Agreement.

         "Junior Liabilities" means all obligations and liabilities of AMD
Holding and the Additional Partner Companies to AMD Inc., howsoever created,
arising, or evidenced, whether direct or indirect, absolute or contingent or now
or hereafter existing, or due or to become due.

         "Loan Agreement" has the meaning assigned to such term in the second
recital of this Agreement.

         "Loan Agreement Termination Date" means the first date on or as of
which (i) all Primary Secured Obligations under the Loan Agreement have been
paid in full, and (ii) the Banks have no commitments under or in connection with
the Loan Agreement.

         "Paying Agent" has the meaning assigned to that term in the second
recital of this Agreement.

         "Project" has the meaning assigned to such term in the first recital to
this Agreement.

         "Security Agent" has the meaning assigned to such term in the
introduction to this Agreement.

         "Secured Parties" and "Secured Party" have the respective meanings
assigned to such terms in the fourth recital of this Agreement.

                                       2



         "Senior Liabilities" means all obligations and liabilities of AMD
Holding or any Additional Partner Company to the Agent, the Security Agent, any
Bank, the Paying Agent, or either Guarantor under or arising out of any
Financing Document, howsoever created, arising, or evidenced, whether direct or
indirect, absolute or contingent or now or hereafter existing, or due or to
become due, it being expressly understood and agreed that the term "Senior
Liabilities" shall include, without limitation, any and all interest accruing on
any of the Senior Liabilities after the commencement of any proceedings referred
to in Section 4 hereof, notwithstanding any provision or rule of law which might
restrict the rights of the Security Agent, as against AMD Holding, any
Additional Partner Company, or any other Person, to collect such interest.

         "Sponsors" has the meaning assigned to such term in the introduction to
this Agreement.

         "Sponsors' Support Agreement" means the Sponsors' Support Agreement
between the Sponsors, the Additional Partner Companies, the Agent and the
Security Agent dated 11 March 1997, as amended by the First Amendment to
Sponsors' Support Agreement dated 6 February 1998, the Second Amendment to
Sponsors' Support Agreement dated 29 June 1999, the Third Amendment to Sponsors'
Support Agreement dated 20 February 2001 and the Accession Agreement and Fourth
Amendment to Sponsors' Support Agreement dated of even date herewith, and as the
same may at any time be amended or modified in accordance with the terms thereof
and in effect.

In this Agreement, unless the context requires otherwise, any reference to an
Operative Document or a Project Agreement (including, in each case, any
reference thereto as being in the form set out in a Schedule to the Loan
Agreement) shall be a reference to such Document or Agreement as it shall have
been, or from time to time be, amended, varied, re-issued, replaced, novated or
supplemented, in each case, in accordance with its terms and this Agreement. For
the avoidance of doubt, any reference in the Agreement to stated capital
(Stammkapital), capital reserves or any other similar term relating to the
capital structure of a German limited liability company shall, following the
Conversion Effective Date (as defined in the Sponsors' Support Agreement), be
deemed to be a reference to the capital (Haftsummen and Pflichteinlagen) or
capital reserves of a limited partnership under German law, save to the extent
the context requires otherwise.

In this Agreement, unless the context requires otherwise, (i) any statutory
provisions shall be construed as references to those provisions as amended,
modified, re-enacted, or replaced from time to time; (ii) words importing a
gender include every gender; (iii) references to Sections and Schedules are to
Sections of and Schedules to this Agreement; and (iv) references to this
Agreement include its Schedules. Section headings are inserted for reference
only and shall be ignored in construing this Agreement. A time of day, unless
otherwise specified, shall be construed as a reference to Frankfurt am Main
time.

SECTION 2. Obligations of AMD Inc. AMD Inc. will, from time to time, promptly
notify the Security Agent of the creation of any Junior Liabilities pursuant to
the Sponsors' Loan Agreement.

SECTION 3. Subordination. Except as expressly provided in this Agreement, or as
the Agent (acting on the instructions of an Instructing Group) may hereafter
otherwise expressly consent in writing, the payment of all Junior Liabilities
shall be postponed and subordinated to the payment in full of all Senior
Liabilities, and no payments or other distributions whatsoever in respect of any
Junior Liabilities shall be made, nor shall any property or assets of AMD
Holding or any Additional Partner Company be applied to the purchase or other
acquisition or retirement of any Junior Liabilities; provided, however, that as
long as no Event of Default nor any Unmatured Event of Default nor with respect
to AMD Inc. any event which is of the type described in Section 11.1 (e), (f),
(g) or (h) of the AMD Inc. 1999 Loan and Security Agreement has occurred and is
continuing, there are excepted from the terms of the provisions of this Section
3 (without duplication):

                                       3



         (i)     those payments to AMD Inc. made by AMD Holding pursuant to
                 Article II of the Management Service Agreement or pursuant to
                 Article IV of the AMD Holding Wafer Purchase Agreement, in
                 either case without duplication and to the extent not paid by
                 AMD Saxonia pursuant thereto;

         (ii)    [intentionally left blank]; and

         (iii)   those payments to AMD Inc. made by AMD Holding in accordance
                 with Section 6.3 of the Sponsors' Support Agreement;

         and provided, further, that there are excepted from the terms of the
         foregoing provisions of this Section 3:

         (A)     distributions in respect of the Junior Liabilities to the
                 extent such distributions constitute non cash credits expressly
                 permitted to be made under the Management Service Agreement or
                 the AMD Holding Wafer Purchase Agreement; and

         (B)     performance by AMD Holding of its obligations (other than
                 payment obligations, if any) under the AMD Holding Wafer
                 Purchase Agreement, the AMD Holding Research Agreement, or the
                 License Agreement.

Moreover, if the AMD Holding Wafer Purchase Agreement or the Management Service
Agreement terminates for any reason whatsoever, AMD Holding shall be entitled to
credit the amounts payable thereunder against the amounts receivable by it
thereunder strictly in accordance with the terms and provisions of each such
Operative Document.

SECTION 4. Bankruptcy, Insolvency, etc. In the event of any dissolution, winding
up, liquidation, reorganization, or other similar proceedings relating to AMD
Holding or an Additional Partner Company, or to their respective creditors, as
such, or to their respective property (whether voluntary or involuntary, partial
or complete, and whether in bankruptcy, insolvency, compromise proceedings or
any other marshalling of the assets and liabilities of AMD Holding or an
Additional Partner Company, or any sale of all or substantially all of the
assets of AMD Holding or an Additional Partner Company or otherwise), the Senior
Liabilities shall first be paid in full before AMD Inc. shall be entitled to
receive and to retain any payment or distribution in respect of the Junior
Liabilities, and in order to implement the foregoing, (a) AMD Inc. hereby
irrevocably agrees that in such event all payments and distributions of any kind
or character in respect of the Junior Liabilities to which AMD Inc. would be
entitled if the Junior Liabilities were not subordinated pursuant to this
Agreement, shall be made directly to the Security Agent; (b) upon the
commencement and during the continuance of any proceedings referred to in this
Section 4, the Security Agent shall have the right to require AMD Inc. to claim,
enforce, prove, or vote in respect of the Junior Liabilities in such manner as
is directed by the Security Agent and is permitted by applicable law, including,
without limitation, to direct that all payments and distributions of any kind or
character in respect of the Junior Liabilities to which AMD Inc. would be
entitled if the Junior Liabilities were not subordinated pursuant to this
Agreement, shall be made directly to the Security Agent; provided, that if the
Security Agent shall not have required AMD Inc. to claim, enforce, prove, or
vote in respect of any of the Junior Liabilities on or before the day which is
10 Business Days before a date on which the failure to so claim, enforce, prove,
or vote would invalidate or otherwise materially adversely affect the rights of
AMD Inc., AMD Inc. shall have the right to claim, enforce, prove, or vote in
respect of such Junior Liabilities in AMD Inc.'s sole discretion; and (c) AMD
Inc. hereby irrevocably agrees that, for purposes hereof, the Security Agent
may, at its sole discretion for purposes hereof, in the name of AMD Inc. or
otherwise, demand, sue for, collect, receive, and receipt for any and all such
payments or distributions, and file, prove, and vote, or consent in any such
proceedings with respect to, any and all claims of AMD Inc. relating to the
Junior Liabilities. Notwithstanding anything to the contrary in the foregoing,
this Section 4 shall not apply with respect to Junior Liabilities of AMD Saxony
LLC to AMD Inc. which arise following a Substitution.

                                       4



SECTION 5. Payments Not to be Commingled. In the event that AMD Inc. receives
any payment or other distribution of any kind or character from AMD Holding, or
an Additional Partner Company, or from any other source whatsoever in respect of
any of the Junior Liabilities, other than as expressly permitted by the terms of
this Agreement, such payment or other distribution shall not be commingled with
other assets of AMD Inc. and shall be promptly turned over by AMD Inc. to the
Security Agent. AMD Inc. will mark its books and records, and cause AMD Holding
or the applicable Additional Partner Company, as the case may be, to mark its
books and records, as to clearly indicate that the Junior Liabilities are
subordinated in accordance with the terms of this Agreement, and will cause to
be clearly inserted in any instrument which at any time evidences any of the
Junior Liabilities a statement to the effect that the payment thereof is
subordinated in accordance with the terms of this Agreement. AMD Inc. will
execute such further documents or instruments and take such further action as
the Security Agent may reasonably request from time to time to carry out the
intent of this Agreement.

SECTION 6. Application of Payments; No Subrogation. All payments and
distributions received by the Security Agent in respect of the Junior
Liabilities in accordance with the terms thereof, to the extent received in or
converted into cash, may be applied by the Security Agent first to the payment
of any and all expenses (including reasonable attorneys' fees and legal
expenses) paid or incurred by the Security Agent in enforcing this Agreement or
in endeavouring to collect or realize upon any of the Junior Liabilities or any
security therefor in accordance with the terms hereof, and any balance thereof
shall, solely as between AMD Inc. and the Security Agent, be applied by the
Security Agent, in the manner provided by the Loan Agreement, toward the payment
of the Senior Liabilities remaining unpaid; but, as between AMD Holding and its
creditors or an Additional Partner Company and its creditors, no such payments
or distributions of any kind or character shall be deemed to be payments or
distributions in respect of the Senior Liabilities; and, notwithstanding any
such payments or distributions received by the Security Agent in respect of the
Junior Liabilities and so applied by the Security Agent toward the payment of
the Senior Liabilities, AMD Inc. shall be subrogated to the then-existing rights
of the Agent, the Security Agent, and the Banks, if any, in respect of the
Senior Liabilities only at such time as the Agent, the Security Agent, and the
Banks, shall have received payment of the full amount of the Senior Liabilities,
as provided for in Section 9, or (ii) this Agreement shall terminate pursuant to
Section 15. Each Secured Party shall, at AMD Inc.'s request and expense made
after such time, execute and deliver to AMD Inc. appropriate documents (without
recourse or warranty whatsoever) to evidence the transfer by subrogation to AMD
Inc. of an interest in the Senior Liabilities resulting from the application of
payments in the manner contemplated by this Section 6. The obligations of the
Secured Parties under the preceding sentence shall survive any termination of
this Agreement.

SECTION 7. Waivers by AMD Inc. AMD Inc. hereby waives: (a) notice of acceptance
by the Agent, the Security Agent, or any Bank, of this Agreement; (b) notice of
the existence or creation or non-payment of all or any of the Senior
Liabilities; and (c) all diligence in collection or protection of or realization
upon the Senior Liabilities or any thereof or any security therefor.

SECTION 8. Obligations of AMD Inc. AMD Inc. will not, without the prior written
consent of the Security Agent: (a) transfer or assign, or attempt to enforce or
collect, any Junior Liabilities or any rights in respect thereof except as
expressly permitted to be paid pursuant to Section 3 above; provided, that
nothing in this Agreement shall be deemed to prevent AMD Inc. from seeking
damages, equitable relief, or otherwise enforcing any rights it may have against
AMD Holding or any Additional Partner Company arising out of (x) any tort or
infringement of AMD Inc. tangible or intangible property rights (including
without limitation rights under applicable patent, copyright and trade secret
laws and similar principles) to the extent, but only to the extent, such tort or
infringement arises after the date of termination of the AMD Holding Wafer
Purchase Agreement or (y) any breach by AMD Holding of its obligations under the
License Agreement to the extent, but only to the extent, that such breach arises
after the date of termination of the AMD Holding Wafer Purchase Agreement; (b)
take any collateral security for any Junior Liabilities or (c) commence, or join
with any other

                                       5



creditor commencing, any bankruptcy, reorganisation, or insolvency proceedings
with respect to AMD Holding or any Additional Partner Company. Nothing in this
Agreement shall prevent AMD Inc. from forgiving all or any portion of the Junior
Liabilities or from converting all or any portion of such Junior Liabilities
into, or exchanging such Junior Liabilities for, equity of AMD Holding or equity
of AMD Saxony LLC, and any such equity shall not be deemed to be a distribution
or payment on such Junior Liabilities for purposes of this Agreement.

SECTION 9. Continuing Subordination. This Agreement shall in all respects be a
continuing agreement and shall remain in full force and effect (notwithstanding,
without limitation, the dissolution of AMD Inc. or that at any time or from time
to time all Senior Liabilities may have been paid in full), but shall
automatically terminate on the Loan Agreement Termination Date.

SECTION 10. Rights of the Agent, the Security Agent, and the Banks. The Agent,
the Security Agent, and each Bank may, from time to time, at its sole discretion
and without notice to AMD Inc., take any or all of the following actions without
affecting its or their rights under this Agreement: (a) retain or obtain a
security interest in any property of any Person to secure any of the Senior
Liabilities; (b) retain or obtain the primary or secondary obligations of any
other obligor or obligors with respect to any of the Senior Liabilities; (c)
extend or renew for one or more periods (whether or not longer than the original
period), alter or exchange any of the Senior Liabilities, or release or
compromise any obligation of any nature of any obligor with respect to any of
the Senior Liabilities; (d) compromise, settle, release, renew, extend, indulge,
amend, change, waive, modify, or supplement in any respect any of the terms or
conditions of any of the Operative Documents; and (e) release its lien on or
security interest in, or surrender, release, or permit any substitution or
exchange for, all or any part of any property securing any of the Senior
Liabilities, or extend or renew for one or more periods (whether or not longer
than the original period) or release, compromise, alter, or exchange any
obligations of any nature of any obligor with respect to any such property.

SECTION 11. Transfer of Obligations; Enforcement. The Security Agent, the Agent,
or any Bank may, from time to time, without notice to AMD Inc., but subject
however, to the provisions of Section 26 of the Loan Agreement, assign or
transfer any or all of the Senior Liabilities or any interest therein; and,
notwithstanding any such assignment or transfer or any subsequent assignment or
transfer thereof, such Senior Liabilities shall be and remain Senior Liabilities
for purposes of this Agreement, and every immediate and successive assignee or
transferee of any of the Senior Liabilities or of any interest therein, shall,
to the extent of the interest of any such assignee or transferee in the Senior
Liabilities, be entitled to the benefits of this Agreement to the same extent as
if such assignee or transferee were the transferor. The rights of the Secured
Parties hereunder shall be exercisable solely by the Security Agent on behalf of
the Secured Parties, unless either the Security Agent is not able pursuant to
applicable law to realize the practical benefits of such rights on behalf of the
Secured Parties or the limitations set forth in this sentence would otherwise
materially adversely affect the rights of the Secured Parties hereunder.

SECTION 12. Additional Provisions. None of the Agent, the Security Agent, or the
Banks shall be prejudiced in its rights under this Agreement by any act or
failure to act of any of AMD Holding, any Additional Partner Company, or AMD
Inc., or any noncompliance of AMD Holding, any Additional Partner Company, or
AMD Inc. with any agreement or obligation, regardless of any knowledge thereof
which the Agent, the Security Agent, or such Bank may have or with which the
Agent, the Security Agent, or such Bank may be charged; and no action of the
Agent, the Security Agent, or any Bank permitted hereunder shall in any way
affect or impair the rights of the Agent, the Security Agent, or any Bank, and
the obligations of AMD Inc., under this Agreement. For the purposes of this
subordination, Senior Liabilities shall include all obligations of AMD Holding
and the Additional Partner Companies under or in connection with any of the
Operative Documents to the Agent, the Security Agent, and each Bank,
notwithstanding any right or power of any AMD Holding, any Additional Partner
Company, or anyone else to assert any claim or defence as to the invalidity or
unenforceability of any such obligation, and no such claim or defence shall
affect or impair the agreements and obligations of AMD Inc. hereunder; provided,
however, that Senior Liabilities shall

                                       6



not include any obligations or liabilities of AMD Holding or any Additional
Partner Company which a court of competent jurisdiction shall have determined
(which determination shall be final and unappealable) are invalid or
unenforceable.

SECTION 13. Cumulative Remedies; Modifications in Writing. The remedies provided
for herein are cumulative and are not exclusive of any remedies that may be
available to the Agent or the Security Agent at law, in equity, or otherwise. No
amendment, modification, supplement, termination, or waiver of or to any
provision of this Agreement, or consent to any departure by AMD Inc., an
Additional Partner Company, or AMD Holding therefrom, shall be effective unless
the same shall be in writing and signed by or on behalf of the Agent and the
Security Agent.

SECTION 14. Severability of Provisions. In case any provision of this Agreement
is invalid or unenforceable, the validity or enforceability of the remaining
provisions hereof shall remain unaffected. The parties hereto shall have an
obligation to replace any invalid provision by a valid provision which
approximates best the economic purpose of the invalid provision.

SECTION 15. Termination. This Agreement and the obligations of the parties
hereunder shall terminate on the Loan Agreement Termination Date; provided, that
such obligations shall automatically revive and be reinstated if and to the
extent that AMD Holding or any Additional Partner Company shall subsequently
have obligations to any of the Secured Parties under or arising out of any of
the Financing Documents.

SECTION 16. Assignment. This Agreement shall be binding upon and shall inure to
the benefit of each party hereto and their respective successors and assigns;
provided, however, that the Security Agent, the Agent, and the Banks may
transfer their rights under this Agreement, subject, however, to the provisions
of Section 26 of the Loan Agreement; provided, further, that none of AMD Inc.,
an Additional Partner Company or AMD Holding shall have the right to transfer or
assign its rights under this Agreement without the prior written consent of the
Agent and the Security Agent; and provided, further, that AMD Holding or an
Additional Partner Company may assign this Agreement to the Security Agent as
security for the obligations of AMD Holding under the Loan Agreement and the
other Operative Documents. Notwithstanding any such assignment or transfer or
any subsequent assignment or transfer thereof, Senior Liabilities shall be and
remain Senior Liabilities for the purposes of this Agreement, and every
immediate and successive assignee or transferee of any of the Senior Liabilities
or of any interest therein shall, to the extent of the interest of such assignee
or transferee in the Senior Liabilities, be entitled to the benefits of this
Agreement to the same extent as if such assignee or transferee were the
transferor, subject, however, to the provisions of Section 11; provided,
however, that, in addition to its rights under Section 11, unless the Security
Agent (acting on the instructions of an Instructing Group) shall otherwise
consent in writing, the Security Agent shall have an unimpaired right, prior and
superior to that of any such assignee or transferee, to enforce this Agreement
for the benefit of the Secured Parties as to those of the Senior Liabilities
which have not been so assigned or transferred.

SECTION 17. Notice. All notices, demands, instructions, and other communications
required or permitted to be given to or made upon any party hereto shall be in
writing and shall be personally delivered or sent by registered or certified
mail, postage pre-paid, return receipt requested, or by pre-paid telex, TWX, or
telegram, or by pre-paid courier service, or by telecopier, and shall be deemed
to be given for purposes of this Agreement on the day that such writing is
delivered or sent to the intended recipient thereof in accordance with the
provisions of this Section 17. Unless otherwise specified in a notice sent or
delivered in accordance with the foregoing provisions of this Section 17,
notices, demands, instructions, and other communications in writing shall be
given to or made upon the respective parties hereto at their respective
addresses (or to their respective telex, TWX or telecopier numbers) indicated
below.

                                      7



To the Security Agent:

Dresdner Bank AG, as Security Agent
Ostra Allee 9
01067 Dresden
Attention: Betreuung Unternehmenskunden
Facsimile No.: (49) 351 489-1300

To the Agent:

Dresdner Bank Luxembourg S.A., as Agent
26, rue du Marche-aux-Herbes
L-2097 Luxembourg
Attention: Direktion
Facsimile No.: (352) 4760-824

To AMD Inc.:

Advanced Micro Devices, Inc.
One AMD Place
Sunnyvale, California  94088
Attention: General Counsel
Facsimile No.: (1) (408)774 7399


To AMD Holding:

AMD Saxony Holding GmbH
Wilschdorfer Landstrasse 101
01109 Dresden
Attention: Geschaftsfuhrer
Facsimile No.: (49) 351 277 91300


To AMD Saxony LLC:

One AMD Place
Mailstop 150
Sunnyvale, CA 94088
Attention: Manager
Facsimile No.: (408) 774 7399


To AMD Admin:

Wilschdorfer Landstrasse 101
01109 Dresden
Attention: Geschaftsfuhrer
Facsimile No.: (49) 351 277 91300


SECTION 18. Relationship to Other Agreements. The rights of the Agent and the
Security Agent pursuant to this Agreement are in addition to any other rights or
remedies which the Agent and the

                                       8



Security Agent may have under statutory law or other agreements between one or
more of the Agent, the Security Agent, the Banks, AMD Inc., AMD Holding, and the
Additional Partner Companies. Where such rights and remedies are in conflict
with the provision of this Agreement, the provision of this Agreement shall
prevail.

SECTION 19. Governing Law. The form and execution of this Agreement and all
rights and obligations of the parties arising hereunder shall be governed by the
Laws of the Federal Republic of Germany.

SECTION 20. Jurisdiction. AMD Inc., AMD Holding and the Additional Partner
Companies hereby submit to the exclusive jurisdiction of the courts in Frankfurt
am Main for any dispute arising out of or in connection with this Agreement. AMD
Inc. and AMD Saxony LLC state that Advanced Micro Devices GmbH,
Rosenheimerstrasse 143b, 81671 Munich, Germany, Tel.: +49 89 450 530,
Fax: +49 89 906 490, is their accredited agent for service of process and hereby
undertakes to maintain an agent for service in Germany. The foregoing submission
to jurisdiction shall not (and shall not be construed so as to) limit the rights
of the Agent or the Security Agent to take suits, actions, or proceedings
against a Sponsor or an Additional Partner Company to enforce any judgment
rendered by the courts in Frankfurt am Main in any other court or entity of
competent jurisdiction where such Sponsor or Additional Partner Company has
assets, nor shall the taking of suits, actions, or proceedings to enforce any
such judgment in one or more jurisdictions preclude the taking of enforcement
proceedings in any other jurisdiction, whether concurrently or not.

SECTION 21. Use of English Language. This Agreement has been executed in the
English language. All certificates, reports, notices, and other documents and
communications given or delivered pursuant to this Agreement shall be in the
English language and, if reasonably requested by the Agent, a certified German
translation thereof shall be furnished promptly thereafter. In the event of any
inconsistency, the English language version of any such document shall control.

SECTION 22. Operative Document. This Agreement is an Operative Document executed
pursuant to the Loan Agreement.

                [Remainder of this page intentionally left blank]

                                       9



         IN WITNESS WHEREOF, each of the parties set out below has caused this
Agreement to be duly executed and delivered by its respective officer or agent
thereunto duly authorised as of the date first above written.

                               ADVANCED MICRO DEVICES, INC.

                               By:______________________________________________

                               Its _____________________________________________



                               AMD SAXONY HOLDING GMBH

                               By:______________________________________________

                               Its Managing Director

                               AMD SAXONY LLC

                               By:______________________________________________

                               Its Manager


                               AMD SAXONY ADMIN GMBH

                               By:______________________________________________

                               Its Managing Director

                               DRESDNER BANK LUXEMBOURG S.A.

                               as Agent

                               By:______________________________________________

                               Its _____________________________________________



                               DRESDNER BANK AG
                               as Security Agent

                               By:______________________________________________

                               Its _____________________________________________

            [Signature page to the AMD Inc. Subordination Agreement]

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